RIO2 Reports Q2 2026 Financial and Operating Results and Webinar
RIO2 REPORTS Q2 2026 FINANCIAL AND OPERATING RESULTS AND WEBINAR
For Immediate Release August 13, 2026
VANCOUVER, BC - Rio2 Limited (“ Rio2” or “ the Company ”) (TSX: RIO; OTCQX: RIOFF; BVL: RIO) reports
financial results for the three months ended June 30, 2026, including operational updates for the Fenix Gold
Mine (“Fenix Gold”) and the Condestable Copper Mine (“Condestable”). Rio2’s consolidated production for
the quarter totaled 13,539 ounces of gold, 75,437 ounces of silver, and 9,296, 883 pounds of copper. All
financial information in this press release is reported in U.S. dollars unless otherwise indicated.
Andrew Cox, President and Chief Executive Officer of Rio2, stated: “Q2 2026 was the second quarter of ramp-
up for Rio2 at Fenix Gold, supported by steady production and cash flows from Condestable. At Fenix Gold,
operational performance continued to improve during the quarter with more work areas opened, more people
employed and the arrival of the principal mining contractor’s mining equipment , all of which we anticipate
will make a meaningful impact to productivities and costs during Q3. As expected, p roduction numbers
improved over Q1 and the mine plan has been adjusted to recover production that w as not previously
achieved. Unusually cold temperatures and snowfall in Q2 presented challenges for the onsite team, but it
was a good lead-in to the coming winter months. At Condestable, operations continued to deliver to plan. The
integration process continues to advance well and is expected to be complete in early Q4.”
Alex Black, Executive Chairman of Rio2, stated: “ Peru and Chile are currently in the midst of one of the
strongest El Niños ever recorded. This weather event began to impact gold production at the Fenix Gold mine
late in Q2 with significant localized snowstorms accompanied by extremely low temperatures , which
continued into July and August. Our priority during these storms has been the safety of our people . Mining
operations were halted when necessary, and we are evaluating the impact of these events to gold production
and the ramp- up. The operations team at Fenix Gold is doing a great job handling the weather challenges ,
maintaining pad leaching, continuing operation of the processing plant , and systematically addressing key
ramp-up constraints. Condestable, on the other hand, is not experiencing the same weather impacts due to its
close proximity to the coast and its low-altitude location.”
Operational and financial results for the Condestable Mine in this press release are presented for the period of
January 30, 2026 (acquisition date) to June 30, 2026.
SECOND QUARTER 2026 HIGHLIGHTS
• Fenix Gold ramp -up is progressing well with key start-up constraints identified and being addressed,
improved production numbers from mining an expanding work area, reduction of staff turnover, and
the introduction of the larger-capacity mining fleet nearing completion. Rio2 is on track to achieve
commercial production in Q4 2026.
• Condestable continued to perform to expectations, providing solid free cash flows from copper, gold
and silver production. Evaluations of both grade enhancement through ore sorting and an expansion of
the plant to 10ktpd are ongoi ng. Rio2 continues to expect to receive approval for the modifications to
the mine EIA during Q3 to expand operations.
• Earnings before interest, tax, depreciation and amortization (“EBITDA”)1 of $76.2 million for the three
months ended June 30, 2026. Adjusted EBITDA 1 of $46.5 million for the three months ended June 30,
2026.
• Income from mine operations of $39.2 million and adjusted net income1 of $17.1 million, compared to
income from mine operations of $0 and adjusted net loss 1 of $0.9 million for the three months ended
June 30, 2025.
• Maintained a strong liquidity position at June 30, 2026 with cash and cash equivalents of $49.7 million,
compared to cash and cash equivalents of $46.4 million as at December 31, 2025.
• Quarterly consolidated gold production of 13,539 ounces and gold sales of 11,071 ounces at an average
realized price of $4,268/oz.
• Q2 2026 total cash costs of $2,701 per ounce of gold sold1 at the Fenix Gold Mine. Fenix Gold Mine
produced 9,088 ounces of gold during the quarter.
• Quarterly copper production of 9,296,883 pounds and copper sales of 9,295,502 pounds at an average
realized price of $5.94 per pound.
• Q2 2026 total cash costs of $2.34 per pound of copper produced1 and AISC1 of $3.10 per pound of copper
produced at Condestable. The 9,296,883 pounds of copper produced was entirely at Condestable.
Condestable also produced 4,451 ounces of gold and 74,374 ounces of silver.
• Cash provided by operating activities in the quarter was $0.3 million, cash used in investing activities
was $12.4 million, and net cash used in financing activities was $31.0 million, compared to cash flow
used in operating activities in the comparative quarter ended June 30, 2025 of $6.2 million, cash used
in investing activities of $29.3 million, and net cash provided from financing activities of $0.2 million.
(1) These are non-IFRS Measures. See Non-IFRS Measures section of this press release for definitions and discussion.
OPERATIONS
Fenix Gold Mine
Mine Production - The Fenix Gold M ine continued through ramp -up during Q 2 2026. While planned tonnes
improved for the q uarter, grade was below plan , as expected, due to a delay in tonnes from Q1 and limited
ability to selectively mine high-grade material. Meaningful progress was made during Q2 in addressing the
previously identified factors impacting the ramp-up:
• Expanding Fenix South – The space constraints in Fenix South were resolved with sufficient area for
three mining fleets to operate during Q2. Mining access has also been established at Fenix Central and
a preliminary break-in bench has been prepared, which will enable more flexibility for mining operations
during the second half of the year.
• Operator availability – The challenges experienced in Q1 employing truck drivers ha ve been resolved ,
retention bonuses and roster changes were implemented, and the rotation of staff is now controlled.
• Truck fleet transition – The mining fleet transition was completed in June with the 35t rental trucks being
replaced by 42t trucks owned by our principal mining contractor STRACON , who is responsible for the
maintenance of the trucks. Improvements to both costs and availability are expected going forward.
Lower tonnes moved reduced ore availability, resulting in lower grade ore being sent to the pad and a lower
than planned head grade at the plant. Management made the decision not to engage in high-grade mining until
planned production rates can be achieved. Mining of higher-grade material (greater than 0.4g/t) is expected to
resume during H2 2026, at which time lower grade material will be sent to the stockpile. To further increase
mine production flexibility, management has also decided to bring forward the commencement of mining at
Fenix Central. Access and break-in work for Fenix Central was completed in Q2 and mining is currently planned
to commence in Q3.
The processing plant performance during Q2 was an improvement on Q1, with the plant processing an average
of 16,300 m3/day of leach solution during June versus an average of 10,700 m3/day during March, with no
serious mechanical stoppages for failures.
On the leach pad, freezing temperatures in May impacted leaching on parts of the pad and brought forward a
trial of various drip line covers. As a result of these trials, the leach pad covers were adjusted to a double layer
black cover which generated a temperature dif ference of a pproximately 12 degrees Celsius between the
ambient temperature and temperature in the pad . Going forward , the entire pad will be covered with these
double layer black covers to minimize pad freezing.
Water transport ramp-up to the mine from Copiapó continued successfully during Q2 with trucking consistently
delivering over 1,000 m3 per day, with a one day record of 1,800 m3, during a trial of trucking over three shifts.
Trucking had to be suspended on two occasions during the quarter as the water storage capacity at the
processing plant was full. The water consumption per ton ne of ore is less than previously estimated
(approximately 75% of design) due to ore from Fenix South having a higher moisture content than anticipated.
The mine has not been water constrained and at the end of June the mine water storage was full for a total on-
site water inventory of 45,000 m3. Significant water flow input to the pregnant leach solution (“PLS”) pond from
the leach pad was observed following a one-day snow event in June. Water capture from snow during winter
months is a welcome bonus to the water needs of the mine.
Blasting fragmentation of mineralized material is working well for the volcanic breccias. Blasting and
fragmentation of harder andesitic and dacitic dome mineralized material, currently approximately 30% of ore
being mined, has been generating a higher amount of oversize material. STRACON and our blasting contractor
(Orica) are working on improving blast design to improve fragmentation.
The ramp-up in Q2 for ore mining saw an increase from 13,600 tonnes per day in April to 16,100 tonnes per
day in June. The mine is expected to achieve 20,000 tonnes per day of ore production during Q3.
Rio2 previously guided gold production at Fenix Gold for 2026 to be 60,000 – 65,000 gold ounces. Due to the
unpredictability and severity of the recent extreme weather events and the ongoing production ramp-up during
H2 2026, Rio2 has decided to defer guidance for the remainder of the year. Despite leaching continuing at the
leach pad and the processing plant continuing to operate, approximately 265,000 tonnes of ore mining was
deferred due to the cessation of mining due to heavy snow events , which in turn led to the deferral of
approximately 5,000 ounces of gold production. While this does not impact the Q2 results, it is a factor in the
forecasting of annual guidance, as the impacts on gold production will likely be felt in August.
Based on current ramp-up progress, Rio2 anticipates achieving commercial production at Fenix Gold in Q4 2026.
Key performance data for the Fenix Gold Mine is summarized as follows:
Three months ended
June 30,
Six months ended
June 30,
2026 2025(2) 2026 2025(2)
Total tonnes mined tonne 2,567,710 N/A 3,777,794 N/A
Ore mined tonne 1,633,680 N/A 2,441,270 N/A
Ore stacked in pad tonne 1,300,620 N/A 1,957,731 N/A
Head Grade (g/t Au) g/t 0.462 N/A 0.459 N/A
Contained ounces in pad oz 19,325 N/A 28,879 N/A
Gold ounces produced oz 9,088 N/A 13,736 N/A
Gold ounces sold oz 6,814 N/A 10,748 N/A
Cash cost per gold ounce sold (1) $/oz 2,701 N/A 2,671 N/A
All-in sustaining cost per gold ounce sold (1) $/oz 2,873 N/A 2,837 N/A
All-in cost per gold ounce sold (1) $/oz 3,392 N/A 3,246 N/A
Silver ounces produced oz 1,063 N/A 1,590 N/A
Silver ounces sold oz 860 N/A 1,374 N/A
Average realized price per gold ounce (1) $/oz 4,163 N/A 4,378 N/A
Average realized price per silver ounce (1) $/oz 70 N/A 75 N/A
(1) See Non-IFRS Measures section of this press release for definitions and discussion.
(2) This information was not available (“N/A”) for Q1 2025 or not applicable as the Company’s only asset was the Fenix Gold Mine and
it did not have production or sales during Q1 2025.
At June 30, 2026, 3,343 gold ounces remained in doré inventory and were not sold before period end. As a result,
reported cash cost, all-in sustaining cost (AISC) and all- in cost (AIC) per gold ounce sold were higher than they
otherwise would have been. For illustrative purposes only, if these gold ounces had been sold during the period,
management estimates that cash costs, AISC and AIC would have been approximately $20/oz, $76/oz and
$247/oz lower, respectively. This estimate does not represent actual resul ts. See the section titled “NON -IFRS
MEASURES AND DEFINITIONS” for more information.
Human Resources – A total of 1,670 personnel (including contractors) are currently employed at Fenix Gold in
mine operations, construction and exploration. 96% of the workforce is comprised of Chileans, with 36% from
the Atacama Region, and 11% are female.
Health & Safety – A total of 765 ,715 person-hours were worked in Q2, with one LTI occurring for an LTIFR of
0.28. The LTI for Q2 was a trip and fall accident in the camp kitchen storeroom, causing injury to a worker’s right
forearm.
Exploration – Exploration drilling has resumed at Fenix Gold for the first time since 2014, marking a key
milestone in advancing the project’s geological understanding and long -term development strategy. The 2026
program comprises 23,190 m of drilling (9,250 m RC and 13,940 m DD), supported by a $9.5 million budget. As
of the end of Q2, execution stands at 50%, with completion expected by late August and the mineral
resource/reserve update on track for year-end.
The program is designed to upgrade resource classification from Inferred to Measured and Indicated and to
expand mineral resources below the reserve pit and up to 100 m beneath the current resource shell. Drill rigs
were mobilized in March, enabling continuous operations throughout Q2.
Fuel Hedging – As a consequence of the Iran War, diesel prices in Chile during Q1 2026 have increased by up to
60%. As the transition from construction to full operations at Fenix Gold progresses, diesel consumption for the
mining fleet and infrastructure will remain an important operating expense. In early March 2026, Rio2 secured
a portfolio of 9 commodity call options (hedges) used to lock in prices to protect against the risk of rising fuel
costs at the mine. These hedge contracts span a nine-month period from April through December 2026, covering
a total volume of 1,575,000 gallons. The protected monthly volume scales up over time, starting at 150,000
gallons in the spring, increasing to 175,000 in the summer, and peaking at 200,000 gallons per month through
the end of the year. The upfront premium paid to secure these nine positions was $622,000.
For the three months ended June 30, 2026, the Company received $257 ,000 in cash on realized gains for the
contracts matured in April and May and had $51,000 in cash receivable for the contract matured in June 2026.
As of the June 30, 2026 valuation date, the combined market value of the open contracts was $284 ,000,
recognized as a commodity derivative asset on the consolidated balance sheet. As of the July 31, 2026 valuation
date, the combined market value of the open contracts was $759,000.
Mine Expansion Study – Work on desalinated water alternatives continues with three potential providers
selected to provide initial estimates for capital and operating costs , and timelines for connecting Fenix Gold to
desalinated water from Copiapó. Results from these providers are now expected to be formally delivered
towards the end of Q3. The selection of one of these providers to supply desal inated water to Fenix Gold will
support completion of the prefeasibility study for the expansion case to increase the production rate to 80,000
tonnes per day. Due to additional time required by the three potential providers to estimate cost and timing,
the completion of the study is now expected in Q4 2026. In anticipation of this study, the Fenix Gold permitting
team have started work on the baseline study for the expanded mine site EIA, which includes expansion to the
existing pits at Fenix North , Central and South to form one combined pit, the expansion of the adsorption,
desorption and recovery plant (“ ADR plant ”), piped water supply, the expanded l each pad footprint, the
expanded waste dump footprint , additional water p onds, grid power connection, a t ruck shop for a large
equipment fleet, and other support infrastructure.
Construction Activities – In 2025, Rio2 expended the critical capital necessary to bring Fenix Gold in to gold
production to begin generating cash flow. For 2026, the plan is to complete the deferred capital expenditures
required for the mine to enter 2027 at a consistent production rate of 20,000 tonnes per day of ore to pad.
During Q2 2026, deferred capital expenditures included leach pad construction for ongoing operations and
completing construction activities around the ADR plant.
The remaining capital planned to be expended in 2026, which will be funded out of cash reserves and cashflow,
is summarized as follows:
TOTAL
USD
Construction 24,175,000
Access Roads 490,000
ADR Plant 7,741,000
Leach Pad Construction 6,577,000
Lime Plant 134,000
Power Generation 2,845,000
Electric Power distribution 86,000
Communications infrastructure 137,000
Onsite laboratory 3,332,000
Truck Workshop 2,515,000
Early Works 237,000
Fuel Station 70,000
PLS Pond 11,000
Sustaining Construction 2,687,000
Preliminary Works 414,000
Camp Infrastructure 707,000
Leach Pad Expansion 1,496,000
Engineering 70,000
Total USD 26,862,000
Condestable Mine
Mine Production - Condestable delivered solid operating performance in Q2 2026, processing over 700,000
tonnes of ore at average grade s of 0.66% copper, 0.24 g/t gold and 3.88 g/t silver. Copper grades were below
planned grades due to higher internal dilution in certain stopes, particularly in June ; however, this was partly
compensated for by higher gold production from higher-grade material.
Unit production costs were $39.5/t, 1% above budget, driven by high -volume haulage fleet constraints; higher
fuel and supplier costs offset by more favourable exchange rates than planned.
Overall processing plant performance remained strong in Q2. Copper recoveries continued marginally below
expectations due to the mining of higher oxide material at shallower depths near the base of oxidation , while
gold and silver recoveries were materially better than budgeted. Mining operations will migrate to deeper levels
over the next two quarters as truck haulage efficiencies are improved in the mine. Condestable produced
9,296,883 pounds of copper , 4,451 ounces of gold and 74,374 ounces of silver during Q2 2026, contained in
concentrate.
Production guidance for 2026 (February to December) is 21,500 – 23,500 tonnes of payable copper equivalent.
Key performance data for the Condestable Mine is summarized as follows:
Three months ended
June 30,
Six months ended
June 30,
2026 2025(2) 2026 2025(2)
Exploration drilling m 1,059 N/A 1,600 N/A
Production drilling m 10,290 N/A 16,980 N/A
Deepening works M 672 N/A 1,328 N/A
Ore mined tonne 726,511 N/A 1,212,699 N/A
Ore treated tonne 725,970 N/A 1,200,311 N/A
Cu headgrade % 0.66 N/A 0.68 N/A
Au headgrade g/t 0.24 N/A 0.24 N/A
Ag headgrade g/t 3.88 N/A 3.96 N/A
Cu recovery rate % 88.05 N/A 88.66 N/A
Au recovery rate % 79.70 N/A 80.59 N/A
Ag recovery rate % 82.23 N/A 82.63 N/A
Copper produced lb 9,296,883 N/A 15,700,071 N/A
Gold produced oz 4,451 N/A 7,652 N/A
Silver produced oz 74,374 N/A 123,045 N/A
Copper sold lb 9,295,502 N/A 15,499,815 N/A
Gold sold oz 4,258 N/A 6,977 N/A
Silver sold oz 72,746 N/A 119,334 N/A
Cash cost per copper pound produced (1) $/lb 2.34 N/A 2.20 N/A
All-in sustaining cost (AISC) per copper
pound (1) $/lb 3.10 N/A 2.99 N/A
All-in cost per copper pound (1) $/lb 3.64 N/A 3.48 N/A
Average realized price per copper pound (1) $/lb 5.94 N/A 5.84 N/A
Average realized price per gold ounce (1) $/oz 4,455 N/A 4,564 N/A
Average realized price per silver ounce (1) $/oz 69 N/A 72 N/A
(1) See Non-IFRS Measures section of this press release for definitions and discussion.
(2) This information was not available (“N/A”) for Q1 2025 or not applicable as the Company’s only asset was the Fenix Gold Mine and
it did not have production or sales during Q1 2025.
Human Resources – A total of 1,745 personnel (including contractors) are currently employed at Condestable in
mine operations, construction activities and exploration. 100% of the workforce is comprised of Peruvians ( of
which 48% are local from the Mala area) and 6% are female.
Health & Safety – A total of 1,048,368 person -hours were worked in Q2 , with two LTIs occurring in Q2 for an
LTIFR of 1.91. The two LTIs were a neck injury resulting from a concentrate truck rollover on site, and a hand
injury resulting from a fall while setting up a drill rig.
Exploration – Condestable has launched a three -part exploration program for 2026. In the first quarter, a
46,480m underground diamond drilling program was initiated with the primary objective of replacing and
augmenting mineral resources, and infill drilling to generate short-term reserve models. This is an annual
activity at the mine; as of the end of Q2, the program is 45% complete. The second objective is to augment and
delineate near-surface mineral resources in the Condestable and Raúl areas. The plan is to generate a Cu -Au-
Ag mineral resource that can potentially be mined using open-pit methods. The near-surface drilling program
will be defined and budgeted during the third quarter of 2026, and its execution will take place in 2027. The
third objective is to carry out a 1:25,000 scale geological-structural mapping of the 46,000 hectares of mining
concessions. In addition, geophysical surveys using drone magnetometry across the entire mining property
were completed. This new data, generated during 2026, will be integrated with the existing multi- element
surface geochemistry in the current database, with the aim of generating new regional exploration targets .
This will be the first time an exploration program of this kind has been carried out across the entire Condestable
land package.
Resource/Reserve Update – Rio2 announced the completion of an updated mineral resource/reserve estimate
("MRE") on June 23rd and the filing of an updated NI 43-101 Technical Report on the Condestable Mine on July
23rd. Total Measured and Indicated Resources of 82.1m tonnes (0.69% Cu, 0.13 g/t Au and 4.12 g/t Ag) and
Inferred Resources of 22.2m tonnes (0.76% Cu, 0.09 g/t Au and 2.78 g/t Ag) increased from the previous figures
published in the 2022 Technical Report. Updated Proven and Probable Reserves of 36.5m tonnes (0.73% Cu,
0.15 g/t Au and 4.28 g/t Ag) underpin a robust post-tax NPV at an 8% discount rate of approximately US$710m
and a 14-year LOM.
Grade Enhancement and Mine Expansion Planning - During Q2, work continued on the ore sorting trial program
at Condestable. Engagement with the third-party equipment supplier resulted in the execution of a pilot plant
contract in mid-July. The pilot plant is expected to arrive at site before November 2026 after undergoing
upgrades to key electrical systems. In the meantime, preliminary infrastructure works at site for the pilot plant
are ongoing.
In addition, the Company’s projects team is continuing the basic engineering, cost estimations and timeline for
the plant expansion and has also engaged third -party consultants to advance the preliminary evaluation for
expanding the mine throughput to10ktpd.
The Company continues to expect to receive approval for the modification of the mine EIA during Q3 2026,
including the environmental approval for increased processing capacity to 10ktpd.
The dry stack filter plant for tailings has been in commissioning during Q2 and is producing filtered tailings. This
process will be incorporated into operations during Q3 as we transition from traditional wet tailings to the dry
stack system. The operation of the filter plant will cover the water requirement for expanded throughput.
The remaining capital planned to be expended at Condestable in 2026, which will be funded out of cash reserves
and cashflow, is summarized as follows:
USD
Sustaining capital 7,536,000
Plant expansion work 473,000
Underground mine preparation for ramp-up 4,191,000
Exploration other areas 2,516,000
Ore sorting trial plant 1,038,000
Tailings filtered plant suppliers 6,291,000
TOTAL 22,044,000
EARNINGS
Selected Financial Information and Operational Highlights
Three months ended
June 30,
Six months ended
June 30,
Financial Results: (in thousands, except per
share amounts)
2026 2025(2) 2026 2025(2)
Copper sales $ 52,180 N/A 84,692 N/A
Gold sales $ 46,996 N/A 77,685 N/A
Silver sales $ 4,322 N/A 8,177 N/A
Pricing adjustments on concentrate sales $ 1,773 N/A 575 N/A
Consolidated revenue $ 105,271 N/A 171,129 N/A
Net income (3) $ 46,804 (1,174) 69,095 (2,772)
Net income per share, diluted $ 0.08 (0.00) 0.13 (0.01)
Adjusted net income (loss) (1) $ 17,092 (880) 28,907 (2,229)
Adjusted net income (loss) per share,
diluted (1) $ 0.03 (0.00) 0.05 (0.01)
EBITDA (1) $ 76,173 (1,330) 117,161 (3,126)
Adjusted EBITDA (1) $ 46,461 (1,036) 76,973 (2,583)
Operating Results:
Copper pounds produced lbs 9,296,883 N/A 15,700,071 N/A
Gold ounces produced oz 13,539 N/A 21,388 N/A
Silver ounces produced oz 75,437 N/A 124,635 N/A
Copper pounds sold lbs 9,295,502 N/A 15,499,815 N/A
Gold ounces sold oz 11,071 N/A 17,725 N/A
Silver ounces sold oz 73,606 N/A 120,708 N/A
Average realized price per copper pound $/lb 5.94 N/A 5.84 N/A
Average realized price per gold ounce $/oz 4,268 N/A 4,447 N/A
Average realized price per silver ounce $/oz 69.32 N/A 71.69 N/A
(1) See Non-IFRS Measures.
(2) Certain comparable information was not applicable (“N/A”) for Q2 2025 as the Company’s only mine was the Fenix Gold Mine during
Q1 2025 and it did not have any production or sales.
(3) Net income refers to net income attributable to the shareholders of Rio2 Limited. The portion attributable to non-controlling interests
arising from the Company's interest in Compañía Minera Condestable S.A. has been excluded.