Rio2 begins construction of Fenix gold mine in Chile

Staff Writer | February 7, 2025 | 8:41 am News Latin America Gold

The Fenix gold project, previously known as Cerro Maricunga project, is located in Copiapo province, Chile. Credit: Rio2

Rio2 (TSXV: RIO) announced on Friday it has kicked off construction at the Fenix gold mine in Chile, having successfully completed its permitting four months ago and secured funding for the project.

Located along the Maricunga gold belt in the Atacama region, Fenix represents one of the largest undeveloped gold oxide, heap leach projects in the Americas, hosting an NI 43-101 measured and indicated resource of nearly 4.8 million ounces.

According to a feasibility study completed in 2023, the Fenix gold mine is expected to produce 1.3 million oz. of gold over a 17-year life (or 81,900 oz. annually). Its after-tax net present value is calculated at $210.3 million (using a 5% discount rate), and its internal rate of return is 28.5%.

The construction capex is projected at around $122 million, to be supported by the fundings announced late October. These include a $50 million pre-paid gold deposit from Wheaton Precious Metals, a C$63 million ($44m) public offering and a C$5 million ($3.5m) private placement with Wheaton.

In an Oct. 21 press release, Rio2 executive chairman Alex Black said the financing puts the company “in a position of certainty” to fund Fenix to production, adding that the financing package is the result of a competitive and comprehensive process to secure the optimal financing solution for the gold mine.

At the time, the company had already spent $29 million on preconstruction activities.

Including the sustaining capital, the Fenix project would require a total investment of $325 million. As part of its arrangement with Wheaton, Rio2 is also due to receive a second $50 million tranche later this year, and has access to a $20 million standby loan.

Randy Smallwood, CEO of Wheaton, said Fenix is “a highly attractive, scalable gold project” located in a well-known mining jurisdiction. It is in close proximity to Kinross Gold’s La Coipa and Maricunga mines and Hochschild’s Volcan gold project.

Rio2 anticipates that Fenix mine construction will be completed November 2025, followed by first gold production in January 2026.