Rio2 Eliminates Mezzanine Debt, Reduces Condestable Obligation to US$45 Million, and Bolsters Lima Management Team

• Rio2 voluntarily repaid US$20 million on the Condestable vendor debt on 27 March 2026, fully extinguishing the US$10 million Mezzanine Promissory Note
• The remaining Vendor Senior Promissory Note now stands at US$45 million, reduced from the original US$55 million at acquisition
• Three former Southern Peaks Mining executives join Rio2's Lima-based management team, bringing direct operational experience at Condestable
• Edgardo Briones transitions to Senior Director, Projects, and Christopher Diaz is promoted to Senior Vice President, Finance
• Rio2 granted 1,017,500 restricted share units and 1,462,500 stock options to executive officers, directors, and management

Rio2 Limited (TSX: RIO; OTCQX: RIOFF; BVL: RIO) is a Vancouver-based, Latin American-focused mining company that produces gold at its Fenix Gold heap leach mine in Chile and copper, gold, and silver at its recently acquired Condestable underground mine in Peru. Its two operating subsidiaries, Fenix Gold Limitada and Compañía Minera Condestable S.A., are run by a management team with a background in both mine development and capital markets. The company has committed to applying environmental standards that go beyond what regulators require in the territories where it operates.

US$20 Million Voluntary Payment Extinguishes Mezzanine Note and Reduces Condestable Vendor Debt to US$45 Million

The Condestable acquisition was structured with two vendor debt instruments payable to the former owner, Southern Peaks Mining L.P. (SPM): a Vendor Senior Promissory Note of US$55 million and a Mezzanine Promissory Note of US$10 million. Both carried six-year terms, with a six-quarter grace period before quarterly principal repayments kicked in. Once that grace period ended, scheduled repayments were set at US$2.5 million per quarter on the Senior note and US$550,000 on the Mezzanine note.

On 27 March 2026, Rio2 made a voluntary payment of US$20 million, plus accrued interest, retiring the Mezzanine Promissory Note in full and bringing the Senior Promissory Note down from US$55 million to US$45 million. At the time of payment, the Mezzanine note was carrying an interest rate of 15.75% and the Senior note 11.75%, both calculated on the U.S. prime rate plus a fixed margin that steps down after the grace period ends.

Rio2 will continue to consider further voluntary payments to accelerate repayment of the remaining US$45 million balance on the Vendor Senior Promissory Note.

Seasoned SPM Leadership Team Joins Rio2 to Strengthen Condestable Operations in Peru

Three executives from SPM, the mine's former operator, are now joining Rio2's Lima team. Enrique Ramirez takes on the role of Senior Vice President, Mining and General Manager of Condestable. He was Executive Vice President and Chief Operating Officer at SPM from 2011, and before that held senior positions at Pan American Silver, Glencore International, and Volcan Compañía Minera. With over 27 years in underground mining, he is also a former director of the Peruvian Association of Mining Engineers and former president of the Safety Committee of the Peruvian National Mining and Petroleum Association. He holds a Mining Engineering degree from the Montana College of Minerals.

Mariano Alarco steps in as Senior Director, Operational Excellence, after 13 years at SPM as Executive Director and Executive Vice President of Business Development. He spent eight years before that as an equity research analyst at Goldman Sachs in London covering the energy, renewables, oil and gas sectors, and two years prior at Deutsche Bank, also in London. He holds a BSc in Environmental Policy and Economics from the London School of Economics and Political Science and an MSc with distinction in metals and energy finance from the Royal School of Mines, Imperial College. Carola Gallo joins as Director, Finance, having served as Chief Financial Officer at SPM since April 2013. Her earlier career included roles at Maple Energy Plc, Hochschild Mining, and Ernst and Young Peru. She holds a degree in Accounting from Universidad de Lima and an MBA from Thunderbird School of Global Management.

On the internal side, Edgardo Briones moves into the role of Senior Director, Projects, and Christopher Diaz steps up to Senior Vice President, Finance. Adolfo Vera, who founded SPM and served as its President and General Manager, has departed the company and will remain connected to Rio2 as an advisor to the executive team. 

CEO Andrew Cox commented: 

"We look forward to the inclusion of Enrique, Mariano and Carola to our senior management team in Lima as we advance our mining activities in Peru and Chile. I would also like to sincerely thank Adolfo for his many years of exceptional service at SPM. From founding SPM and the acquisition of Condestable, Adolfo oversaw the development of the company into a medium size copper producer in Peru. Condestable has become the mining operation it is today largely owing to Adolfo's enthusiasm, drive and leadership, and we thank him for his invaluable contribution."

Equity Incentive Awards Granted to Align Management with Long-Term Shareholder Value

Alongside the management changes, Rio2 issued a total of 1,017,500 restricted share units (RSUs) to executive officers, directors, and management under its Share Incentive Plan. RSUs are a deferred compensation instrument that converts into company shares once vesting conditions are met, typically over a defined period. The specific vesting terms were not detailed in the release.

A further 1,462,500 stock options were granted under the Stock Option Plan to certain executive officers, directors, and management. These are priced at C$3.00 per share, a 10% premium to the closing price of C$2.72 on 31 March 2026, and carry a five-year expiry from the grant date. A stock option only produces a return if the share price rises above the exercise price before the options expire.

Both awards are subject to vesting provisions under the company's existing incentive plans. No breakdown of allocations between individual recipients or groups was provided.

Milestones and Next Steps

The retirement of the Mezzanine Promissory Note marks the first material reduction of the debt taken on to acquire Condestable, leaving a single remaining obligation of US$45 million on the Vendor Senior Promissory Note. With both the Fenix Gold mine in Chile and Condestable in Peru now in operation, and a new Lima leadership team drawing on years of direct experience at the mine under its previous owner, Rio2 is focused on advancing mining activities across both countries while continuing to weigh further voluntary debt repayments.

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