RIO2 Provides Fenix GOLD Eia Plan Update
RIO2 PROVIDES FENIX GOLD EIA PLAN UPDATE
For Immediate Release September 7, 2022
Vancouver, BC - Rio2 Limited (“Rio2” or “the Company”) (TSXV: RIO; OTCQX: RIOFF; BVL: RIO) is
providing an update of its activities following the announcement made on July 5, 2022, with respect
to the Atacama Regional Evaluation Commission’s decision not to approve the Environmental Impact
Assessment (“EIA”) for its Fenix Gold Project (“the Project”) in Chile.
The Environmental Qualification Resolution (“RCA”) which is the administrative document with which
the Environmental Assessment Service (“SEA”), outlines the rationale for their decision, was issued on
July 19, 2022. Since the receipt of this document, the Company, along with its Chilean environmental
and legal advisors, have been evaluating options to continue to advance the Project.
On review of the RCA, Rio2 has identified numerous discrepancies with factual and procedural matters
in the RCA, which it believes provides grounds for a strong case for the decision to be reviewed in a
non-judicial administrative appeal before a Committee of Ministries. The Committee of Ministries is
composed of the Ministries of Environment (Chairman), Health, Economy, Agriculture, Energy and
Mining. The national director of SEA is the secretary of the Committee.
After a thorough review of the RCA, in collaboration wit h the Company’s external legal counsel and
environmental consultants, Rio2 maintains its conviction that during the environmental assessment
process of the Fenix Gold Project’s EIA, the Company provided all the information requested by the
different agencies and addressed, with the highest technical standards, the observations raised during
the process. It should be noted that on completion of the rigorous EIA process, 18 agenci es issued
their technical conformity to the Project . Furthermore, Rio2 is particularly proud of its social
engagement strategy over the past four years that paved the way for the successful completion of the
Participación Ciudadana ( Public Consultation ) an d Consulta Indígena (Indigenous Consultation)
processes resulting in favorable agreements with the indigenous communities directly impacted by
the Project.
Based on the findings of the RCA review, Rio2’s local subsidiary Fenix Gold Limitada (“Fenix Gold”)
decided to exercise its right to file an administrative appeal before the Ministries Committee and filed
the appeal on August 31, 2022.
The basis of the administrative appeal was based on the following key findings:
(a) The Fenix Gold Project was presented for environmental assessment through an EIA, which
is the most stringent instrument contemplated by Chilean Environmental Law. The EIA also
included a successful public consultation process and successful special consultation process
for indigenous communities, under the rules of the OIT No. 169 International Convention;
(b) The rejection of the EIA is not based on legal incompatibilities that cannot be overcome, but
on the need, according to the authorities´ view, to provide additional information to discard
potential risks to Chinchilla chinchilla, Lama guanicoe and Vicugna vicugna;
(c) Fenix Gold provided quality information in the EIA to demonstrate there were no significant
risks to the aforementioned fauna species. This finding was incrementally strengthened and
supported during the process through additional observation campaigns and data
compilation, in direct response to the authorities’ requests;
(d) The observation campaigns and technical information produced by Fenix Go ld and its
external advisors were prepared using the methodologies and guidelines approved by the
authorities and consistent with similar precedents in the area;
(e) Certain requests or observations from the authorities, incorrectly referred to by the RCA as
“not addressed” by Fenix Gold, were made after the assessment process was closed, in which
it is not legally possible for the company to present additional answers. Making requests or
observations after the EIA process is closed is not consistent with the nature and rules of the
environmental impact assessment process.
As a result of these key findings, Rio2 is of the view that the rejection of the Project is not consistent
with the environmental assessment process that took place over the past two years, and, therefore,
the Company believes there are strong legal and technical grounds for seeking the review of the RCA
before the Ministries Committee, which has the faculties to reverse the decision made at the regional
level.
In parallel with the adminis trative appeal process Rio2 will work closely with regional authorities to
conduct additional observations of fauna in the Project area and to agree on new voluntary
commitments, if required, to address any remaining concern s that the authorities may requi re to
guarantee the sustainable execution of the Project. This additional work will not only provide a
positive contribution during the administrative appeal process but can also be used for a resubmission
of a new EIA, should Fenix Gold’s appeal not be successful.
TIMING
Based on feedback from its external legal counsel and advisors, the estimated timing for obtaining EIA
approval for the Fenix Gold project is approximately one and half to two years. The estimated timing
for the administrative appeal process is approximately one year, based on the experience of the
Company’s external legal counsel. The estimated timing for the preparation and resubmission of a
new EIA (only req uired if the administrative appeal is unsuccessful) is approximately two years. As
previously mentioned, these two activities will occur in parallel.
FUNDING
As of June 30, 2022, the Company had cash of approximately US$13.5M and working capital of
approximately US$11M, which had been allocated to pre -development activities for the Project and
the Company remains debt free. To date, a significant amount of money has been invested in the pre-
development of the Project, including the construction of the camp facilities at its infrastructure
subsidiary, Lince S.A., pre-fabrication of elements of the processing plant, and water loading facilities
in Copiapo.
All contracts with third -party contractors/suppliers have either been suspended or terminated and
staff numbers in Chile, Peru, and Canada have been reduced from 82, prior to the rejection of the EIA,
to 22 at the current time.
Additional funding will be required during the next two years and the Company is currently
investigating the merits of launching a strategic review process to assess potential sources of future
funding.
CHILE’S CONSTITUTIONAL REFORM PROCESS
Chilean voters resoundingly rejected a new, progressive constitution in a referendum held on Sunday
September 4, 2022 following a nearly two-year process that aimed to reflect a broad array of voices
in the nation’s proposed new constitution.
With the ballots counted, 62% of voters rejected the proposal with 38% voting in favor, according to
the Chile Electoral Service. The proposed constitution was rejected in all of Chile’s provinces, with 60%
of voters rejecting the proposal and 40% voting in favor in the Atacama Region, where the Fenix Gold
Project is located.
As a result of the vote, all political parties have vowed to work with the current government to develop
a new constitution that better reflects the wishes of the Chilean people. There is currently no publicly
announced timeframe for the preparation of a new constitution.
FENIX GOLD PROJECT
The Fenix Gold project is one o f the largest undeveloped gold oxide, heap leach projects in the
Americas, hosting a Measured and Indicated mineral resource (as such term is defined in National
Instrument 43-101 -Standards of Disclosure for Mineral Projects, “ NI 43-101”) of 5 Million oun ces of
gold which the Company believes will make a positive contribution to the Atacama Region and Chile.
The Project is an example of modern gold mining where a full complement of technical,
environmental, and social considerations have been consulted on and designed in from the outset.
The Project represents a significant investment in the gold mining business in Chile by a junior mining
company of approximately US$210M of initial and sustaining capital and will generate employment
for at least 1,200 people during the construction phase and 550 people during the 17 years operations
phase. The mine being contemplated at the Project will be a run -of-mine heap leach operation, no
crushing or tailings storage facilities are required thereby minimizing the overall impact and footprint
of the Project.
TECHNICAL INFORMATION
The scientific and technical content of this news release has been reviewed, approved and verified by
Enrique Garay, MSc. P. Geo (AIG Member), a consultant to Rio2 Limited, who is a QP under NI 43-101
has also reviewed, approved and verified the scientific and technical content of this news release. For
additional information regarding the Project, including key parameters, assumptions and risks
associated with its development, see th e independent technical report entitled “ Updated Pre-
Feasibility Study for the Fenix Gold Project, Atacama, III Region, Chile” dated August 3, 2021, with an
effective date of August 15, 2019, a copy of which document is available under Rio2’s SEDAR profile
at www.sedar.com
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. Rio2 and its wholly owned subsidiary, Fenix Gold Limitada, are companies with
the highest environmental standards and responsibility with the firm conviction that it is possible to
develop mining projects that respect the three axes (Social, Environment, Economics) of sustainable
development. As related companies, we reaffirm our commitment to apply environmental standards
beyond those that are mandated by regulators, seeking to protect and pr eserve the environment of
the territories that we operate in.
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 the 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: Rio2’s decision to appeal the RCA and the timing of
such appeal process; the timing for the potential preparation and resubmission of a new E IA; the
consideration and potential implementation of a strategic review proces s to assess future financing
sources; the undertaking of an action plan to address the concerns raised in the RCA; the potential
development of a mine at the Project and the expected capital investment required for such mine;
development and operating plans; certain anticipated economic benefits of a mine at the Project to
the local region and other matters ancillary or incidental to the foregoing.
All statements 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 expectations and assumptions made by Rio2’s management which may prove to
be incorrect, including but not limited to: expectations concerning the appeal of the RCA and the
timeline of such process; expectations concerning prevailing commodity prices, exchange rates,
interest rates, applicable royalty rates and tax laws; capital efficiencies; legisl ative and regulatory
environment of Chile; future production rates and estimates of capital and operating costs; estimates
of reserves and resources; anticipated results of capital expenditures; the sufficiency of capital
expenditures in carrying out planned activities; 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 ri sk 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. These risks and uncertainties include, but are
not limited to: risks and uncertainties relating to the completion of the financings as described herein,
and management’s ability to anticipate and manage the factors and risks referred to herein. 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 after 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 expre ssly 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: +51 992794655
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.