News out this morning
Rio2 hires Scotiabank to find financing for Fenix
2020-10-21 09:21 ET - News Release
Mr. Alex Black reports
RIO2 ENGAGES FINANCIAL ADVISOR FOR FENIX GOLD PROJECT CONSTRUCTION FINANCING
Rio2 Ltd. has taken another key step toward the development of its Fenix gold project located in Chile by engaging Scotiabank to act as the company's financial adviser in evaluating financing options to finance the development of the Fenix gold project.
In preparation for construction, Rio2 is currently completing detailed engineering for the project based on a Pre-Feasibility Study ("PFS") completed by the Company in August 2019. The PFS contemplates mining ore at a rate of 20,000 tonnes per day. To maximize cash-flow, high-grade ore will be placed on the leach pad during the initial 13 years of production and low-grade ore will be stockpiled for leaching in the subsequent 3 years of production giving a total mine life of 16 years. Average annual gold production during the first 13 years will be 93,000 oz and 50,000 oz during the final 3 years of production as stockpiled ore is being crushed and leached. Total life of mine gold production is estimated to be 1.37 million oz with an AISC estimated at $997/oz. The Project demonstrates strong returns with an after-tax NPV5% of $121 million and an after-tax IRR of 27.4% using the base case gold price of $1,300 per oz or an after-tax NPV5% of $481.2 million and IRR of 73.7% at $1,900 per oz gold.
Jose Luis Martinez, Executive Vice President and Chief Strategy Officer, stated, "We are executing on our financing strategy and engaging Scotiabank to evaluate various traditional and alternative financing products and structures. Over the next few months, we will continue working towards successfully securing a financing package that will move our Fenix Gold Project into the construction phase in Q2, 2021".
For additional information regarding the Fenix Gold Project, including key parameters, assumptions and risks associated with its development, see the independent technical report (referred to above as the PFS) entitled "Updated Pre-Feasibility Study for the Fenix Gold Project, Atacama, III Region, Chile" dated October 15, 2019 with an effective date of August 15, 2019, a copy of which document is available under Rio2's SEDAR profile at www.sedar.com .
For readers to fully understand the information in this news release they should read the PFS in its entirety, including all qualifications, assumptions, exclusions and risks that relate to the PFS. The PFS is intended to be read as a whole and sections should not be read or relied upon out of context.
Enrique Garay, MSc. P. Geo (AIG Member), Senior Vice President Geology of Rio2 Limited, who is a QP under National Instrument 43-101 has reviewed, approved and verified the scientific and technical content of this news release.
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 shortest possible timeframe based on a staged development strategy. In addition to the Fenix Gold Project in development in Chile, Rio2 Limited continues to pursue additional strategic acquisitions where it can deploy its operational excellence and responsible mining practices to build a multi-asset, multi-jurisdiction, precious metals company focused in the Americas.
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