Rio2's US$241M Deal for Condestable Mine Forges a New Copper Power

VANCOUVER, British Columbia – January 30, 2026 – In a strategic move that fundamentally reshapes its corporate identity, Rio2 Limited has successfully completed the acquisition of a 99.1% interest in the prolific Condestable copper mine in Peru. The deal, valued at a total of US$241 million, marks a significant pivot for the company, transforming it from a gold-focused operator into a diversified precious metals and copper producer with a strengthened foothold in Latin America.

Rio2 announced today that it had finalized the acquisition from Southern Peaks Mining L.P., concluding six months of intensive due diligence and negotiations. The Condestable mine, a long-life underground operation with over 60 years of continuous production, immediately adds a robust cash-flowing asset to Rio2’s portfolio, which was previously centered on its Fenix Gold heap leach mine in Chile.

A Strategic Pivot to Diversification

The acquisition represents the cornerstone of Rio2's ambition to become a major, multi-commodity miner in the region. By adding copper to its production profile, the company aims to de-risk its operations from the volatility of a single commodity and position itself for broader growth.

“The acquisition of the Condestable Mine is the result of six months of rigorous due diligence and negotiations with Southern Peaks,” stated Alex Black, Executive Chairman of Rio2, in the company’s official announcement. “Rio2 sees the Acquisition as a positive step for the Company in its quest to become a diversified and highly profitable Latin American miner. Southern Peaks has put the mine on a strong footing during its twelve years of ownership, and Rio2 looks forward to continuing to capitalize on this solid foundation and grow resources/reserves and production over the coming years.”

Integration of the new asset is already underway. Andrew Cox, President and CEO of Rio2, outlined a clear path forward, noting the exemplary operational history of the mine. “The integration process of Condestable with Rio2 is expected to take approximately six months as we rationalize and optimize the management team,” Cox said. He confirmed that during this period, the focus would be on maintaining operational continuity to meet the mine's target annual production of around 27,000 tonnes of copper equivalent.

The Anatomy of a US$241 Million Deal

Financing such a transformative acquisition required a sophisticated, multi-pronged financial strategy. The total transaction value of US$241 million was structured through a combination of cash, debt, and equity, designed to provide immediate funding while managing shareholder dilution.

The cornerstone of the financing was a major equity raise. On December 15, 2025, Rio2 closed a bought deal financing for aggregate gross proceeds of C$191,130,345 (approximately US$138 million). This was achieved through the sale of over 86 million subscription receipts, which have now been converted into common shares with the closing of the acquisition. The net proceeds were released from escrow and used to fund a significant portion of the US$80 million upfront cash payment to Southern Peaks, with the remainder allocated to working capital.

In addition to the equity financing, the deal includes a significant vendor debt component. Rio2 issued two promissory notes to Southern Peaks: a secured note for US$55 million and a subordinated mezzanine note for US$10 million, both carrying six-year terms. The structure also includes approximately US$35 million in Rio2 common shares issued to the vendor, a US$37 million deferred payment due between 2027 and 2030, and the assumption of US$24 million of Condestable's existing debt.

While the acquisition has closed, some administrative steps remain. The deal is still subject to final approval from the Toronto Stock Exchange (TSX). Furthermore, a majority of the cash consideration and the issuance of share consideration are being held pending the receipt of a Peruvian tax certificate, a procedural complexity common in large-scale international transactions.

Condestable: A Proven Asset with Untapped Potential

For Rio2, the appeal of Condestable lies not just in its immediate production but in its established history and significant future potential. Described by management as having an “exemplary operational record,” the mine currently operates a processing plant with a throughput capacity of 8,400 tonnes per day (tpd). It produces a clean copper concentrate that also contains gold and silver credits, making it a valuable, penalty-free product.

The mine is also a leader in sustainable practices. It is Copper Mark certified, an assurance framework for responsible production, and runs on 100% renewable electricity from hydroelectric sources. This strong environmental, social, and governance (ESG) profile, built over a decade of community engagement by Southern Peaks, provides Rio2 with a strong social license to operate in the region.

Beyond its current state, Rio2 is acquiring an asset with a clear path for growth. An environmental permit is already in place to support an expansion of copper concentrate production, which is planned for the first half of 2026. More ambitious plans are also in motion. A proposal to increase mine production to 10,000 tpd was submitted to Peruvian regulators in mid-2025, with approval anticipated as early as August 2026. Rio2 has signaled its intention to study a further increase to a target rate of 12,000 tpd.

The geological potential is equally compelling. The Condestable deposit remains open for expansion both along strike and at depth, and the vast 45,000-hectare land package associated with the mine is considered largely underexplored, offering long-term exploration upside.

Market Reception and The Road Ahead

Market reaction to the large-scale acquisition has been measured. While Rio2's stock saw some volatility following the initial deal announcement in December, the broader analyst community appears to view the strategic pivot favorably. The consensus rating for the company stands as a “Moderate Buy,” with some analysts, including those at underwriter Raymond James, maintaining a “Buy” rating and a price target of C$5.00, suggesting confidence in the long-term value creation of the deal.

With the financing secured and the keys to Condestable in hand, Rio2's leadership is now focused on execution. The six-month integration plan will be critical to realizing the expected synergies and maintaining the mine's impressive operational momentum. Navigating the final regulatory approvals in both Canada and Peru will be a key priority in the coming weeks.

By successfully acquiring a high-quality, cash-flowing copper asset in a premier mining jurisdiction, Rio2 has boldly remade itself. The company has not just bought a mine; it has acquired a new strategic direction, betting that a diversified portfolio is the key to building a resilient and highly profitable Latin American mining champion.