Rio2, a Canadian gold junior listed on the TSXV under the symbol RIO, experienced a notable uptick, reaching its highest point in over a year following the announcement of successful environmental impact assessment (EIA) approval for its Fenix project in Chile.
In a press release issued on Wednesday, Rio2 expressed appreciation for the decision by the committee of ministers in Chile to greenlight the EIA. This approval signifies a pivotal milestone, enabling the company to progress with statutory permitting, financing endeavors, and scheduled resumption of construction activities slated for 2024 concerning the Fenix gold project.
The green signal on the environmental front marks a significant turnaround for Rio2. The company faced a setback in July 2022 when a regional evaluation commission rejected its EIA, citing “insufficient information” regarding the project’s adverse effects on specific wildlife species. Subsequently, an appeal was made to the committee, leading to this recent positive outcome.
Situated in the Atacama region in northern Chile, the Fenix project stands as one of the largest undeveloped gold oxide, heap leach projects in the Americas. Rio2 highlighted its considerable resources, citing 4.75 million oz. of measured and indicated resources contained within 389.2 million tonnes grading 0.38 g/t gold.
The company emphasized the project’s adherence to contemporary gold mining practices, incorporating thorough consideration of technical, environmental, and social factors right from its inception. Additionally, Rio2 underscored the substantial investment in Chile’s gold sector by a junior mining firm, estimating an initial and sustaining capital of approximately $235 million.
Alex Black, Rio2’s executive chairman, underscored the project’s commitment to setting a benchmark in modern mining, stating, “Fenix Gold exemplifies top-tier modern mining, contributing not only significant investment and job opportunities to the Atacama region but also comprehensive environmental protection, particularly focusing on local flora and fauna.”
With an anticipated project lifespan of 17 years, Fenix is projected to yield 1.32 million oz. of gold, averaging 91,000 oz. annually over the initial 12 years. As detailed in the September 2023 feasibility study, the project forecasts a $210.3 million after-tax net present value at a 5% discount rate, accompanied by a robust 28.5% internal rate of return.
Following this announcement, Rio2 shares surged by 31.7% to C$0.40 each by 2:15 p.m. ET on Wednesday, marking a new 52-week high of C$0.43 earlier in the session. The company’s market capitalization stands at C$102.4 million, reflecting the upbeat investor sentiment surrounding the development of the Fenix gold project.
