Corporate Update
PRESS RELEASE – SEPTEMBER 17, 2018
RIO2 LIMITED
CORPORATE UPDATE
Rio2 Limited (“ Rio2” or the “ Company”) (TSXV: RIO; BVL:RIO) is pleased to provide a
Corporate Update.
CHANGE OF PROJECT NAME AND CHILEAN SUBSIDIARY NAME
Rio2 has chosen to change the name of the Cerro Maricunga Gold Project to the Fenix Gold
Project and the name of the Company’s Chilean subsidiary from Minera Atacama Pacific
Gold Chile Limitada to Fenix Gold Limitada. The reasons for the name changes are to simplify
reference to the project and differentiate it from others that use the word “Maricunga” in
their project and/or company names. The change will take effect immediately.
SENIOR MANAGEMENT APPOINTMENT
Rio2 welcomes Enrique Garay as Senior Vice President, Geology, to our leadership team.
Mr. Garay is replacing Ian Dreyer who is undertaking a newly created position as Senior Vice
President, Technical Services. Mr. Dreyer will provide high-level ongoing support to the Rio2
technical team and lead the geological component of project assessments in relation to
ongoing M&A activities.
Mr. Garay is a seasoned senior geologist with over 25 years of experience in the precious
and base metal resource sector, wi th a focus on exploration and mine geology. He has
worked for a number of leading mining companies including Barrick, Hochschild Mining,
Trafigura, Consorcio Minero Horizonte, Rio Alto Mining, and Nexa Resources.
Mr. Garay was a key member of the Rio Alt o Mining team that developed and put the La
Arena gold mine into operation. He also contributed to increasing the La Arena Oxide Mine
Reserves, as well as increasing the Mineral Resources of the adjacent Cu -Au porphyry
project at La Arena. During his time at Rio Alto Mining, Mr. Garay was also involved in the
acquisition, development, and commissioning of the Shahuindo gold project. He was involved
in the discovery of the Inmaculada mine (Hochschild), and in the acquisition, development,
commissioning, and operation of the Pierina Gold Mine, owned by Barrick Gold Corp. Most
recently, Mr.Garay lead the technical team in the NEXA Resources USD250,000,000 Cerro
Lindo Silver Stream transaction.
Mr. Garay is a Qualified Person (QP) as defined by the Canadian Na tional Instrument 43 -
101 guidelines. He possesses strong skills in the assessment of base and precious metal
mineralized systems and has worked throughout Latin America having been involved in the
assessment of various mining projects in Peru, Chile, Colo mbia, Mexico, Argentina,
Guatemala, Panama, Ecuador and Brazil.
Mr. Garay obtained his degree as a Geological Engineer from Universidad Nacional de
Ingenieria, Peru and has a M.Sc. in Mineral Exploration from Queens University, Canada.
FENIX GOLD PROJECT – ACTIVITIES UPDATE
Staged Development Strategy
To date, the Fenix Gold Project has been envisaged as a heap leach gold mining project that
will involve open pit mining of mineralized material, three stage crushing, no agglomeration
and cyanide leaching of gold. For details of this plan see Atacama Pacific Gold Corporation’s
independent technical report entitled “NI 43-101 Technical Report on the Cerro Maricunga
Project Pre-Feasibility Study Atacama Region, Chile” dated October 6, 2014 with an effective
date of August 19, 2014, a copy of which document is available on SEDAR under Rio2
Limited’s SEDAR profile at www.sedar.com.
Based on Rio2’s findings in the Pre -Feasibility Study, Rio2 is planning to revis e the
development of the Fenix Gold Project and produce a Feasibility Study which is scheduled for
completion in H2, 2019, outlining the revised development plan.
The current thinking is focused on a staged development plan which will focus on mining
higher-grade mineral reserves in the early years of production followed by a steady
expansion of production to an optimal throughput rate with the aim of maximizing free cash
flow that is generated by the project. The Company believes that a staged approach to
developing the Fenix Gold Project will allow for upfront capital expenditures to be minimized
and will make financing simpler with cash flow from operations to be utilized to fund project
expansion.
Revised Mineral Resource Estimate
In preparation for t he completion of a Feasibility Study on the Fenix Gold Project, Rio2 is
planning to produce a revised resource estimate for the deposit to be completed by the end
of the Q1, 2019. To assist with producing the new resource estimate, the Company’s
geologists under the direction of Mr. Garay are currently re -logging the existing core from
past Fenix drilling programs dating back to 2010. The principal reason for re -logging the
core is to generate, for the first time, a geological model that will support the new resource
estimate. The Company geologists believe that there is a high -grade component to the
resource related to structures and breccias which are prevalent in the deposit but have not
been defined in the current resource estimate which has been constra ined by a 0.15 g/t
grade shell without considering geological domaining. The Company’s geologists are also
resampling surface exposures of the mineralized resource to include this information in the
revised resource estimate. Previous surface sampling was not included in the current
resource estimate despite a high proportion of samples being above the average
mineralized resource grade and the resource outcropping at surface.
The Company is also planning to commence a 7,000 -meter drilling program in Novem ber
2018, focused on the US$ 728 pit shell defined in the Pre-Feasibility Study. The objective of
this drilling is to intersect and define east-west structural feeders that the geologists believe
are controlling the near surface higher grade mineralization. The drilling will also serve as a
check for previous drilling within the US$ 728 pit shell and assist in better defining the near
surface higher grade mineralized component of the new resource estimate.
Feasibility Study Engineering Activities
A series of geometallurgical, geotechnical and condemnation drill holes will also be
undertaken to follow on from the in -pit drilling program. Metallurgical drilling will assist the
Company on completing a trade -off of various crushing options for the project whil e
geotechnical drilling will focus on pit wall stability and condemnation drilling will be targeted
in areas of mine infrastructure such as leach pad, waste dump, process plant and other
mine facilities. All the information gathered from this additional drilling will contribute to the
completion of the planned Feasibility Study.
Water Supply Options
Rio2 has a water supply agreement in place with Aguas Chañar S.A. for the purchase of 2.5
million cubic meters (80 litres per second) of treated industrial water annually. The term of
the agreement is for 13 years and commences upon the start of production at the Fenix
Gold Project. Aguas Chañar S.A. is a company jointly owned by Aguas Nuevas S.A. (a
subsidiary of Marubeni Corp) and a private Chilean investment fund, Toesca Asset
Management. The company owns and operates a water treatment facility in the City of
Copiapo located approximately 140 kilometers west of the Fenix Gold Project. Rio2
anticipates that the use of industrial water will simplify the permitting process for the
development of the Fenix Gold Project as water required for the project will not be extracted
from underground water sources as typically is the case in most Chilean mining projects.
The current plan is to build a pipeline with associated power line from the Aguas Chañar
facilities to Fenix which is likely to be constructed along the existing main road from Copiapo
to Argentina which passes within 20 kilometers of Fenix. The capital costs, operating costs
and cost of water for this water solution have been incorporated into the Pre-feasibility Study
NI 43-101 Technical Report on the Cerro Maricunga Project Pre-Feasibility Study with
effective date, August 19, 2014.
As Rio2 is considering a staged development strategy for the Fenix Gold Project, water for
the contemplated starter project is likely to be in the range of 15 to 25 litres per second
depending on throughput. To satisfy the amount of water required and to accelerate the
time to Stage 1 production, the Company is reviewing a number of water options involving
unused water rights in the proximity of the project.
Environmental Activities
From an environmental perspective, the Company has recently commenced activities
related to completing an environmental baseline study on the Fenix Gold Project. Depending
on the ultimate water source that is selected for the starter project, it is currently estimated
that the baseline study will be completed by mid 2019 and an Environmental Impact Study
filed thereafter for the review and approv al by Chilean Environmental Authorities. The
Company is also in the process of completing a social baseline study as a precursor to
engagement and dialogue with all stakeholders within the area of future development of the
Fenix Gold Project.
CORPORATE ACTIVITIES UPDATE
Rio2’s leadership team has begun repositioning the Fenix Gold Project as a new, gold
development stage project in the precious metals sector. Since closing the acquisition of
Atacama Pacific Gold Corp., numerous meetings have been held wit h a broad range of
investment bankers and mining analysts with the objective of raising awareness of Rio2 and
its new project. To that end, an analyst visit to the Fenix Gold Project has been coordinated
for later this month and members of the Executive Management team will also be attending
the Denver Gold Forum in Colorado Springs. News flow is expected to increase during the
next 18 months as the Company completes its planned drilling program, updates the
mineral resource estimate, completes additional e ngineering work, files an Environmental
Impact Study and completes a Feasibility Study on the project.
Alex Black, President and Chief Executive Officer of Rio2, stated, “The Rio2 management
team is keenly focused on advancing the Fenix Gold Project to pr oduction and a number of
activities will be completed during the next 18 months that will demonstrate how we intend
to achieve our objective. Once we have completed the Feasibility Study we will be able to
outline a detailed project schedule which will provide project timing and key milestones.”
NATIONAL INSTRUMENT 43‐101 DISCLOSURE
The scientific and technical content of this new release has been reviewed and approved by
Enrique Garay, Senior Vice President ‐ Geology, Rio2 Limited, a Qualified Person as defined
by National Instrument 43‐ 101. For additional information regarding the Fenix Gold Project
(formerly the Cerro Maricunga Gold Project), including key parameters, assumptions and
risks associated with its mineral resource and reserve estimates, see the independent
technical report entitled “ NI 43 ‐101 Technical Report on the Cerro Maricunga Project
Pre‐ Feasibility Study Atacama Region, Chile” dated October 6, 2014 with an effective date
of August 19, 2014, a copy of which document is available under Rio2’s SEDAR profile at
www.sedar.com
ABOUT RIO2 LIMITED
Rio2 Limited is building a multi‐asset, multi‐jurisdiction, precious metals company focused
in the Americas. With the Fenix Gold Project in development in Chile and exploration
platforms in Peru and Central America, Rio2 Limited will continue pursuing additional
strategic acquisitions to compile an attractive portfolio of precious metals assets where it
can deploy its operational excellence and responsible mining practices to create value for
its shareholders. Rio2 Limited has assembled a highly experienced executive team to
generate significant shareholder value, with proven technical skills in the development and
operations of mines and capital markets experience. Through its strategy of acquiring
precious metals assets at exploration, development, and operating stages, the executive
team will grow Rio2 Limited and create long‐term shareholder value through the
development of high‐margin, strong free‐cash‐flowing mining operations.
For more information about Rio2 Limited, please contact:
Alex Black
President and Chief Executive Officer
Email: [email protected]
Telephone: +1 (416) 432 0622
CAUTIONARY STATEMENT ON FORWARD‐LOOKING INFORMATION
Certain information set forth in this news release contains "forward ‐looking statements",
and "forward‐ looking information” under applicable securities laws. Except for statements
of historical fact, certain information contained herein constitutes forward ‐looking
statements, which include plans related to the future exploration and development of the
Fenix Gold Project and the timing for both a revised resource estimate and the completion
of a Feasibility Study on the Fenix Gold Project, and are based on current internal
expectations, estimates, projections, assumptions and beliefs, which may prove to be
incorrect. Some of the forward‐looking statements may be identified by the use of conditional
or future tenses or by the use of such words such as "will”, “expects", “may”, “should”,
“estimates”, "anticipates", "believes", "projects", "plans", and similar expressions, including
variations thereof and negative forms. Rio2 believes the expectations reflected in these
forward-looking statements are reasonable but no assurance can be given that these
expectations will prove to be correct and such forward -looking statements in this ne ws
release should not be unduly relied upon. These statements are not guarantees of future
performance and undue reliance should not be placed on them. Such forward ‐looking
statements necessarily involve known and unknown risks and uncertainties, which may
cause the actual performance and financial results of Rio2 in future periods to differ
materially from any projections of future performance or results expressed or implied by
such forward ‐looking statements. A description of assumptions used to develop s uch
forward-looking information and a description of risk factors that may cause actual results
to differ materially from forward -looking information can be found in Rio2’s disclosure
documents on the SEDAR website at www.sedar.com. Forward-looking statements included
in this news release are made as of the date of this press release and Rio2 disclaims any
intention or obligation to update or revise any forward -looking statements, whether as a
result of new information, future events or otherwise, except as expressly required by
applicable securities legislation.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy
or accuracy of this release