Rio2 Expands in Latin America With the Acquisition of the Producing Condestable Mine

On December 8, 2025, Rio2 announced a transformational acquisition of a 99.1% interest in the producing Condestable copper-gold mine in Peru from Southern Peaks Mining L.P. The transaction has an enterprise value of US$241 million.

The consideration consists of: - US$80 million in cash upfront. - US$35 million in Rio2 shares (21.9 million shares). - US$65 million in vendor debt. - US$37 million in deferred cash or share payments scheduled between 2027 and 2030. - Assumption of US$24 million in net debt.

To fund the acquisition, Rio2 has arranged a concurrent C$140 million bought deal equity financing of subscription receipts at C$2.22 per receipt, and an additional C$14 million private placement at the same price.

The acquisition repositions Rio2 from a single-asset gold developer in Chile to a diversified Latin American producer with immediate cash flow and copper exposure. Pro-forma annual production is forecast to be approximately 180,000 gold equivalent ounces. Condestable is projected to generate an average annual EBITDA of US$110 million to US$145 million.

The release also updated that construction of the Fenix Gold Project in Chile is 80% complete, with the first gold pour still on track for January 2026.

This news is a game-changer for Rio2, fundamentally altering its business model, risk profile, and investment thesis. The company is leveraging its rising valuation from de-risking the Fenix project to acquire a cash-flowing asset, a classic move to bridge the gap from developer to producer.

Positive Impacts: - Immediate Cash Flow: The acquisition provides immediate revenue and projected EBITDA of over US$110 million annually, which can be used to service debt and fund growth, significantly de-risking the company's reliance on capital markets. - Diversification: The deal diversifies Rio2 across jurisdictions (Chile and Peru) and commodities (gold and copper), reducing its single-asset and single-commodity risk profile. - Producer Re-rating: Transitioning to producer status typically commands a higher valuation multiple compared to a developer. This deal accelerates that transition by over a year. - Scale: The combined entity will be a more significant mid-tier producer, attracting a broader institutional investor base.

Negative Impacts & Risks: - Significant Shareholder Dilution: The financing and share issuance for the deal will create approximately 91.3 million new shares on a pre-deal base of ~430 million, representing over 21% dilution. The financing at C$2.22 is an 8.6% discount to the prior day's close of C$2.43, which will likely re-price the stock lower in the short term. - Increased Debt Load: The transaction adds a substantial amount of debt, including US$65M in vendor notes, US$24M in assumed debt, and US$37M in deferred payments. This elevates financial risk, making the company more sensitive to operational stumbles or commodity price weakness. - Execution and Integration Risk: Rio2's management must now simultaneously oversee the final, critical stages of construction and ramp-up at Fenix Gold in Chile while integrating and operating a new mine in Peru. This is a massive increase in operational complexity. - Jurisdictional Risk: While Chile is a stable mining jurisdiction, Peru has experienced periods of political instability and community opposition to mining projects. This adds a layer of geopolitical risk that did not previously exist.

Historical Context: Historically, Rio2's news has been entirely focused on advancing its Fenix Gold Project. The timeline shows consistent progress: construction began in late 2024, was 19% complete by March 2025, 41% by July, 63% by October, and now 80%. This disciplined execution built market confidence and supported the share price rally throughout 2025. The Wheaton stream financing provided the capital. This acquisition represents a major strategic pivot from that single-minded focus. While it addresses the single-asset risk inherent in the previous strategy, it introduces a host of new financial and operational risks.

Rio2 Limited is transitioning from a precious metals development company to a diversified mining producer. Its flagship asset has been the 100%-owned Fenix Gold Project, located in the Atacama Region of Chile. Fenix is one of the largest undeveloped gold oxide heap leach projects in the Americas, with construction well advanced and first gold expected in January 2026. With the announced transaction, the company is adding the producing Condestable copper-gold mine in Peru, which will become a co-flagship asset providing immediate cash flow.