RIO2 Executing ON Fenix GOLD Optimization Plans with the Purchase of Strategic Infrastructure
RIO2 EXECUTING ON FENIX GOLD OPTIMIZATION PLANS WITH THE
PURCHASE OF STRATEGIC INFRASTRUCTURE
For Immediate Release April 15, 2020
Rio2 Limited (“Rio2” or the “Company”) (TSXV: RIO; OTCQX: RIOFF; BVL: RIO) today announces that it
has completed the strategic acquisition of Compañía Minera Paso San Francisco S.A. (“MPSF”). MPSF
owns strategic mining infrastructure and facilities located adjacent to Rio2’s Fenix Gold Project in
Chile.
MPSF has been acquired by Rio2 for USD 1.5 million cash from Inversiones Alxar S.A. (“Alxar”), a
subsidiary of Empresas Copec S.A., a large Chilean industrial conglomerate.
The existing MPSF processing plant was established in the early 1990s by a previous owner to process
gold and silver ore from the nearby Can-Can, Arqueros and Caique mines. Processing of ore from those
mines ceased in 2005 and between 2008 and 2013, the plant reprocessed the tailings produced from
previous ore processing at the production rate of 800 tonnes per day. In 2013, MPSF acquired the
processing plant and associated infrastructure which have remained inactive since then.
The acquisition of MPSF brings several strategic benefits to Rio2 and its optimization plans for the
development of its nearby Fenix Gold Project, currently guided to commence construction in Q4 2021.
These strategic benefits include:
• The facilities at MPSF are located less than 2 kilometres from the currently proposed location
of the Fenix Gold Camp, 22 kilometres from the future Fenix Go ld Mine site, and 1.5 hours
drive from Copiapo.
• The facilities at MPSF have a camp, connection to grid power, permitted water, a fuel station
that will be reactivated , internet access, plus several hectares of free space available to
expand infrastructure and facilities.
• The existing camp at MPSF provides a comfortable base to work from at an elevation of
3,200m above sea level and it has a current capacity for 250 people that with refurbishment,
can act as the Fenix Gold Project’s construction camp.This will assist in accelerating the startup
of the construction of the Fenix Gold Project.
• Rio2 will evaluate the viability of modifying its current plan to build a standalone camp and
instead utiliz e the infrastructure and facilities at MPSF to save on capital costs and
construction time.
The potential future conversion of the power supply at the Fenix Gold Project, from generated
power to grid power, can be simplified with MPFS’s existing power and infrastructure agreements.
Access to the power grid will have a positive impact on the currently estimated energy costs for
the Fenix Gold Project.
The facilities at MPSF include a water bore which has permitted usage of 5 litres per second which is
20% of the water requirements for the current configuration of the Fenix Gold mine, at a throughput
rate of 20,000 tonnes per day. Access to this water will have a positive impact on the water costs
currently estimated for the Fenix Gold Project.
FINANCIAL STATUS
The acquisition of MPSF has been funded from existing cash reserves.
As of December 31, 2019, Rio2 had working capital of CAD 15,819,198.
The Company remains prudent with its cash as it advances the Fenix Gold Project to the construction
stage in Q4 2021. In addition, Rio2 terminated its exploration earn -in agreement in December 2019
with Nexa Peru S.A.A.. The termination of this agreement enabled the Company to save USD 1.5
million which it was scheduled to expend in 2020.
Based on current budgeting and projections, the Company is funded through to at least the end of Q1
2021. A technical and corporate update will be provided over the coming weeks regarding the
progress being made for the development of the Fenix Gold Project.
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 sho rtest 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 the
anticipated benefits to be derived by Rio2 and the planned development of its nearby Fenix Gold
Project from the acquisition of MPSF including Rio2 ’s plans, strategy, objectives and other aspects of
Rio2’s anticipated future operations and Rio2 ’s financial, development and operating plans. In
addition, without limiting the generality of the foregoing, this news release contains forward- looking
information pertaining to the following: timing of the commencement of construction at the Fenix Gold
Project and other matters ancillary or incidental to the foregoing.
All stat ements 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 ke y expectations 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 regulatory environment of
Chile; anticipated timing and results of capital expenditures; the sufficiency of capital expenditures in
carrying out planned activities; performance; the availability and cost of financing, labour 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 SEDAR 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 no r 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.