Obtains Surface Rights For Project Construction And Operation
Rio2 Limited (TSXV: RIO) has achieved another milestone towards the development of its Fenix Gold Project located in Chile by being granted provisional easement rights to surface lands owned by the Government.
The easement rights cover 843 hectares of land that are required for the construction and operation of the Fenix Gold Mine as defined in the Pre-Feasibility Study.
This constitutes an important milestone for the Fenix Gold Project, and Rio2’s 100% owned Chilean subsidiary, Fenix Gold Limitada, as it now has unencumbered access to the surface land for all its mine installations and infrastructure which is a key element of the permitting process for the construction and operation of the Project.
Current guidance for the timing of development of the Fenix Gold project is for pre-construction and lead equipment orders to commence in Q2, 2021 and first gold production is targeted for H2, 2022.
The granting of the surface rights follows close on the heels of the company engaging Scotiabank to act as the fompany’s financial advisor in evaluating financing options to fund the development of the Fenix Gold Project.
The PFS contemplates mining ore at a rate of 20,000 tonnes per day. To maximize cash-flow, high-grade ore will be placed on the leach pad during the initial 13 years of production and low-grade ore will be stockpiled for leaching in the subsequent 3 years of production giving a total mine life of 16 years.
Average annual gold production during the first 13 years will be 93,000 oz and 50,000 oz during the final 3 years of production as stockpiled ore is being crushed and leached. Total life of mine gold production is estimated to be 1.37 million oz with an AISC estimated at $997/oz.
The Project demonstrates strong returns with an after-tax NPV5% of $121 million and an after-tax IRR of 27.4% using the base case gold price of $1,300 per oz or an after-tax NPV5% of $481.2 million and IRR of 73.7% at $1,900 per oz gold.