Company Interviews

Interview with Dan Dickson, CEO of Endeavour Silver Corp.

Our previous interview: https://www.cruxinvestor.com/posts/silver-steals-the-spotlight-once-more-5425

Recording date: 8th November 2024

Endeavour Silver, a mid-tier precious metals producer, is on the cusp of a significant growth inflection point as it prepares to bring the Terronera silver project online. Located in Mexico's Jalisco state, Terronera is expected to double Endeavour Silver's production profile to 15 million silver equivalent ounces (AgEq oz) while simultaneously cutting all-in sustaining costs (AISC) in half. This transformational expansion is slated to commence commissioning by year-end 2024.

The Terronera project carries a total price tag of $271 million, of which Endeavour Silver has already invested $258 million. With $55 million in cash on the balance sheet at the end of Q3 and another $35 million in untapped credit, the company appears well-funded to complete the remaining build-out. Once operational, Terronera has the potential to generate robust free cash flow - an estimated $120 million in after-tax FCF in its first full year at current silver prices. This could enable Endeavour Silver to rapidly deleverage, with the potential to pay off the entire $120 million project debt in Year 1.

Beyond Terronera, Endeavour Silver is advancing the Pitarrilla project as the next leg of growth. Acquired in 2022, Pitarrilla hosts an indicated resource of over 693 million AgEq oz (Inferred 151 million AgAq oz), positioning it as one of the world's largest undeveloped silver deposits. With a goal of becoming a senior silver producer (defined as 25 million AgEq oz annually), Endeavour Silver views Pitarrilla as the key to unlocking further scale and margin expansion.

Underpinning Endeavour Silver's growth trajectory is a constructive outlook for silver fundamentals. Silver demand for industrial applications has surged over the past 15 years, rising from 200-250 million ounces to 550 million ounces today. This trend appears well-entrenched, driven by silver's essential role in the electrification and decarbonization of the global economy. Additionally, silver's monetary investment case has begun to reassert itself, with prices rallying from $26 to over $34 per ounce since September. As investor interest in silver's store of value properties continues to build, it could provide a further tailwind to prices.

Given the company's impending production growth, margin expansion potential, and precious metals optionality, this appears inexpensive compared to senior peers. As Terronera ramps up and Pitarrilla advances, investors may start to award Endeavour Silver a greater multiple in recognition of its increased scale and portfolio quality.

Risks remain - namely operational execution at Terronera and continued political stability in Mexico. However, for investors seeking pure-play exposure to silver's myriad demand drivers, Endeavour Silver may offer a compelling organic growth story bolstered by a strong balance sheet and an attractive relative valuation. As the Terronera catalyst approaches, Endeavour Silver feel they are well-positioned to deliver transformational returns.

View Endeavour Silver's company profile: https://www.cruxinvestor.com/companies/endeavour-silver

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Interview with John Cash, CEO of Ur-Energy Inc.

Our previous interview: https://www.cruxinvestor.com/posts/ur-energy-amexurg-positioned-to-benefit-uranium-market-bull-run-5501

Recording date: 7th November 2024

Ur-Energy (AMEX:URG) is a U.S.-based uranium producer well-positioned to capitalize on the increasingly favorable outlook for nuclear power and rising demand for domestically sourced uranium. The company's flagship Lost Creek in-situ recovery (ISR) project in Wyoming is currently ramping up production towards its licensed capacity of 1.2 million pounds of U3O8 per year. Ur-Energy is also advancing its Shirley Basin ISR project, which is expected to come online in late 2025 or early 2026 and will boost the company's total production capacity to 2.2 million pounds per year.

While the Lost Creek ramp-up has faced some challenges related to hiring experienced personnel and securing drill rigs, CEO John Cash emphasized in a recent interview that good progress is being made on these fronts. He also highlighted Ur-Energy's strong financial position, with $110 million of cash on hand, $33 million of expected revenues in Q4 2024, and no debt. This provides the company with ample resources to fund its growth initiatives.

Looking ahead, Ur-Energy is focused on signing long-term uranium supply contracts with U.S. utilities at increasingly higher prices. Notably, about 50% of the company's licensed production capacity over the next six years is currently uncontracted, providing significant leverage to further gains in uranium prices. This is particularly important given that domestic U.S. uranium production is in very short supply, with only a handful of companies like Ur-Energy working to increase output. This dynamic bodes well for Ur-Energy's ability to command premium pricing in future contracts.

On the political front, the Republican Party's victory in the recent midterm elections – including the return of President Trump to the White House – is seen as a positive development for Ur-Energy and other U.S. uranium miners. The Trump administration is expected to pursue policies that are supportive of domestic mining and work to streamline regulatory burdens, such as restoring uranium's status as a critical mineral.

More broadly, nuclear power enjoys strong bipartisan support in the U.S. as a vital tool for decarbonizing electricity generation and enhancing energy security. This was evidenced by the unanimous passage of the Russian uranium ban earlier this year. Policy tailwinds at the federal level should help to accelerate demand growth and improve the operating environment for uranium companies like Ur-Energy.

In conclusion, Ur-Energy appears to be in a strong position to benefit from robust fundamentals in the U.S. uranium market. With a growing production profile from its Lost Creek and Shirley Basin projects, significant exposure to rising uranium prices through its future contracting, a solid balance sheet, and a favorable political backdrop, the company offers investors a compelling way to gain leverage to the unfolding nuclear power growth story.

While some risks remain, particularly around the pace of the production ramp-up and future contract pricing, the overall risk/reward appears skewed to the upside for Ur-Energy at current share price levels. As the U.S. and other countries increasingly look to nuclear energy as a clean, reliable source of baseload power, uranium miners with strong domestic supply capabilities like Ur-Energy should be well-positioned to create value for shareholders in the years ahead.

View Ur-Energy's company profile: https://www.cruxinvestor.com/companies/ur-energy-inc

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Interview with Chris Showalter, Director & CEO of Lifezone Metals Ltd.

Recording date: 7th November 2024

Lifezone Metals is an emerging battery metals company offering investors unique exposure to the electric vehicle (EV) supply chain. The company's key asset is the Kabanga nickel-cobalt project in Tanzania, which ranks as one of the largest and highest-grade undeveloped nickel sulphide deposits globally (25.8 Mt measured and indicated resources at 2.63% Ni, 0.35% Cu and 0.2% Co with additional 14.6 Mt Inferred resources) and would become a globally significant source of responsibly produced battery metals.

What sets Lifezone apart is its proprietary hydrometallurgical technology, which allows the company to optimally process ore and unlock value from complex deposits. Lifezone's ability to design bespoke process flow sheets positions it to become a "solution provider" to the industry. The company aims to not only develop Kabanga but also deploy its technology to other projects via partnerships, generating a royalty stream.

Lifezone's strategy is significantly de-risked through its partnerships with two mining majors. BHP has invested $100 million for the Kabanga project, with an option to increase to 60% and a floor valuation of 7x the project's post-DFS NPV. This provides downside protection and validates the project's world-class potential. Separately, Lifezone has a 50/50 joint venture with Glencore to apply its hydromet technology to recycling PGMs from autocatalysts in the US.

Completion of the Kabanga DFS in H2 2024 is a major near-term catalyst. This will firm up project economics and trigger BHP's option to increase its stake. Concurrently, Lifezone is negotiating offtake agreements with parties like Japan's JOGMEC, which will underpin project financing. The company has a clear pathway to a fully funded Final Investment Decision by leveraging BHP's investment, debt financing, and its offtake rights.

The investment opportunity is buoyed by Kabanga's potential to supply the lowest carbon intensity nickel to Western EV makers. With a projected CO2 footprint of 3-5t per tonne of nickel vs. the much higher levels of Indonesian producers, Lifezone is well-positioned to earn a "green premium". This is increasingly important as EV makers look to reduce their Scope 3 emissions and diversify from Chinese-controlled supply chains.

Lifezone's assets are located in Tanzania, which is highly prospective for nickel but previously considered high-risk. However, the government has taken significant steps to improve the investment climate, including launching a mining tax review and committing to infrastructure development. Tanzania's progress, combined with BHP's backing, substantially mitigates jurisdictional risk.

In summary, Lifezone presents a differentiated battery metals investment leveraged to the EV revolution. The company's large, high-grade resource base, clean processing technology, and top-tier partnerships create a compelling risk-reward proposition. With a value-accretive pathway to production and multiple near-term catalysts on the horizon, Lifezone is well-positioned to deliver shareholder returns as the world electrifies.

View Lifezone Metals' company profile: https://www.cruxinvestor.com/companies/lifezone-metals

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Interview with Chad Peters, President & CEO of Ridgeline Minerals Corp.

Our previous interview: https://www.cruxinvestor.com/posts/ridgeline-minerals-tsxvrdg-leveraging-partnerships-for-gold-and-copper-exploration-success-6064

Recording date: 7th November 2024

Ridgeline Minerals (TSXV:RDG) announced a significant high-grade gold discovery from its Swift project in Nevada. The company intersected 2.7 meters grading 7.0 g/t gold, including 1.1 meters at 10.4 g/t, in a joint venture with Nevada Gold Mines (NGM), a partnership between majors Barrick and Newmont.

The intercept is the first high-grade hit at Swift after initial holes encountered widespread low-grade mineralization. It confirms the project's potential to host economic gold deposits in line with other major mines in the region. Notably, NGM's reserves in the district average 7.3 g/t gold, putting Swift's 7.0 g/t intercept in the ballpark.

Ridgeline's CEO Chad Peters emphasized the significance of the discovery, stating, "We now know this project can host high-grade gold and it's of comparable grade to multiple producing mines in the Cortez District that are being operated by Nevada Gold Mines."
The company is clearly excited, but the market appears to be taking notice too. Barrick specifically referenced the Swift project and its drill results in its latest quarterly MD&A, a strong vote of confidence in the project's potential.

Ridgeline has several upcoming catalysts for Swift and its other projects:
NGM is obligated to spend US$12M on Swift over the next 2 years to earn a 60% stake, with the project reverting to Ridgeline if the spending commitment isn't met
The company expects NGM will likely drill another 7-10 holes to further delineate the high-grade zone and build out the geologic model
At the Selena project, partner South32 is funding a US$400,000 geophysics program to refine sulfide drill targets
Ridgeline's Black Ridge project is being advanced to a potential drill program with NGM

In total, the company anticipates its partners could spend US$7-10 million across its projects in 2025. This level of externally-funded exploration is a testament to the strength of Ridgeline's prospect generator business model, which allows it to advance multiple projects simultaneously while minimizing shareholder dilution.

The Swift discovery also highlights the advantages of exploring in Nevada. The state hosts multiple world-class gold districts and attracts the interest and investment of the world's largest gold miners. For a junior like Ridgeline, a discovery in this environment has a clear path to monetization, whether through an outright sale, a spinout, or other mechanism.

With a tight share structure, experienced management team, and multiple shots on goal in a top-tier jurisdiction, Ridgeline has positioned itself as an attractive speculative play in the junior gold space. If the company can continue to deliver exploration success and prove up the potential of its project portfolio, it could be poised for a significant re-rating in the market.

While early-stage exploration plays are inherently high-risk, Ridgeline's Swift discovery goes a long way in validating the company's technical acumen and business model. For investors with an appetite for exploration upside, Ridgeline is a story to watch closely. Upcoming drill results from Swift and progress at the company's other projects could provide ample catalysts to drive the stock higher in the months ahead.

View Ridgeline Minerals' company profile: https://www.cruxinvestor.com/companies/ridgeline-minerals

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Interview with Dr. Mike Jones, MD of Impact Minerals Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/impact-minerals-asxipt-global-scale-low-cost-high-purity-alumina-5270

Recording date: 7th November 2024

Investors seeking exposure to the high-growth high-purity alumina (HPA) market should take a close look at Impact Minerals (ASX:IPT). This junior explorer is developing the Lake Hope Project in Western Australia, which has the potential to become one of the world's lowest-cost sources of 4N (99%) HPA.

Impact's key advantage lies in its innovative processing route, which utilizes an alkaline pre-treatment step along with membrane technology to reduce the material before the standard acid leach process. As Managing Director Dr. Mike Jones explains, "It's just raw clay and it goes into this alkaline leach. It actually spits out very high quality potash as the first byproduct...What we're left with is actually a volume of material that's only half what we started with."

By effectively halving the mass of material to be processed, Impact can dramatically reduce its acid consumption compared to other HPA projects. Dr. Jones estimates the company's acid requirements will be 50% lower than competitors on a per-ton basis, translating to significantly lower operating costs.

With HPA demand forecast to grow strongly thanks to rising uptake in LEDs, semiconductors, and lithium-ion batteries, Impact's low-cost production could prove a key differentiator in the market. The company is initially targeting 10,000 tpa of HPA production, with a definitive feasibility study (DFS) slated for completion by 2027.

To fast-track its path to production, Impact has secured a $2.9 million government grant to construct a pilot plant and optimize its HPA process in partnership with CPC Engineering and Edith Cowan University. The pilot plant is scheduled for commissioning by mid-2025 and will enable Impact to produce customer samples for offtake discussions.

The company has also been assembling an experienced management and technical team to guide the Lake Hope project through to development. Recent appointments include an ex-Tianqi Lithium marketing executive to lead offtake negotiations and two process engineers with prior experience building an HPA plant. While Impact's initial focus is on supplying HPA to the LED, semiconductor, and sapphire glass markets, the company is also exploring potential new applications through additional R&D projects. With the Li-ion battery market seen as a key growth driver, the company has applied for further grants to develop new HPA uses.

As the Lake Hope project continues to advance, Impact's low-cost, high-purity HPA looks well positioned to disrupt the market. With a DFS on track for 2027, pilot plant construction fully funded, and a team experienced in specialty chemicals projects, the company appears to have a clear path to production.

For investors, the next 12 months should provide a steady stream of catalysts as Impact hits key milestones in the HPA growth story. 

View Impact Minerals' company profile: https://www.cruxinvestor.com/companies/impact-minerals

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Interview with Greg Bittar, CEO of Lotus Resources Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/lotus-resources-asxlot-a-strategic-play-in-the-resurgent-uranium-market-5690

Recording date: 7th November 2024

Lotus Resources (ASX:LOT) presents a compelling investment case as an emerging uranium producer with a clear path to near-term production. Under the leadership of newly appointed CEO Greg Bittar, the company is laser-focused on bringing its flagship Kayelekera project in Malawi back into production by Q3 2025.

Kayelekera benefits from significant historical investment, with an estimated US$200 million spent by previous owner Paladin Energy. The existing infrastructure provides a strong foundation for a rapid and low-capex restart. Lotus' 2022 Definitive Feasibility Study outlined an accelerated plan to get Kayelekera back into production at a rate of 2.4 million pounds per annum, with a current resource supporting a minimum seven-year mine life.

The recent A$130 million capital raise fully funds the US$50 million required to restart Kayelekera, as well as additional capital items to optimize the operation. This strong financial position also affords Lotus flexibility in negotiating future offtake agreements to maximize price realization for shareholders.

Lotus has already secured initial offtake contracts totaling 1.5 million pounds from 2026-2029 with major North American utilities. These fixed price contracts will cover a significant portion of operating costs in the early years. The company is in advanced discussions to expand this to 3 million pounds and layer in more market-linked pricing to capture the expected uranium price upside.

Kayelekera benefits from strong support from the Malawi government, which views the project as a key driver of economic growth and development. The 10-year Mine Development Agreement provides fiscal and regulatory certainty, including the critical ability to repatriate profits without additional withholding taxes.

Beyond the immediate restart plans, Lotus sees significant exploration potential to extend Kayelekera's mine life through near-mine exploration and the incorporation of satellite deposits within trucking distance. Longer-term, the Letlhakane project in Botswana provides additional growth optionality, with the stated objective of bringing it into production within the life of Kayelekera. Key Investment Highlights:
Fully funded to production: Recent AUD $130M raise covers all restart capex
Near-term timeline: Targeting first production in Q3 2025
Proven asset: Kayelekera produced 10M lbs under previous ownership
Established jurisdiction: Malawi highly supportive, 10-year agreement in place
Exploration upside: Potential to extend mine life and expand production

Lotus offers investors a unique proposition: a fully funded, fast-tracked path to uranium production in a proven jurisdiction with a highly motivated government partner. As the uranium market continues to strengthen on the back of growing nuclear power demand and supply constraints, Lotus is well positioned to be one of the earliest and highest-margin new producers in the global uranium industry.

View Lotus Resources' company profile: https://www.cruxinvestor.com/companies/lotus-resources-limited

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Interview with Dr. Arthur Halleran, President & CEO of Trillion Energy International Inc.

Our previous interview: https://www.cruxinvestor.com/posts/trillion-energy-csetcf-gas-production-growth-exploration-upside-5333

Recording date: 6th November 2024

Trillion Energy, a junior E&P company focused on Turkey, is emerging from a challenging period marked by collapsing gas production and a plunging share price. However, after implementing a technical solution to well instability, the company is now generating revenue and eyeing a path back to growth.

Trillion's key asset is the SASB gas field offshore Turkey in the Black Sea. After acquiring the aging field, Trillion drilled new wells that initially produced at high rates of 2-2.5 MMcf/d before abruptly watering out. The root cause was determined to be water loading associated with the 4.5" tubing size used in the recompletions. To solve this, Trillion has gone back to the original 2 3/8" tubing size and is using a snubbing unit to swap the velocity strings without killing the wells. The program is working - Akcakoca-3 stabilized at 2.6 MMcf/d after the workover. Two more wells are being recompleted currently.

At $9.94/mcf gas pricing in Turkey, Trillion generated over $1M/month in revenue the past three months from just two producing wells. Once the additional recompletions are finished, the company expects that to grow to $2M monthly revenue. This cashflow is key to Trillion's turnaround plans. It will allow the company to pay down some of its past-due payables, ending a period of financial distress. More importantly, the funds will be reinvested into new well work to boost production.

Trillion is aiming to exit 2025 at 10-14 MMcf/d of gas production, which would represent a revenue run-rate of around $25M/year. To get there, the company is pursuing low-cost rigless options like sidetracks of existing wellbores and barge-based drilling. A reprocessed 3D seismic survey shows additional gas prospects that could be exploited.

Management estimates the value of SASB could be $0.50-1.00/share based on the known well inventory alone. With Trillion trading under 10c, that represents substantial potential upside if the company delivers. The other arrow in Trillion's quiver is its 12% interest in the million-barrel potential west exploration blocks. Through an initial two-well program, this provides Trillion with exposure to the prolific SE Turkey basin near the Iraq border which has seen a string of recent major discoveries.

Overall, Trillion offers investors a combination of low-cost, quick-payback gas development in the Black Sea along with high-impact exploration onshore SE Turkey. The shares are underpinned by growing cashflow at SASB, limiting downside, while success at its other prospect blocks could be a gamechanger. The key risks are a still-stretched balance sheet and dependence on a single producing field with a mixed track record. But if Trillion can continue to steadily grow gas production and revenue over the coming quarters, there is ample room for the stock to re-rate higher.

View Trillion Energy's company profile: https://www.cruxinvestor.com/companies/trillion-energy

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Interview with Peter Akerley, President & CEO of Erdene Resource Development Corp.

Our previous interview: https://www.cruxinvestor.com/posts/erdene-resource-development-tsxerd-high-grade-gold-producing-in-2025-5824

Recording date: 6th November 2024

Erdene Resource Development is approaching a significant transition from developer to producer, with its Bayan Khundii gold project in southwestern Mongolia approximately 60% complete and targeting first production in mid-2025. The project represents a compelling investment opportunity, combining near-term production with substantial district-scale growth potential.

The initial operation, designed to produce 85,000 ounces of gold annually, is particularly attractive in the current gold price environment. At around $2,800/oz gold, the company projects monthly revenue of approximately $20 million, with roughly 50% converting to free cash flow. This translates to potential annual free cash flow of $130 million, enabling a two-year payback of the project's debt while funding aggressive exploration programs.

Construction progress remains on track, with the process plant building structure erected and critical infrastructure development underway, including a 240-kilometer power line being built from China. The company aims to have the plant enclosed and heated for winter within 60 days, allowing for the final installation of electrical and instrumentation components.

What sets Erdene apart is its strategic position in an emerging mining district. Recent exploration success has demonstrated significant expansion potential, with discoveries including:
Ulaan discovery: 40 meters of 7 g/t gold near the planned pit
Greater Dark Horse: Initial 50,000 ounces with extensive exploration potential
Altan Nar deposit: 500,000 ounces at 2 g/t gold
Zuun Mod copper project: Development studies starting Q1 2025

The company's five-year growth strategy envisions expanding production to potentially 200,000-250,000 ounces per year through the development of satellite deposits. This growth is supported by a strong partnership with MMC, a major Mongolian mining company, providing local operational expertise and infrastructure development support.

Financially, Erdene is well-positioned with $80 million in senior debt and operating lines offered by three commercial banks. The company does not anticipate requiring additional equity financing, with future growth funded through operational cash flow.

As CEO Peter Akerley notes: "When you have a four gram per ton head grade, you can withstand any of those concerns that you might have seen historically. We're probably in one of the best positions of any gold project globally in terms of grade and costs."

Key investment catalysts include construction completion (currently 60% complete), first gold production mid-2025, ongoing resource expansion drilling results, district exploration results, and development studies for satellite deposits.

While risks exist, including construction completion, commissioning, and country risk considerations, the combination of near-term production, robust economics at current gold prices, and significant exploration upside presents a compelling investment opportunity. The project's high grade and low operating costs provide resilience against gold price volatility, while the district-scale potential offers substantial long-term growth opportunities.

For investors seeking exposure to the gold sector, Erdene offers a unique combination of near-term cash flow and significant exploration upside in an emerging mining district, backed by strong local partnerships and infrastructure support.

View Erdene Resource Development's company profile: https://www.cruxinvestor.com/companies/erdene-resource-development

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Interview with Anthony Hamilton, CEO of Georgina Energy PLC

Our previous interview: https://www.cruxinvestor.com/posts/georgina-energy-lsegex-helium-hydrogen-play-nears-critical-drilling-milestone-6081

Recording date: 06/11/2024

Georgina Energy PLC CEO Anthony Hamilton provides a comprehensive update on the company's progress in advancing its Australian helium and hydrogen projects. Georgina Energy is poised for a transformative period as it prepares to drill its flagship Hussar and Mount Winter projects, both prospective for critically important helium and increasingly in-demand hydrogen.
Key points covered:

- Imminent drilling at Hussar following a planned late November site visit to secure final approvals, with a fully-funded 50-day program targeting sub-salt formations.
- Mount Winter moving forward steadily, with formal traditional owner approval anticipated in December, paving the way for permitting and future drilling.
- Advanced discussions with two significant gas production companies on potential farm-in agreements to jointly develop and expand Georgina Energy's helium and hydrogen portfolio.
- Ongoing scoping study at Hussar to evaluate substantial byproduct opportunities in addition to helium and hydrogen, leveraging proprietary reprocessed seismic data that demonstrates a much larger structure than originally contemplated.

Hamilton emphasises the potential for these upcoming catalysts to demonstrate the value of Georgina Energy's assets: 

"The $50 million question...is answered by drilling into the sub-salt. We'll only truly know what we've got when we drill it and we flow test it."

With an experienced management team, strong financial position, and exposure to the rapidly growing clean energy and technology markets, Georgina Energy represents a timely opportunity for investors to gain a foothold in Australia's emerging helium and hydrogen sector. As the company embarks on this pivotal operational phase, the next 12 months promise significant potential share price catalysts as drilling results are released and partnership agreements are finalized.

For more insights into the Georgina Energy story and the macro drivers underpinning the investment thesis, please watch the full interview, and visit their company profile: 

Learn more: https://www.cruxinvestor.com/companies/georgina-energy

Interview with Alex Black, Executive Chairman of Rio2 Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/rio2-tsxvrio-and-erdene-resource-development-tsxerd-nearing-gold-production-milestone-5653

Recording date: 5th November 2024

Rio2 Limited (TSXV:RIO) is on the verge of constructing its flagship Fenix Gold Project in Chile's Atacama region. The fully permitted and financed oxide gold heap leach mine is expected to pour first gold within 12 months, putting the company on a fast track to near-term cash flow and a potential re-rating.

In the interview, Rio2 CEO Alex Black laid out the investment case for the junior developer. With 5 million ounces of gold in a low-cost, run-of-mine operation, Fenix stands out as one of the most attractive advanced-stage projects in the hands of a junior. The after-tax NPV(5%) of $800 million is four times the company's current market capitalization, suggesting Rio2 is deeply undervalued. But the real blue sky lies in Fenix's expansion potential. Black sees the project ramping up from 20,000 tonnes per day to 80,000 tpd in relatively short order, which would propel annual gold production to approximately 300,000 ounces. At that scale, Rio2 would stand out as a prime takeover target.

"When we get to 300,000 ounces per annum, from one mine, we become a world-class project that somebody else is going to want," Black explained. The key hurdle is securing additional water supply, with studies already underway on desalination options.

Fenix's straightforward oxide mineralogy and no-crush, run-of-mine heap leach process make for an expedited path to production. With earthworks already underway, Black expects to be in production in the second half of 2025, far quicker than the multi-year development timetables of most peers. 

Rio2 also aspires to be a regional consolidator, assembling a portfolio of undervalued gold projects in Latin America. Black sees considerable opportunity to unlock stranded assets by applying his team's skill set in permitting, construction and community relations. Chile in particular is ripe for consolidation, with few key players and a long list of undeveloped gold projects. "I think there's a consolidation opportunity for Rio2 to consolidate projects and become something that somebody else will walk into and go 'great, we've got an entree and a big base in Chile,'" said Black.

With over US$60 million in cash and a market cap of just US$200 million, Rio2 has ample currency to transact and a compelling valuation arbitrage to exploit. As Fenix advances through construction and begins generating cash flow, the company will be well positioned to build an attractive acquisition pipeline.

The macro backdrop is also highly favorable, with gold prices hitting all-time highs and industry consolidation accelerating. Advanced-stage projects like Fenix are in high demand as producers race to replenish depleted reserves. Rio2 offers substantial leverage to a rising gold price and M&A premiums.

With a proven CEO, near-term path to production, and organic/external growth potential, Rio2 is a junior developer to watch. As Fenix de-risks further and the company executes on its strategic vision, the stock appears poised for a material re-rating. Rio2 offers a unique combination of imminent cash flow and expansive blue sky in a rapidly evolving gold bull market.

View Rio2 Limited's company profile: https://www.cruxinvestor.com/companies/rio2-limited

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