Rio2 Limited’s (“company”, “Rio2”) updated Preliminary Feasibility Study (“PFS”) on its 100% owned Fenix Gold project in Chile, which used a US$1,300 per oz gold price, showed an After Tax Net Present Value (“AT-NPV”) at 5% of US$121 million, with an After Tax Internal Rate of Return (“AT-IRR”) of 27%, based on a 20,000 tpd operation. The initial CAPEX was estimated at US$111 million.
We believe the PFS clearly demonstrated Fenix’s scalable development options. A previous PFS (completed in 2014) had evaluated a larger-scale 80,000 tpd operation, with an initial CAPEX estimate of US$399 million.
The latest PFS also showed potential for fast-tracking production; the timeline for construction has been reduced from five to two years. Management’s current development timeline is to commence construction by Q4 2021, and have first gold production by Q4 2022.
Management, board members, and institutions own 30% of the outstanding shares.
In August 2019, the company raised $25 million by issuing 62.50 million units at $0.40 per unit.