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Rio2 Ltd (2)
Symbol RIO
Shares Issued 254,236,483
Close 2021-11-16 C$ 0.69
Recent Sedar Documents

Rio2 signs $50-million (U.S.) gold stream deal on Fenix

2021-11-16 10:20 ET - News Release

Mr. Jose Martinez reports

RIO2 ANNOUNCES SIGNING OF US$50 MILLION GOLD STREAM WITH WHEATON PRECIOUS METALS ON THE FENIX GOLD PROJECT

Rio2 Ltd. has entered into a definitive precious metals purchase agreement with Wheaton Precious Metals International Ltd., a wholly owned subsidiary of Wheaton Precious Metals Corp., in relation to the company's Fenix gold project in Chile.

The gold stream is one of the components of the mine construction financing totalling approximately $125-million (U.S.) to $135-million (U.S.) to finance the construction of a mine at the company's 100-per-cent-owned Fenix gold project in Chile. The signing of the gold stream agreement follows the successful completion in August, 2021, of the company's $35.1-million equity offering and positions the company to finalize the previously announced $50-million (U.S.) to $60-million (U.S.) senior debt project finance facility with BNP Paribas mandated as sole lead arranger.

Jose Luis Martinez, executive vice-president, chief strategy officer, stated, "Entering into this definitive agreement with Wheaton International represents a significant milestone for Rio2 and secures the foundation of the mine financing package setting the company on a solid path for development and a fast track to production."

Under the gold stream, Wheaton International will purchase 6 per cent of the gold production from the Fenix gold project until 90,000 ounces of gold have been delivered and 4 per cent of the gold production until 140,000 ounces of gold have been delivered, after which the stream will reduce to 3.5 per cent of the gold production for the life of mine. Wheaton International will make an upfront deposit in cash of $50-million (U.S.) with $25-million (U.S.) available following closing of the gold stream agreement, and the remaining $25-million (U.S.) payable after the receipt of the EIA approval for the mine with both payments subject to completion of customary conditions.

In addition, Wheaton International will make continuing payments for gold ounces delivered equal to 18 per cent of the spot gold price until the value of gold delivered less the production payment is equal to the upfront consideration of $50-million (U.S.), at which point the production payment will increase to 22 per cent of the spot gold price.

Advisers

Scotiabank acted as financial adviser and McMillan LLP acted as legal adviser to Rio2 in connection with the gold stream.

About Rio2 Ltd.

Rio2 is a mining company with a focus on development and mining operations, with a team that has proven technical skills as well as a successful capital markets record. Rio2 is focused on taking its Fenix gold project in Chile to production in the shortest possible time frame based on a staged development strategy. In addition to the Fenix gold project in development in Chile, Rio2 continues to pursue additional strategic acquisitions where it can deploy its operational excellence and responsible mining practices to build a multiasset, multijurisdiction precious metals company.

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