US$135m To Help Bring Chile Mine To Production
Rio2 Limited (TSXV: RIO) has arranged mine construction financing totaling approximately US$125 to US$135 million to finance the construction of a mine at its 100%-owned Fenix Gold Project in Chile.
The Mine Financing Package is comprised of the following components:
- Non-binding term sheet with Wheaton Precious Metals International Ltd for a US$50 million Gold Purchase Agreement;
- BNP Paribas appointed as mandated lead arranger for a senior project debt facility of US$50-60 million;
- Marketed public offering of common shares of the company for gross proceeds of approximately C$25 million, at a price per share to be determined in the context of the market with a syndicate of underwriters co-led by Scotiabank, CIBC Capital Markets and Raymond James; and
- Non-Brokered private placement of common shares of the company to WPMI or an affiliate for proceeds of US$5 million at a price per share equal to, and concurrent with, the Offering.
President, CEO and a director, Alex Black, said securing this Mine Financing Package is a significant milestone event for Rio2 and a testament to the management team and the strong, long-life, project fundamentals offered by the Fenix Gold Project.
“The Mine Financing Package will allow for Rio2 to commence pre-construction activities at the Fenix Gold Project prior to receiving Environmental Impact Assessment (EIA) approval and permits for its planned 20,000 tonnes per day, run of mine, dump leach operations,” he said.
“Since the outset, the primary focus of Rio2 has been to accelerate the Fenix Gold Project to production and the Mine Financing Package will allow the Company to maintain its current schedule for first gold production in Q4, 2022.
“We welcome WPMI and BNP as our partners in the construction and development of the Fenix Gold Mine, in an environmentally and socially responsible manner, to the benefit of all stakeholders. The Fenix Gold Project hosts the largest undeveloped gold heap leach project in the Americas with a large measured and indicated gold resource of five million ounces with exciting exploration potential, and is open to further mine optimisation opportunities.”
Randy Smallwood, President and CEO of Wheaton, said they are excited to partner with Rio2 in developing the Fenix Gold Project.
“The strength of the Fenix Gold Project and its long-term potential has been readily evident during our due diligence,” he said.
WPMI GOLD STREAM
Rio2 has signed a non-binding term sheet to receive total cash consideration of US$50 million pursuant to a Gold Purchase Agreement to be entered into with WPMI, a wholly-owned subsidiary of Wheaton Precious Metals Corp. The proceeds from the Gold Stream will be used to partially finance the Mine construction.
Upon entering into the Gold Stream, WPMI will purchase refined gold equal to 6.0% of the gold production until 90,000 ounces of gold have been delivered and 4.0% of the gold production until 140,000 ounces of gold have been delivered, after which the stream will reduce to 3.5% of the gold production for the life of mine. Under the proposed Gold Stream, WPMI will pay total cash consideration of US$50 million, US$25 million of which is payable upon closing, subject to conditions including the completion of the Offering, with the remaining US$25 million payable subject to certain conditions, including the receipt of the EIA approval for the Mine. In addition, WPMI will make ongoing payments for gold ounces delivered equal to 18% of the spot gold price until the value of gold delivered less the production payment is equal to the upfront consideration of US$50 million, at which point the production payment will increase to 22% of the spot gold price.
For further information please visit: https://www.rio2.com/
