Rio2 Limited Secures Funding & Strong Government Support to Advance Fenix Gold Project

• Rio2 Limited recently completed a C$23 million equity financing, exceeding initial $10 million goal
• Funds will go towards permitting and construction of Fenix Gold project in Chile, slated for first gold production by end of 2025
• Prefabrication work already done; remaining tasks include remobilizing contractors and workforce
• Project now has strong support from regional government after previous permitting challenges
• Potential exists for future expansion in years 3-5 of production; Rio2 focused on building value vs seeking acquisition

Funded Through to Construction at Fenix Gold Project

Rio2 Limited has taken a major step forward in developing its 5-million-ounce Fenix Gold project in Chile. CEO Alex Black discussed the company's successful C$23 million equity financing round, which will fund the project through to construction financing later this year. The raise drew strong support from existing shareholders, validating the project's potential.

Interview with Executive Chairman, Alex Black

Laying the Groundwork

Though the Fenix Gold project faced permitting challenges in 2021-2022, much of the preliminary work is already in place.

"If people go to our website and have a look at our corporate presentation, there's lots of photos there that show the work that we were able to do two years years ago, which is still there," noted Black. "A lot of the prefabrication of the plant, long lead items, etc. have has been done."

With funding secured, Rio2's next steps include reactivating alliance partnerships, remobilizing people and equipment, and completing the assembly of the prefabricated processing plant. The company will also be re-hiring many of the 80 professionals previously recruited in Chile.

Government Backing

Critically, the Fenix Gold project now has the backing of the Chilean government after earlier setbacks.

"We are now a priority project in the Atacama region," said Black. "We have the Ministry of Economy and the Ministry of Mining pushing this project ahead with all their support to bring it into being."

This marks a complete turnaround from the previous permitting obstacles. In fact, the relevant environmental bodies have admitted in writing that the project was wrongfully halted before. With federal support, community backing, and the Atacama governor fully on board, Black expects to obtain the remaining permits by August 2024.

Production and Expansion Plans

Rio2 is targeting initial gold production at Fenix by the end of 2025. To accelerate cash flows and loan repayment, the mine plan involves stockpiling lower grade ore while processing higher grade material on the heap leach pad in the first few years.

Looking further ahead, Rio2 sees potential to expand operations in year 3-5 of production. "Don't forget there's a second stage to this project," hinted Black. "We've talked a little bit about it – we will talk more about it… we're not anticipating expansion until probably any time between year three and five of production."

Building for the Future

While Rio2 has drawn unsolicited interest from larger mining companies, Black emphasized that a takeout is not the goal. "What we've been very clear with those corporates is we're not looking to be taken out," he said. "We're here to do what we did at Rio Alto – build value and bring this project into production."

The company's lean corporate structure and experienced Latin American management team, largely drawn from past successes at Rio Alto, position it well to deliver on its ambitions. With a healthy treasury, permitting on track, and key groundwork laid, Rio2 appears poised to become a significant new gold producer in the near future.

Conclusion

With fresh funding, government support, and an experienced team, Rio2 Limited has significantly de-risked its Fenix Gold project in Chile. The company appears well-positioned to bring a major new gold mine into production by 2025, with expansion potential to drive further growth. For investors, Rio2's current valuation could offer an attractive entry point ahead of upcoming permitting and construction milestones.

The Investment Thesis for Rio2 Limited

• C$23M financing provides a runway through construction funding
• Permits expected by Aug 2024; on track for production by end-2025
• High-grade ore processing to accelerate cash flows in initial years
• Expansion potential in years 3-5 to boost long-term production profile
• Proven management team focused on building value vs selling
• Attractive entry point after recent permitting challenges and gold market weakness

Macro Thematic Analysis

The global gold mining sector faces the ongoing challenge of depleted reserves and declining grades. As a result, there is a scarcity of high-quality, advanced-stage development projects like Rio2's Fenix Gold project. With 5 million ounces of reserves and strong exploration potential, the project represents a valuable asset in an industry struggling to replenish production.

At the same time, gold prices have shown renewed strength in 2024 amidst economic uncertainty and inflationary pressures. This bodes well for the economics of the Fenix Gold project as it advances towards production later this decade.

As CEO Alex Black noted, "We've never recovered, really, I mean there's other reasons for that – gold, the sentiment towards gold juniors, etc. But you know, this now is just a completely turned-around project."