Rio2 starts Fenix gold mine build in Chile

Rio2 (TSXV: RIO; US-OTC: RIOFF) announced on Friday it has kicked off construction at the Fenix gold mine in Chile, having successfully completed its permitting four months ago and subsequently secured funding for the project.

Located along the Maricunga gold belt in the Atacama region, Fenix represents one of the largest undeveloped gold oxide, heap leach projects in the Americas, hosting almost 4.8 million measured and indicated ounces.

Fenix is expected to produce 1.3 million oz. of gold over a 17-year life (or 81,900 oz. annually), according to a feasibility study completed in 2023. Its after-tax net present value is calculated at US$210.3 million (using a 5% discount rate), and its internal rate of return is 28.5%.

The construction capex is projected at around US$122 million, to be supported by financings announced in late October. These include a US$50 million pre-paid gold deposit from Wheaton Precious Metals (TSX: WPM; NYSE: WPM; LSE: WPM), a US$63 million public offering and a US$5 million private placement with Wheaton.

The financings puts the company “in a position of certainty” to fund Fenix to production, Rio2 executive chairman Alex Black said in an Oct. 21 press release, adding that the financing package is the result of a competitive and comprehensive process to secure the optimal financing solution for the gold mine.

At the time, the company had already spent US$29 million on preconstruction activities.

Including the sustaining capital, the Fenix project would require a total investment of US$325 million. As part of its arrangement with Wheaton, Rio2 is also due to receive a second US$50 million tranche later this year, and has access to a US$20 million standby loan.

Randy Smallwood, CEO of Wheaton, previously noted that Fenix is “a highly attractive, scalable gold project” located in a well-known mining jurisdiction. It is in close proximity to Kinross Gold’s (TSX: K; NYSE: KGC) La Coipa and Maricunga mines and Hochschild’s Volcan gold project.

Rio2 anticipates that the Fenix mine construction will be completed November 2025, followed by first gold production in January 2026.