Mr. Andrew Cox reports

RIO2 PROVIDES FENIX GOLD MINE CONSTRUCTION UPDATE

Rio2 Ltd. is providing an update on construction activities at its Fenix gold mine located in the Maricunga gold belt of the Atacama region in Chile.

Overview

Preconstruction activities commenced at the Fenix gold mine in 2022 prior to the Environmental Impact Assessment (EIA) for the project being rejected by the Chilean environmental regulators. Those activities included:

• Ordering and securing of long lead items for the construction of the adsorption, desorption and gold recovery (ADR) plant and associated infrastructure;
• Fabrication of ADR plant components such as tanks and ADR plant foundation footings;
• Construction of a 565-person camp and associated mess and office facilities at the Lince infrastructure site, located 20 kilometres from the mine site;
• Water-loading facilities at the Nueva Atacama water treatment facilities located in Copiapo.

The project's EIA was subsequently approved in December, 2023, following a successful 18-month appeal process.

The company recommenced construction activities at the Fenix gold mine in October, 2024, after successfully completing a debt and equity financing for the construction of the mine announced on Oct. 29, 2024.

The projected construction capex (capital expenditure) for 2025 is estimated to be $122-million (U.S.) (excluding Chilean VAT tax which is refundable) with construction expected to be completed in November, 2025. First gold production is currently guided for January, 2026.

Plant site

Bulk earthworks at the plant site have been completed and concrete bases for the footings of the processing plant have been poured. The ADR plant will be housed within a steel framed building cladded with modular thermo-acoustic panels.

Leach pad

Earthworks have commenced on the leach pad stability platform, which forms the base of the phase 1 leach pad. The leach pad has been designed to be built in four phases over the 17-year mine life of the 20,000-tonne-per-day operations.

Pregnant leach solution (PLS) pond

Excavation earthworks for the PLS pond have commenced adjacent to the ADR plant. The PLS pond will be lined with a double HDPE geomembrane liner system and have an installed capacity of 28,000 cubic metres. As determined by water balance modelling in the 2023 Fenix Gold feasibility study, a larger major events pond is currently planned to be built in year 6 of the mine operation.

Personnel

The recruitment activities for the Fenix gold mine have focused on hiring key personnel for construction activities and future mine operation roles. Personnel numbers at the Fenix gold mine are increasing and, currently, over 531 staff and contractors work on site. At the end of Q4 2024, approximately 50 per cent of the work force were from the Atacama region, and 16 per cent of on-site personnel were women.

Safety

At the end of Q4 2024, the project achieved 161,917 person-hours worked with no lost-time injuries reported.

Grade control drilling and geophysical survey

In February, the company will commence a 12,000-metre grade control drilling program focused on the first three years of production planned from the Fenix South and Fenix North pit areas. Fenix South will be the first area drilled during the months of February, March and April, and Fenix North will be drilled in October and November. The Fenix South pit will be the principal source of ore for the first year of mine production.

From February to March the company will complete a survey of 25,000 metres of CSAMT electromagnetic lines. This survey will help the geological team identify silicified zones associated with black banded veins, which are the main gold host at the Fenix Gold deposit. The geophysical targets generated from this work will allow the company to focus its future exploration drilling campaigns with the objective to grow the mineralized resource at Fenix Gold. Resource expansion drilling is currently planned to occur once gold production has commenced at the mine.

Rio2 is also pleased to announce that Enrique Garay has recently returned to the company as senior vice-president -- geology to lead and oversee the Fenix Gold geological team in preparation for mining toward the end of 2025 and future exploration.

Mine expansion study and associated EIA

A preliminary internal study completed by the Rio2 technical team has indicated that the Fenix gold mine has the potential to be expanded from its first phase 20,000 tonnes per day ore mining rate to around 80,000 tonnes per day. Increasing the ore mining rate to this level could see gold production rise from an initial rate of approximately 100,000 ounces per annum to a target range of 250,000 to 300,000 oz per annum. To quantify and justify this potential expansion, the company has initiated a mine expansion study with a target completion date by the end of 2025. Long-term water options will be assessed for the study and the most optimal water strategy will be selected and form a base case for project economics. To put this potential expansion case on a fast track to a construction decision, Rio2 has recently initiated baseline studies for an EIA study on the project, which is anticipated to be ready for review by the environmental regulators in the Atacama region by Q4 2026. As most of the required infrastructure for the expanded project (apart from water which is expected to be provided by a third party provider) is within the existing footprint of the currently approved EIA, the company expects the EIA process to advance relatively smoothly. Updates will be provided as the expansion study and EIA progress.

Andrew Cox, president and chief executive officer, commented: "Site activities at the Fenix gold mine continue advancing to plan. We are delighted with the team we are putting together and the milestones achieved so far. We look forward to continued success as we prepare the mine for first gold production in January, 2026."

Stock option grant

The board of directors of the company has approved the grant of an aggregate of 6.31 million incentive stock options, pursuant to the company's stock option plan, to a total of 72 directors, officers and employees of the company, its Peruvian subsidiary, Rio2 S.A.C., and its Chilean subsidiaries, Fenix Gold Ltd. and Lince S.A. The options are exercisable at a price of 70 cents per share (based on a 10-per-cent premium over the closing price of 63 cents on Jan. 10, 2025) and will expire five years from the grant date. The options represent the company's annual grant of long-term incentives consistent with the company's regular yearly compensation.

Fenix gold project

The Fenix gold project is one of the largest undeveloped gold oxide, heap leach projects in the Americas, hosting a measured and indicated mineral resource (as such term is defined in National Instrument 43-101 -- Standards of Disclosure for Mineral Projects, "NI 43-101") of 4.8 million ounces of gold which the company believes will make a positive contribution to the Atacama Region and Chile. The project is an example of modern gold mining where a full complement of technical, environmental and social considerations has been consulted and designed from the outset. The project represents a significant investment in the gold mining business in Chile by a junior mining company of approximately $235-million (U.S.) of initial and sustaining capital, generating employment for at least 1,200 people during the construction phase and 550 people during the 17-year operations phase. The mine being contemplated will be a run-of-mine heap leach operation; no crushing or tailings storage facilities are required, thereby minimizing the overall impact and footprint of the project.

The scientific and technical content of this news release has been reviewed, approved and verified by Enrique Garay, MSc, PGeo/FAIG, who is a QP (qualified person) under NI 43-101. For additional information regarding the project, including key parameters, assumptions and risks associated with its development, see the independent technical report entitled "NI 43-101 Technical Report on the Feasibility Study for the Fenix Gold Project" pursuant to National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. The feasibility study is dated Oct. 16, 2023, with an effective date of Oct. 16, 2023, a copy of which document is available under Rio2's SEDAR+ profile.

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. Rio2 and its wholly owned subsidiary, Fenix Gold Ltda., are companies 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 and economics) of responsible development. Rio2 reaffirms its commitment to apply environmental standards beyond those that are mandated by regulators, seeking to protect and preserve the environment of the territories that it operates in.

We seek Safe Harbor.