Rio2 Limited Records First Revenue Quarter as a Dual-Asset Producer

• Consolidated revenue of $65.9 million for Q1 2026, versus zero mining revenue in Q1 2025, driven by first gold production at Fenix Gold and two months of copper output from Condestable following its acquisition on 30 January 2026.
• Adjusted net income of $12.1 million compared to an adjusted net loss of $1.3 million in the same quarter last year.
• Cash and cash equivalents rose to $93.1 million at quarter-end, up from $46.4 million at end-2025, after voluntarily repaying $20 million in debt ahead of schedule.
• Condestable produced 6.4 million pounds of copper, 3,201 ounces of gold and 48,671 ounces of silver in its first two months under Rio2's ownership, at a cash cost of $2.01 per pound against an average realised copper price of $5.69 per pound.
• Fenix Gold ramp-up was slower than planned due to a delayed blasting permit, labour constraints and a truck fleet transition, with commercial production now targeted for Q4 2026.

Rio2 Limited (TSX: RIO; OTCQX: RIOFF; BVL: RIO) is a Vancouver-based precious metals and copper producer with mining operations in South America. The company produces gold at its Fenix Gold heap-leach mine in Chile and copper, gold and silver at the Condestable underground mine in Peru, which it acquired in January 2026. Rio2 operates through its subsidiaries Fenix Gold Limitada and Compañía Minera Condestable S.A., and states a commitment to environmental and social standards across both operations.

First Production from Fenix Gold and Condestable's Contribution

Rio2's Q1 2026 results mark its first quarter with revenue from mining operations. Consolidated revenue of $65.9 million was comprised of copper sales of $32.5 million, gold sales of $30.7 million and silver sales of $3.9 million. Income from mine operations was $24.6 million, compared to $0 in Q1 2025 when the company had no producing assets. Adjusted EBITDA, which represents earnings before interest, taxes, depreciation and amortisation, was $30.8 million for the quarter.

The company generated $22.8 million in cash from operating activities and closed the quarter with $93.1 million in cash, after repaying $20 million in debt voluntarily. The remaining capital planned for Fenix Gold through the end of 2026 totals $33.9 million, which the company states will be funded from existing cash reserves and operating cash flow.

Net income attributable to Rio2 shareholders was $22.3 million for the quarter. This figure includes a $17.2 million non-cash fair value gain on a streaming obligation and one-time acquisition and restructuring costs totalling $6.1 million. Adjusted net income, which removes these items, was $12.1 million, a measure the company uses to reflect recurring operating performance.

Fenix Gold Mine Ramp-Up Challenges and Operational Progress

The Fenix Gold Mine is a heap-leach gold operation in Chile's Atacama Region, where crushed ore is stacked onto a lined pad and irrigated with a solution that extracts gold over time. The mine produced 4,648 ounces of gold in Q1 2026, below the planned rate. Three factors contributed to the shortfall: a blasting permit received six weeks later than expected in December 2025, which set back the 2026 mine plan; difficulty retaining truck drivers in a tight Chilean labour market, which affected haulage volumes; and an initial truck fleet of rented 35-tonne units that were not suited to steady-state operations. A new fleet of 42-tonne trucks purchased by contractor STRACON begins arriving on site in May 2026.

Elsewhere in the operation, several performance indicators tracked in line with plan. Water delivery to the site averaged over 1,000 cubic metres per day with on-site storage reaching 45,000 cubic metres at quarter-end. Gold recovery on the leach pad is tracking the projected 75% rate at 90 days of leaching, and ore fragmentation from blasting met targets. A pump in the processing plant that caused delays after failing three times was replaced in March.

CEO Andrew Cox stated:

"Although the ramp-up was slower than anticipated, most critical issues have now been addressed and rectified, and we are expecting production to steadily increase to projected levels over the remaining three quarters of 2026."

Mining at the Fenix Central area has been brought forward to Q2 2026 to add ore supply. Full-year gold production guidance of 60,000 to 65,000 ounces remains unchanged, and commercial production is targeted for Q4 2026.

Condestable Integration and Expansion Planning

Condestable is an underground copper-gold-silver mine located near Lima, Peru. In its first two months under Rio2's ownership, the mine processed over 470,000 tonnes of ore and produced 6.4 million pounds of copper, 3,201 ounces of gold and 48,671 ounces of silver. Cash costs came in at $2.01 per pound of copper produced against an average realised price of $5.69 per pound. Unit production costs of $38.90 per tonne were better than budgeted, partly due to a favourable ore mix and exchange rates. Copper recoveries were marginally below expectations due to higher oxide content in certain near-surface sections, while gold and silver recoveries were above budget.

In March and April 2026, Condestable conducted laboratory-scale tests using third-party ore sorting equipment on low-grade stockpiles and historical waste material. Results showed copper grade increases of 1.4 to 1.6 times with 30 to 45 per cent of mass rejected, meaning lower-value material can be separated before processing. Based on these results, the company is planning a 12-month pilot programme at 1,000 to 1,500 tonnes per day to further evaluate the technology. The company also expects regulatory approval to increase plant processing capacity to 10,000 tonnes per day in Q3 2026, and is completing engineering and cost estimates for a broader expansion.

Executive Chairman Alex Black noted:

"Condestable has continued to produce to plan in Q1, a credit to the onsite management team, as well as to the Rio2 management team in handling the Condestable integration."

An updated mineral resource and reserve estimate for Condestable, prepared by SLR Consulting, is expected to be released in Q2 2026. Rio2 has also commenced a 2026 exploration programme at the site comprising 45,000 metres of underground drilling and a geological mapping exercise across the full 46,000-hectare land package, the first of its kind at Condestable.

Conclusion

Rio2's key near-term milestones include progressing Fenix Gold toward its targeted 20,000 tonnes-per-day mining rate, reaching commercial production at Fenix Gold in Q4 2026, and releasing the updated Condestable resource estimate in Q2 2026. The company also expects to publish a prefeasibility study for a Fenix Gold expansion to 80,000 tonnes per day in Q3 2026, subject to finalising desalinated water supply options by June 2026. Full-year production guidance for Fenix Gold stands at 60,000 to 65,000 ounces of gold, and for Condestable at 21,500 to 23,500 tonnes of payable copper equivalent for the February to December 2026 period.

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