Canadian-listed copper and gold producer Rio2 Limited has reported US$50 million (A$77 million) in adjusted EBITDA for the September quarter on revenue of US$115.4 million (A$177 million), with its Peruvian Condestable copper mine carrying the result while snowstorms disrupted its Fenix Gold operation in Chile.
Condestable delivered steady production after the underground operation mined more than 700,000 tonnes of ore grading 0.72 per cent copper, 0.23 grams per tonne (g/t) gold and 5.27 g/t silver. It produced 9.6 million pounds of copper, 3,807 ounces of gold and 93,854 ounces of silver, providing a valuable financial backbone for the company’s expanding operations.
The result demonstrates the value of Rio2's dual-asset strategy in South America, with the two mines responding differently to the quarter's conditions.
Fenix Gold had a tougher assignment after two major snowstorms in July and August, followed by further snowfall and high winds in September, dumped up to five metres of snow across parts of the high-altitude project. The severe conditions disrupted mining and processing and slowed the production ramp-up achieved in the previous quarter. Despite the setback, Fenix produced 8,500 ounces of gold and stacked just over one million tonnes of ore onto its heap-leach pad, where gold is extracted by passing a chemical solution through crushed ore. Rio2 said its site crew kept the leach pad and adsorption-desorption-recovery plant operating.
Rio2 president and chief executive officer Andrew Cox said: "Q3 was a challenging quarter at Fenix Gold. Two major storm events associated with the El Niño weather pattern in July and August significantly disrupted operations, while continued snowfall and high winds affected production into September."
The company still expects Fenix to ramp up to its planned 20,000-tonnes-per-day target in the fourth quarter, and has forecast conditional monthly gold production of 4,000 ounces in October, 6,000 in November and 7,000 in December, assuming minimal further disruption.
The company says the quarter also saw a renewed focus on exploration. The first phase of a 33,870-metre surface drilling program is set to follow up on district-scale mapping at Condestable, while drilling at Fenix, suspended during the adverse weather, is scheduled to resume in January 2027 and will incorporate results from the 43 holes already completed, totalling 14,669 metres. Rio2 is also planning a drill campaign in early 2027 at its Kalzas tungsten project in Canada's Yukon.
Rio2 ended September with a cash balance of US$26.8 million (A$38.9 million), and enters a pivotal stretch in 2027 as it looks to turn its emerging copper-gold operation into a second consistent cash producer.
Analysis
Why This Matters
- The quarter shows how a diversified asset base can absorb operational shocks, with Peruvian copper revenue cushioning the impact of severe weather at the Chilean gold mine.
- Fenix Gold's ramp-up to 20,000 tonnes per day and its monthly production targets will determine whether Rio2 can deliver on its promise of a second consistent cash-generating operation.
- The exploration push at Condestable, Fenix and the Yukon tungsten project signals the company is building a pipeline beyond its current producing mines.
Background
Rio2 is a Canadian-listed copper and gold producer with operations in South America and a tungsten project in Canada's Yukon. During the September quarter, its underground Condestable mine in Peru delivered steady output while its high-altitude Fenix Gold mine in Chile was hit by snowstorms linked to the El Niño weather pattern, slowing the ramp-up that had been achieved in the prior quarter.
What to Watch
- Whether Fenix Gold reaches its planned 20,000-tonnes-per-day processing rate in the fourth quarter.
- Monthly gold production figures for October, November and December against Rio2's conditional forecasts of 4,000, 6,000 and 7,000 ounces.
- The resumption of drilling at Fenix in January 2027 and the planned early-2027 drill campaign at Kalzas in the Yukon.
Checked
12 claims in this story checked against 1 source: 11 supported.
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- SupportedPeruvian Condestable copper led Rio2’s US$50 million adjusted-EBITDA quarter while snow disrupted its Chilean Fenix Gold operation.Sydney Morning Herald - Latest News: “Leading the charge was its Peruvian Condestable copper mine ... Meanwhile, the company’s Fenix Gold mine in Chile faced a tougher assignment after two major snowstorms”
- Partly supportedCondestable offset the weather disruption at Fenix Gold.Sydney Morning Herald - Latest News: “Condestable mine in Peru (pictured) provided steady production and cash flow during a challenging quarter for the company’s Fenix Gold mine in Chile.”
- SupportedRio2 reported US$50 million (A$77 million) in adjusted EBITDA and US$115.4 million (A$177 million) in September-quarter revenue.Sydney Morning Herald - Latest News: “banking US$115.4 million (A$177 million) in revenue and US$50 million (A$77 million) in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the September quarter.”
- SupportedCondestable mined more than 700,000 tonnes of ore grading 0.72 per cent copper, 0.23 g/t gold and 5.27 g/t silver.Sydney Morning Herald - Latest News: “after mining more than 700,000 tonnes of ore grading 0.72 per cent copper, 0.23 grams per tonne (g/t) gold and 5.27g/t silver.”
- SupportedCondestable produced 9.6 million pounds of copper, 3,807 ounces of gold and 93,854 ounces of silver.Sydney Morning Herald - Latest News: “The underground operation produced 9.6 million pounds of copper, alongside 3807 ounces of gold and 93,854 ounces of silver”
- SupportedSnowstorms and subsequent snowfall and high winds disrupted Fenix, with up to five metres of snow across parts of the project.Sydney Morning Herald - Latest News: “two major snowstorms in July and August - followed by further snowfall and high winds in September - dumped up to five metres of snow across parts of the project.”
- SupportedAndrew Cox said: “Q3 was a challenging quarter at Fenix Gold. Two major storm events associated with the El Niño weather pattern in July and August significantly disrupted operations, while continued snowfall and high winds affected production into September.”Sydney Morning Herald - Latest News: “Rio2 Limited president and chief executive officer Andrew Cox said: “Q3 was a challenging quarter at Fenix Gold. Two major storm events associated with the El Niño weather pattern in July and August significantly disrupted operations, while continued snowfall and high winds affected production into September.””
- SupportedFenix produced 8,500 ounces of gold and stacked just over one million tonnes of ore onto its heap-leach pad.Sydney Morning Herald - Latest News: “Fenix managed to produce 8500 ounces of gold and stack just over one million tonnes of ore onto its heap-leach pad”
- SupportedRio2 still expects Fenix to reach its planned 20,000-tonnes-per-day target in the fourth quarter.Sydney Morning Herald - Latest News: “still expects Fenix Gold to ramp up to the planned 20,000-tonnes-per-day target in the fourth quarter.”
- SupportedRio2 forecast conditional Fenix production of 4,000 ounces in October, 6,000 in November and 7,000 in December, assuming minimal further disruption.Sydney Morning Herald - Latest News: “The company has forecast conditional monthly gold production of 4000 ounces in October, 6000 in November and 7000 in December as a possible path through the final quarter, assuming minimal further disruption.”
- SupportedFenix drilling is scheduled to resume in January 2027 and incorporate results from 43 completed holes totalling 14,669 metres.Sydney Morning Herald - Latest News: “it is scheduled to resume in January 2027 to take advantage of the summer conditions. The program will incorporate results from the 43 holes already completed, totalling 14,669m.”
- SupportedRio2 ended September with US$26.8 million (A$38.9 million) in cash.Sydney Morning Herald - Latest News: “backed by a healthy US$26.8 million (A$38.9 million) cash balance at the end of September.”
