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• Rio2 announced two MOUs for the potential supply of desalinated water to the Fenix Gold Mine. The two studies will evaluate the potential expansion of the two companies’ desalination facilities through operating plants and constructing a pipeline from their distribution facilities.
• This would allow Fenix to move forward with its expansion plan, where annual production scales from 82Koz per year to over 300Koz. Management outlined a five-year plan for achieving this.
• Rio2 officially graduated to the TSX earlier this month.
This morning, Rio2 (RIO:TSX, RIOFF:OTC) announced that following comprehensive and exhaustive due diligence and negotiations, Fenix has signed two MOUs for studies for the potential supply of desalinated water. The MOUs are with two companies that have desalinated water distribution facilities located in the Copiapo area. The studies will evaluate the potential expansion of their desalination facilities at operating plants and constructing a pipeline and associated infrastructure from their distribution facilities in Copiapo to the Fenix Project. We are maintaining our BUY rating and C$2.40/share target price on Rio2.
This is a major step for Rio2 as this initiative would provide RIO with enough water to proceed with a potential large expansion to the current mine plan. Both water companies will be required to first complete a four-month conceptual study for the potential supply of water. At the end of the four months, RIO will analyze each submission and select the preferred provider who will develop a feasibility study to supply desalinated water. Once the feasibility study has been completed and internal approvals are secured, RIO and the selected provider will enter into exclusive negotiations for a Joint Development Agreement. Prior to this, RIO will have the sole right to include other potential miners as partners in the agreement, reducing risk and costs.
Management provided the following timeline for a potential expansion, which will allow RIO to expand production to a targeted rate of 80,000tpd for at least 300Koz of gold annually for ~10 years compared to 20,000tpd and 82Koz in the current mine plan.
• Completion of a pre-feasibility study - Q1/26
• Mineral reserve and resource update - Q4/26
• Completion of a feasibility study - H2/27
• Capex approvals and commitment for the expansion - Q1/29
• Completion of desalinated water supply works and completion of project capital works - H2/30
• Commencement of ramp-up to higher rate of production - H2/30
RIO: Desalinated Water Update Setting Up Expansion Plans
What you need to know:• Rio2 announced two MOUs for the potential supply of desalinated water to the Fenix Gold Mine. The two studies will evaluate the potential expansion of the two companies’ desalination facilities through operating plants and constructing a pipeline from their distribution facilities.
• This would allow Fenix to move forward with its expansion plan, where annual production scales from 82Koz per year to over 300Koz. Management outlined a five-year plan for achieving this.
• Rio2 officially graduated to the TSX earlier this month.
This morning, Rio2 (RIO:TSX, RIOFF:OTC) announced that following comprehensive and exhaustive due diligence and negotiations, Fenix has signed two MOUs for studies for the potential supply of desalinated water. The MOUs are with two companies that have desalinated water distribution facilities located in the Copiapo area. The studies will evaluate the potential expansion of their desalination facilities at operating plants and constructing a pipeline and associated infrastructure from their distribution facilities in Copiapo to the Fenix Project. We are maintaining our BUY rating and C$2.40/share target price on Rio2.
This is a major step for Rio2 as this initiative would provide RIO with enough water to proceed with a potential large expansion to the current mine plan. Both water companies will be required to first complete a four-month conceptual study for the potential supply of water. At the end of the four months, RIO will analyze each submission and select the preferred provider who will develop a feasibility study to supply desalinated water. Once the feasibility study has been completed and internal approvals are secured, RIO and the selected provider will enter into exclusive negotiations for a Joint Development Agreement. Prior to this, RIO will have the sole right to include other potential miners as partners in the agreement, reducing risk and costs.
Management provided the following timeline for a potential expansion, which will allow RIO to expand production to a targeted rate of 80,000tpd for at least 300Koz of gold annually for ~10 years compared to 20,000tpd and 82Koz in the current mine plan.
• Completion of a pre-feasibility study - Q1/26
• Mineral reserve and resource update - Q4/26
• Completion of a feasibility study - H2/27
• Capex approvals and commitment for the expansion - Q1/29
• Completion of desalinated water supply works and completion of project capital works - H2/30
• Commencement of ramp-up to higher rate of production - H2/30
Underlying
Rio2 Limited
Provider
Atrium Research Corporation
Atrium Research provides institutional quality issuer paid research on North American public equities using deep fundamental analysis. Our research reports are disseminated through Bloomberg, FactSet, Capital IQ, Reuters and many more, as well as through our social media and email distribution lists.
Ben Pirie
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