Mr. Andrew Cox reports

RIO2 COMPLETES ACQUISITION OF THE CONDESTABLE MINE

Rio2 Ltd. has successfully acquired a 99.1-per-cent interest in the Condestable mine located in Peru. Rio2 acquired the Condestable mine from Southern Peaks Mining LP.

Alex Black, executive chairman of Rio2, stated: "The acquisition of the Condestable mine is the result of six months of rigorous due diligence and negotiations with Southern Peaks. Rio2 sees the acquisition as a positive step for the company in its quest to become a diversified and highly profitable Latin American miner. Southern Peaks has put the mine on a strong footing during its 12 years of ownership, and Rio2 looks forward to continuing to capitalize on this solid foundation and grow resources/reserves and production over the coming years."

Andrew Cox, president and chief executive officer of Rio2, stated: "The operational record of the Condestable mine over the past 12 years has been exemplary. The integration process of Condestable with Rio2 is expected to take approximately six months as we rationalize and optimize the management team. During that time, it will be business as usual as we work to achieve the target annual production currently set at around 27,000 tonnes of copper equivalent."

Acquisition of the Condestable mine

Rio2 completed the acquisition pursuant to the terms and conditions of a definitive share purchase agreement dated Dec. 8, 2025, as amended (the SPA), entered into among Rio2, Southern Peaks, Rio2 Cobre SAC, a wholly owned subsidiary of Rio2, and Adolfo Vera (together with Southern Peaks, the vendors). Under the terms of the SPA, Rio2 acquired all of the issued and outstanding shares of certain subsidiaries of Southern Peaks, including Ariana Management Corp. SAC, which ultimately holds a 99.1-per-cent interest in Condestable.

For additional information on the acquisition as well as the Condestable mine, please refer to the company's news release dated Dec. 8, 2025, filed under its profile on SEDAR+. The acquisition remains subject to final approval of the Toronto Stock Exchange.

In connection with the closing of the acquisition, the parties agreed to amend the SPA as follows: (i) Rio2 agreed to waive the delivery of a Peruvian tax certificate as a condition to closing; (ii) the majority of the cash consideration due on closing was financed into escrow and will be released to the vendors upon the receipt of the Peruvian tax certificate; and (iii) the share consideration will be issued by Rio2 to Southern Peaks following the receipt of the Peruvian tax certificate.

Conversion of subscription receipts

As part of the financing package to finance the acquisition, Rio2 closed a bought deal financing of 86,094,750 subscription receipts at a issue price of $2.22 per subscription receipt on Dec. 15, 2025, for aggregate gross proceeds of $191,130,345, underwritten by Raymond James Ltd., Stifel Nicolaus Canada Inc. and BMO Capital Markets.

The escrow release conditions for the conversion of the subscription receipts have been fulfilled and each subscription receipt was converted into one common share of Rio2 concurrently with closing of the acquisition. The net proceeds of the equity financing, together with all interest earned thereon, were released from escrow to Rio2 and were partly used to address the cash consideration for the acquisition. The remainder of the proceeds will be used for working capital and general corporate purposes. Holders of subscription receipts are not required to take any action in order to receive the underlying subscription receipt shares and the subscription receipts are expected to be delisted from trading on the TSX as of the close of business on Jan. 30, 2026.

Vendor debt

As part of the closing mechanics for the acquisition, Rio2 delivered (i) a secured promissory note in the amount of $55-million (U.S.), and (ii) a subordinated mezzanine promissory note in the amount of $10-million (U.S.), to Southern Peaks, both with six-year terms.

Advisers

Edgehill Advisory Ltd. acted as financial adviser to Rio2, and McMillan LLP, Dentons (Peru) and Appleby (Cayman) acted as legal counsel for the acquisition. DLA Piper (Canada) LLP acted as legal counsel for the equity financing.

BMO Capital Markets acted as financial adviser to Southern Peaks, and Stikeman Elliott LLP, Echecopar, and Maples and Calder acted as legal counsel.

About Rio2 Ltd.

Rio2 is a diversified precious metals and copper producer focused on building and operating mines with a management team that has proven technical skills as well as a successful capital markets record. The company is currently producing gold at its Fenix gold heap leach mine in Chile and copper/gold/silver at its recently acquired Condestable underground mine in Peru. Rio2 and its wholly owned subsidiaries, Fenix Gold Ltd. and Compania Minera Condestable S.A., are companies that operate with the highest environmental standards and responsibility with the firm conviction that it is possible to develop mining projects that respect the three pillars (social, environment, economics) of responsible development. As related companies, the company reaffirms its commitment to apply environmental standards beyond those mandated by regulators, seeking to protect and preserve the environment in the territories where the company operates.

We seek Safe Harbor.