Rio2's Peruvian Pivot: A Strategic Copper Play for Growth

VANCOUVER, BC – December 11, 2025 – In a move that fundamentally reshapes its corporate identity, Rio2 Limited has taken a decisive step away from being a single-asset developer to becoming a diversified, cash-flowing Latin American producer. The company announced it has filed a prospectus supplement for a previously announced “bought deal” equity financing, a critical step in funding its acquisition of the Condestable copper mine in Peru. This strategic pivot into copper marks a significant moment for the company, best known for its Fenix Gold Project in Chile, and signals a new chapter of growth and operational diversification.

A Transformative Leap from Developer to Producer

For years, Rio2 has focused on advancing its Fenix Gold Project in Chile, navigating the long and capital-intensive path from exploration to development. The acquisition of a 99.1% interest in the producing Condestable mine instantly alters this narrative. By adding a revenue-generating asset, Rio2 sidesteps the precarious pre-revenue phase that challenges many junior miners, establishing a foundation of immediate and growing cash flow.

This transaction is more than just an acquisition; it's a strategic de-risking of the company's entire portfolio. The cash flow generated by Condestable is earmarked to support not only its own expansion but also the continued development and future growth of the Fenix Gold project, which is on track for its first gold production in early 2026. This self-funding model is designed to reduce reliance on dilutive equity markets for future capital needs, a key consideration for long-term shareholders.

The timing of the move into copper is particularly astute. While copper has seen significant price appreciation in 2025, the acquisition provides Rio2 with meaningful exposure to a critical metal at a moment when it still trades at historic lows relative to gold. With global electrification and the energy transition underpinning a robust long-term demand forecast for copper, Rio2 is positioning itself to capitalize on structural market tailwinds.

Decoding the C$166 Million Financing

The financial engineering behind this transformative deal reveals strong market confidence in Rio2’s vision. The company is raising capital through a “bought deal” equity financing, a mechanism where a syndicate of underwriters commits to purchasing the entire offering, thereby guaranteeing the proceeds for the company. This structure is typically reserved for companies with a compelling story and strong institutional support.

Initially slated for C$140 million, the offering was upsized to C$166 million (approximately US$120 million) due to significant investor demand. The financing involves the issuance of 74,865,000 subscription receipts at a price of C$2.22 per receipt. The oversubscription serves as a powerful endorsement of the transaction's strategic merit and the quality of the Condestable asset.

The total consideration for the mine is US$241 million, structured to minimize immediate cash outlay and shareholder dilution. It includes a US$180 million upfront payment—comprised of US$80 million in cash, US$65 million in vendor debt financing, and US$35 million in Rio2 shares—along with a deferred payment of US$37 million and the assumption of US$24 million in existing net debt. This carefully crafted structure allows Rio2 to acquire a major producing asset while preserving capital and protecting the valuation of its growing gold business.

The Crown Jewel: Inside the Condestable Copper Mine

Rio2 is not acquiring a speculative exploration play but a well-established, world-class operation. The Condestable mine, located on the Peruvian coast, boasts over 60 years of continuous production history and a reserve life of more than a decade, supported by a robust mineral reserve and a strong track record of resource replacement.

The mine currently operates an 8,400 tonnes-per-day (tpd) processing plant, producing a clean copper concentrate with forecasted annual output of approximately 27,000 tonnes of copper-equivalent. However, its future potential is even more compelling. An NI 43-101 Feasibility Study already supports a planned expansion to 10,000 tpd, with environmental permits expected in the first half of 2026. Further studies indicate potential to increase capacity to 12,000 tpd and develop a future open pit, offering significant long-term growth optionality.

Crucially, Condestable aligns perfectly with Rio2's stated commitment to responsible mining. The operation is Copper Mark certified, a prestigious designation awarded for exceptional ESG performance, making it the first medium-sized underground mine in the world to achieve this status. It has operated on 100% renewable hydroelectric power since 2021 and is a pioneer in electromobility in Peru's underground mining sector. This commitment to sustainability not only mitigates operational risk but also appeals to a growing class of ESG-focused investors.

Navigating Peru's Mining Landscape and Copper's Bull Market

The acquisition plants Rio2's flag firmly in Peru, the world's third-largest copper producer and a mature, well-regulated mining jurisdiction. While operating in any jurisdiction carries inherent risks, Condestable’s long and stable operational history, combined with its strong community relations, provides a solid platform for growth. The Peruvian government has also recently taken steps to streamline permitting processes, potentially accelerating future expansion timelines.

This move occurs against the backdrop of a surging copper market. Prices have rallied over 20% in 2025, hitting new records as supply struggles to keep pace with demand fueled by data center construction, grid modernization, and the proliferation of electric vehicles. With analysts projecting a global refined copper deficit for 2026, Rio2's entry into copper production could not be better timed.

With the successful closing of this financing and acquisition, Rio2 will emerge as a fundamentally different company. Pro forma, the combined entity is expected to generate average annual EBITDA of approximately US$330 million, transforming it into a robust, multi-asset producer with operations in two of Latin America's premier mining jurisdictions. This transaction provides the financial firepower and strategic diversification necessary to fuel its next phase of growth in both copper and gold, positioning it as a significant player in the critical minerals supply chain for years to come.