Rio2 stock soars 31% on Fenix gold project environmental approval in Chile

Shares in Canadian gold junior Rio2 (TSXV: RIO; US-OTC: RIOFF) rose to their highest level in a year after the company announced the successful approval of the environmental impact assessment (EIA) for its Fenix project in Chile.

Located in the Atacama region of northern Chile, Fenix represents one of the largest undeveloped gold oxide, heap leach projects in the Americas, boasting 4.75 million oz. of measured and indicated resources contained within 389.2 million tonnes grading 0.38 gram gold per tonne.

Over a 17-year mine life, Fenix is expected to produce 1.32 million oz. of gold, averaging 91,000 oz. annually over the first 12 years. As outlined in the September 2023 feasibility study, the Fenix gold project would have a US$210.3 million after-tax net present value discounted at 5%, with a 28.5% internal rate of return.

In a news release Wednesday, Rio2 said it welcomes the decision of the Chilean government’s committee of ministers to approve the EIA, which now allows the company to advance the Fenix gold project through statutory permitting, financing and the planned restart of construction activities next year.

The project is an example of modern gold mining where a full complement of technical, environmental, and social considerations have been consulted on and built into its design from the outset,Rio2 says It also represents a significant investment in Chile’s gold sector by a junior mining company, with approximately US$235 million of initial and sustaining capital.

“We have designed Fenix Gold as an example of the very best of modern mining, bringing not only significant investment and jobs to the Atacama region, but also extensive protection of the environment with a particular focus on flora and fauna in the area we will be operating,” Rio2 executive chairman Alex Black said.

The environmental approval marks a turn of fortunes for the company, which saw its EIA rejected in July 2022 by a regional evaluation commission because it contained “insufficient information” on Fenix’s negative impacts on certain wildlife species. An appeal was later made to the committee.

Shares of Rio2 soared 31.7% to 40¢ apiece by mid-afternoon on Wednesday in Toronto, having reached a 52-week high of 43¢ earlier in the session. The company’s market capitalization is $98.5 million.