RIO2 Designates Process Plant Construction and Civil Contractors FOR the Fenix GOLD Project
RIO2 DESIGNATES PROCESS PLANT CONSTRUCTION AND CIVIL CONTRACTORS
FOR THE FENIX GOLD PROJECT
For Immediate Release SEPTEMBER 28, 2020
Rio2 Limited (“Rio2” or “the Company”) (TSXV: RIO; OTCQX: RIOFF; BVL: RIO) today announces that it
has taken another key step towards the development of its Fenix Gold Project (“the Project”) located
in Chile by selecting the following lead contractors:
Process plant / site infrastructure construction contractor - HLC Ingeniería y Construcción (“HLC”)
Leach pad and civil design contractor - Anddes Asociados S.A.C. (“ANDDES”)
Civil earthmoving and construction contractor - STRACON S.A. (“STRACON”)
Together with Rio2, the companies have executed an early contractor involvement agreement (“ECI
Agreement”) for early works associated with the process plant / site infrastructure, leach pad and
project civil design and construction. Prior to the signing of this ECI Agreement, the parties have been
working exclusively over the past few months in close cooperation with Rio2 management to detail
all project engineering items related to the construction of the Fenix Gold Mine. Detailed engineering
activities fo r the construction of the Fenix Gold Mine are scheduled to be completed in early
November in preparation for project financing.
The scope of works for each contractor includes the following:
HLC - design and construction of the primary crushing and stockpile circuit, ADR plant and
water facilities, lime dosing and leach pad pumping circuit, workshop, warehousing, onsite
offices and dining facilities, onsite power generation and distribution.
ANDDES - engineering design for all civil earthworks, including access roads, water controls,
infrastructure platforms, leach pad and ponds, waste dump and stockpiles. ANDDES will also
provide site-based supervision of all civil works including quality control and assurance.
STRACON - responsible for all earthmo ving and associated activities, all road maintenance
and construction, building and infrastructure platforms, pad and pond construction, waste
dump and stockpile preparation, water controls, water transport for construction purposes
and various support ser vices to HLC and ANDDES as required. These services will be in
addition to their role as lead mining contractor as announced and outlined in a previous press
release dated July 7, 2020.
The commercial terms of the above mentioned contract services wi ll utilize an alliancing -style
commercial framework based on the project configuration, mine plan, methodologies and
productivity estimate assumptions contained in the Fenix Gold Project Pre- Feasibility Study with an
effective date of August 15, 2019 a copy of which document is available under Rio2’s SEDAR profile at
www.sedar.com.
The Fenix Gold Project continues to advance as scheduled and first gold production is estimated for
late H2, 2022.
Rio2 is also pleased to report that the Fenix Gold Project has been recently included in a selected list
of 220 multi-sector projects to be prioritized by the Office of Sustainable Project Management (GPS)
- part of the Chilean Ministry of Economy. This governmental office helps prioritize development
projects that are perceived as environmentally responsible and sustainable and also respectful of their
surrounding communities.
MINE AND INFRASTRUCTURE CONSTRUCTION ALLIANCE
The basis for Rio2 establishing a mine and infrastructure construction alliance with HLC, ANDDES and
STRACON at the Fenix Gold Project is a best for project business strategy. Together with the three
contractors, the Rio2 management team collaborated, implemented and executed with this same
approach when they built the La Arena and Shahuindo gold mines in Peru with Rio Alto Mining Limited.
In the case of the Fenix Gold Project mine and infrastructure construction alliance, Rio2, HLC, ANDDES
and STRACON will work together as an integrated team, dedicated to exceeding goals, controlling
budgets and adding value through exceptional performance while working in a safe and
environmentally sustainable manner focused on every detail of the construction process. The alliance
will implement an inclusive social policy as a priority based on the hiring of local personnel and service
companies from Copiapó and the Atacama Region.
The principal characteristics of a successful alliance are;
• collective responsibility;
• collective sharing of risks and opportunities; and
• no fault, no blame philosophy leading to no disputes between the owner and contractors.
The payment model of an alliance includes;
• reimbursement of 100% of contractor’s project costs plus a fee (corporate overheads and
profit);
• a KPI based regime that rewards for outstanding performance and penalizes poor
performance; and
• unanimous, best for project, management and decision making and the selection of an
integrated owner/contractor team on the basis of best person for each position and avoiding
duplication of roles.
Benefits of an alliance;
Both owner and contractors work together to:
• achieve project objectives by aligning the commercial framework and objectives of the
participants;
• collectively manage project issues and risks;
• collectively own the project risks, and outcomes;
• encourage a collaborative, flexible approach to the management of the project;
• ensure a strong focus on collaboration to achieve win-win solutions;
• manage the project with open book transparency of all costs providing the owner confidence
in the robustness of both the estimate and actual cost outcomes;
• focus on achieving outcomes rather than exchange of contractual dispute letters; and
• eliminate the duplication of resources.
Alex Black, President & CEO of Rio2, stated, “The signing of this ECI Agreement with HLC, ANDDES and
STRACON forms another key part of Rio2’s strategy to prepare for next years’ construction phase of
our Fenix Gold Project. The Rio2 management team is plea sed to work again with HLC, ANDDES and
STRACON, this time in Chile, and look forward to further optimizing the mining and construction
solution for the Project in preparation for next years’ construction program. With only a handful of
new gold mining proj ects entering into construction next year, Rio2’s Fenix Gold Project is set to
become a notable and impactful Latin American gold producer in 2022.”
ABOUT HLC
HLC is a leading company specializing in Engineering, Manufacturing and Construction solutions with
more than 20 years of industry leading experience having developed projects in Peru and throughout
Latin America in the Mining-Metallurgical, Hydrocarbon and Industrial sectors. HLC prides itself in its
multi-skilled professional team, its technical e xcellence, its wide- ranging quality of service and
commitment to its clients whilst focusing on safe work practices and respecting the environment.
ABOUT ANDDES
ANDDES is a company specializing in advisory and consulting services for the development and
supervision of environmental, engineering and construction projects, mainly in the field of mining.
The company is led by professionals with many years of experience in the development of mining
projects in Peru, Chile, Argentina, Brazil, Mexico and Colombia. The experience of the company and
staff, and that of its strategic alliances, allow it to provide a high -quality standard of services with
innovative and efficient solutions, generating value for its clients and their stakeholders.
ABOUT STRACON
STRACON is a leading provider of contract mining and construction services, operating throughout the
Americas. Headquartered in Peru, STRACON has built a sustainable business based on providing
efficient and innovative services. In doing so, STRACON has de veloped a reputation for successful
project delivery in Latin America, across a range of commodities. STRACON’s commitment to providing
safe and efficient services, coupled with its experience in building and operating greenfield projects,
similar to that of the Fenix Gold Project, means it is well placed to meet Rio2’s construction and mining
requirements.
ABOUT RIO2 LIMITED
Rio2 is a mining company with a focus on development and mining operations with a team that has
proven technical skills as well as a successful capital markets track record. Rio2 is focused on taking its
Fenix Gold Project in Chile to production in the shortest possible timeframe based on a staged
development strategy. In addition to the Fenix Gold Project in development in Chile, Rio2 Limited
continues to pursue additional strategic acquisitions where it can deploy its operational excellence
and responsible mining practices to build a multi -asset, multi-jurisdiction, precious metals company
focused in the Americas.
Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively
“forward-looking information”) within the meaning of applicable securities laws relating to Rio2’s
planned development of its Fenix Gold Project and other aspects of Rio2’s anticipated future operations
and plans. In addition, without limiting the generality of the foregoing, this news release contains
forward-looking information pertaining to the following: the potential development of a mine at the
Fenix Gold Project, the potential characteristics and benefits of a Fenix Gold Project construction
alliance with HLC, ANDDES and STRACON, the potential to enter into contracts with HLC, ANDDES and
STRACON and their respective scope and terms, the potenti al number of jobs created through the
construction and operation of a mine at the Fenix Gold Project, the potential timing of the
commencement of construction and production at the Fenix Gold Project, certain anticipated economic
benefits of a mine at the Fenix Gold Project to the local region, the potential for the Fenix Gold Project
to receive benefits associated with being prioritized by the Office of Sustainable Project Management
and other matters ancillary or incidental to the foregoing.
All stateme nts included herein, other than statements of historical fact, may be forward- looking
information and such information involves various risks and uncertainties. Forward- looking
information is often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”,
“continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”,
“could”, “might”, “should”, “believe”, and similar expressions. The forward- looking information is
based on certain key e xpectations and assumptions made by Rio2’s management, including but not
limited to: expectations concerning prevailing commodity prices, exchange rates, interest rates,
applicable royalty rates and tax laws; capital efficiencies; legislative and regulator y environment of
Chile; future production rates and estimates of capital and operating costs; estimates of reserves and
resources; anticipated timing and results of capital expenditures; the sufficiency of capital
expenditures in carrying out planned activ ities; performance; the availability and cost of financing,
labor and services; and Rio2’s ability to access capital on satisfactory terms.
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 news release should not be unduly relied upon. A description of assumptions used
to develop such 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 SE DAR website at www.sedar.com . Forward-looking statements included in this
news release are made as of the date of this news release and such information should not be relied
upon as representing its views as of any date subsequent to the date of this news release. Rio2 has
attempted to identify important factors that could cause actual results, performance or achievements
to vary from those current expectations or estimates expressed or implied by the forward- looking
information. However, there may be other factors that cause results, performance or achievements
not to be as expected or estimated and that could cause actual results, performance or achievements
to differ materially from current expectations. 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.
To learn more about Rio2 Limited, please visit: www.rio2.com or Rio2's SEDA R profile at
www.sedar.com.
ON BEHALF OF THE BOARD OF RIO2 LIMITED
Alex Black
President, CEO & Director
Email: [email protected]
Tel: 1 (604) 260-2696
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts the responsibility for the adequacy or accuracy of this
release.