Interview with Alex Black, Executive Chairman of Rio2 Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/rio2-tsxvrio-back-on-track-with-fenix-gold-project-4745

Recording date: 7th May 2024

Rio2 Limited, a junior mining company, has made significant progress in developing its Fenix Gold project in Chile. The company recently completed a successful $22 million equity financing round, surpassing its initial $8 million goal. This funding will support the project through to construction financing, which is anticipated in September 2024.

The strong participation from existing shareholders in the financing round validates the project's potential and the company's strategy. CEO Alex Black expressed his surprise and gratitude for the overwhelming support, especially considering the challenges faced by shareholders during the previous two years due to permitting issues.

The Fenix Gold project, which boasts 5 million ounces of gold reserves, is now well-positioned to move forward. The company has already completed substantial prefabrication work, and the funds raised will be used to reactivate alliance partnerships, remobilize people and equipment, and complete the assembly of the processing plant. Rio2 also plans to rehire many of the 80 professionals previously recruited in Chile.

One of the most significant developments for the project is the support it now receives from the Chilean government. After facing permitting obstacles in the past, the Fenix Gold project is now considered a priority in the Atacama region, with the Ministry of Economy and the Ministry of Mining fully backing its development. Environmental bodies have even admitted in writing that the project was wrongfully halted before. With strong community support and the Atacama governor's endorsement, Rio2 expects to obtain the remaining permits by August 2024.

Rio2 is targeting initial gold production at Fenix by the end of 2025. The mine plan involves stockpiling lower-grade ore while processing higher-grade material on the heap leach pad during the first few years to accelerate cash flows and loan repayment. The company also sees potential for expansion in years 3-5 of production, which could further enhance the project's value.

Despite unsolicited interest from larger mining companies, Rio2 remains focused on building value and bringing the project into production, rather than seeking a quick exit.

With a strong treasury, permitting on track, and key groundwork laid, Rio2 appears to be an attractive investment opportunity for those seeking exposure to a significant new gold producer. The company's current valuation may offer an appealing entry point, considering the recent permitting challenges and overall weakness in the gold market.

As the global gold mining sector faces the ongoing challenge of depleted reserves and declining grades, advanced-stage development projects like Rio2's Fenix Gold project are becoming increasingly scarce and valuable. With a proven management team, strong government and community support, and a clear path to production, Rio2 Limited presents a compelling investment case for those bullish on gold's long-term prospects.

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

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