RIO: First Gold at Fenix; Increasing Target Price
What you need to know:• Rio2 announced that first gold pour at its 100% owned Fenix Gold mine was achieved on January 23.
• The project was completed on time and on budget, demonstrating strong execution by the Rio2 team.
• Efforts are now focused on ramping up Fenix to 20Ktpd, and the Company is targeting 60-70Koz Au in 2026.
• First production is a key derisking event for the flagship asset, which is anticipated to generate significant cashflow, with further growth from ongoing studies for the Phase 2 expansion.
Yesterday, Rio2 (RIO:TSX, RIOFF:OTC) announced that first gold pour at its Fenix Gold Mine was achieved on January 23. Construction was completed on time and on budget, with the first official pour producing ~897 ounces of gold. This is in addition to ~358 ounces produced during commissioning in December. Between the two pours, the Company has also produced ~131 ounces of silver. RIO is now focused on ramping up operations to a targeted 20Ktpd through the remainder of 2026 and has guided for 60-70Koz of gold this year. We are maintaining our BUY rating and increasing our target price to C$5.50/share (prev. C$4.00/share) on Rio2.
First gold marks a key milestone for Rio2’s flagship asset following a relatively short 14-month construction period, and the Company plans to provide further operational guidance as Fenix ramps up throughout the year. In addition, RIO continues to progress work on the Phase 2 expansion at Fenix, which will be the next leg of growth for the operation beyond Phase 1’s ~100Kozpa production profile.
Rio2 is in the process of exploring its interests in resource properties and has not yet determined whether these properties contain reserves that are economically recoverable. The recoverability of amounts shown for resource properties and related deferred costs is dependent upon the existence of economically recoverable reserves, confirmation of Co.'s interest in the underlying claims, the ability of Co. to obtain necessary financing to complete the development, and upon future profitable production or proceeds from the disposition thereof.
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