RIO2 Limited Announces C$17.5 Million Bought Deal Private Placement Led BY a C$9.2 Million Investment from Eric Sprott (IN Canadian Dollars
THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION
IN THE UNITED STATES
RIO2 LIMITED ANNOUNCES C$17.5 MILLION BOUGHT DEAL PRIVATE PLACEMENT
LED BY A C$9.2 MILLION INVESTMENT FROM ERIC SPROTT
(IN CANADIAN DOLLARS UNLESS OTHERWISE STATED )
For Immediate Release July 23, 2019
Vancouver, British Columbia , July 23, 2019 - Rio2 Limited (“Rio2” or the “Company”) ( TSXV: RIO;
OTCQX: RIOFF; BVL: RIO) announces that it has entered into an agreement with Corma rk Securities
Inc. (“Cormark”), pursuant to which Cormark shall purchase 43, 750,000 units of th e Company (the
“Units”) at a price of $0.40 per Unit, on a “bought deal” private placement basis, for aggregate gross
proceeds to the Company of approximately $17.5 million (the “Offering”).
Each Unit will consist of one common share of the Company (a “Co mmon Share”) and one -half of
one Common Share Purchase Warrant (each full warrant, a “Warrant”). Each Warrant will entitle the
holder to acquire one Common Share of the Company at an exercise price of $0.50 for a period of 36
months following the closing of the Offering.
The Company has also granted Cormark an option to sell up to an additional 6 ,562,500 Units at the
offering price up to the Closing Date (the “Opt ion”). In the event that the Option is exercised in its
entirety, the aggregate gross proceeds of the Offering will be $20.1 million.
The Company also announces that Eric Sprott has agreed to purchase $9.2 million of the Offering.
On completion of the Off ering, Eric Sprott will own 19.9% of the issued and outstanding shares of
the Company on a partially diluted basis (excludes potential shares issued from the Option).
The Offering is scheduled to close on or about August 13, 2019 and is subject to certain conditions
including, but not limited to, the receipt of all necessary regulatory and other approvals including
the approval of the TSX Venture Exchange.
Alex Black, President and Chief Executive Officer of Rio2, stated, "This financing is a major mileston e
for Rio2 as it sets the company on a clear path to advance our Fenix Gold Project through the
Environmental Impact Study (EIS) and permitting process in Chile. This work is an essential precursor
to the future construction of the project which when built , will be the only gold oxide heap leach
mine operating in Chile. I would also like to welcome Eric Sprott as a new, large s hareholder of the
company and look forward to working with Mr. Sprott as the Fenix Gold Project is advanced and as
we pursue our str ategy of developing Rio2 into a multi -asset precious metals company focused on
quality mining assets in the Americas.”
The net proceeds of the Offering will be used to complete the following activities for the Company’s
100% owned Fenix Gold Project; compl ete the Project’s EI S baseline study, prepare and file the EI S
study with the Chilean authorities, complete engineering stud ies in preparation for future mine
construction activities, commence permitting activities for the project, commence the review of
financing options for construction of the project and continue social activities related to the project,
as well as for general corporate and working capital purposes.
Fenix Gold Project
The results of the updated prefeasibility study (“PFS”) for Rio2’s 100 % owned Fenix Gold Project
located in the Atacama Region, Chile, are now expected to be released on or about August 30, 2019.
The updated PFS is strategically focused on an optimally configured starter project which will
facilitate the shortest possible ti meline to construction/production, a lower initial capex, higher
grades initially being mined, and a lower initial strip ratio as compared with the 2014 PFS.
Mr. Enrique Garay, MSc. P.Geo (AIG Member), Senior Vice President Geology of Rio2, is the Qualified
Person (as defined by NI 43-101) responsible for managing the Company's exploration programs and
disclosure of drilling re sults. Mr. Garay has read and approved the scientific and technical
information in this news release.
This new release does not cons titute an offer to sell or a solicitation of an offer to buy any of the
securities in the United States. The securities have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities
laws and may not be offered or sold within the United States or to or for the account or benefit of a
U.S. person (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S.
Securities Act and applicable sta te securities laws or an exemption from such registration is
available.
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, Chief Executive Officer & Director
Tel: +1 (604) 260-2696
Email: [email protected]
Cautionary Statement on Forward-Looking Information
Certain information set forth in this news release contains “forward -looking state ments”, and
“forward-looking information under applicable securities laws. Except for statements of historical
fact, certain information contained herein constitutes forward -looking statements, which include
expectations about the timing and completion of the Offering; the use of proceeds from the
Offering; management’s expectations with respect to the Offering; the timing for the comp letion of
the updated PFS; the suitability of the Fenix Gold Project for staged development, including a smaller
starter pro ject; and the potential for the characteristics of the smaller starter project to include
lower initial capex, initial mining of hig her grade ore and a lower strip ratio, all as compared to the
2014 PFS, and are based on Rio2’s 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 for ms. 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 Rio2’s
actual performance and financial results in future periods to differ materially from any projections of
future performance or results expressed or impl ied by such forward-looking statements. These risks
and uncertainties include, but are not limited to: risks and uncertainties relat ing to the completion
of the Transaction and the Offering as described herein, and management’s ability to anticipate and
manage the foregoing factors and risks. There can be no assurance that forward -looking statements
will prove to be accurate, and actua l results and future events could differ materially from those
anticipated in such statements. Rio2 undertakes no obligation to update forward-looking statements
if circumstances or management’s estimates or opinions should change except as required by
applicable securities laws. The reader is cautioned not to place undue reliance on forward -looking
statements. Rio2 disclaims a ny intention or obligation to update or revise any forward -looking
statement, whether as a result of new information, future events or otherwise, except to the extent
required by securities legislation.
Neither the TSX Venture Exchange nor its Regulation S ervices Provider (as that term is defined in
the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or ac curacy of
this release.