The Globe and Mail reports in its Tuesday edition that Raymond James analyst Craig Stanley has lowered his recommendation for Rio2 to "market perform" from "strong buy" because of permitting uncertainties at its Fenix Gold project in Chile.
The Globe's Darcy Keith writes that Chilean Environmental Assessment Service has recommended to reject the Environmental Impact Assessment (EIA) at Fenix. It is now up to a body that includes 11 governmental institutions to decide on the project.
Mr. Stanley is now assuming Fenix will be granted EIA approval within the next two weeks. Mr. Stanley, however, delayed his expectations for first gold production to the third quarter of 2023.
He slashed his share target on Rio2 to 40 cents from $1.50. Analysts on average target the shares at $1.28. Felix is known to be the largest undeveloped gold heap leach project in the Americas with estimated gold resources of 6.4 million ounces. Rio2 is aiming to become the first run-of-mine gold heap leach mine in Chile. Even if the Fenix EIA is denied, the company can resubmit once extra information is provided, says Mr. Stanley. The construction permit was originally expected to be obtained in the third quarter of this year.
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