Interview with Andrew Cox, President & CEO, and Alex Black, Executive Chairman, of Rio2 Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/erdene-rio2-tsxerd-tsxvrio-two-gold-juniors-battle-market-skepticism-on-path-to-production-6552

Recording date: 20th March 2025

Rio2 Limited is making significant progress on its Phoenix Gold Project in Chile's Atacama Desert, one of the few substantial new gold production developments in an industry dominated by mergers rather than new supply. With 5 million ounces of measured and indicated gold resources, the project is fully funded and on track for first gold pour in January 2026.

Located at elevations approaching 5,000 meters, construction officially began in October 2024 after pre-construction activities were initiated in 2022 with early financing from Wheaton Precious Metals. Currently, approximately 1,130 workers are on site, approaching the expected construction peak of 1,200 workers.

The project features favorable economics with a relatively low capital expenditure of approximately $120 million for 2025. Its simple open-pit mining operation benefits from low strip ratios (0.85:1 initially, 1.2:1 in expansion phase) and minimal pre-stripping requirements, as mineralization outcrops at surface across extinct volcanic peaks.

Initial production will target 1.7 million ounces of the total 5 million ounce resource, with output expected to reach around 70,000 ounces in 2026, ramping up to 100,000 ounces annually by 2027. The company is already planning an expansion to triple production to approximately 300,000 ounces per year.

Current challenges include managing winter construction timelines and water logistics. Initially, Phoenix Gold will operate using trucked water from Copiapó, while evaluating three desalination plant options for the longer term. The company is working collaboratively with Kinross to develop a shared water solution.

After previously facing regulatory delays when a new government came to power in Chile, Rio2 has successfully navigated these hurdles and received its environmental approval with additional monitoring conditions.

Management views the current market valuation (approximately $250 million USD) as substantially undervaluing the project given its scale and near-term production status. They draw comparisons to other recent producers that have grown to multi-billion dollar valuations once reaching production.

The project's remote location minimizes typical environmental and community impact concerns, with no nearby population centers, no surface water to be affected, and limited flora and fauna. Executive Chair Alex Black emphasizes the project's simplicity: "We're confident, I mean this is simple... it's all about simplicity here and it's an earthmoving exercise."

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

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