Rio2 Limited (TSX-V:RIO, OTCQX:RIOFF) told investors that the Chilean Internal Revenue Service has issued its wholly-owned Chilean subsidiary, Fenix Gold Limitada, a 4.2 billion Chilean peso (US$5.1 million) tax refund which will be used to advance its Fenix Gold Project.
While IVA/VAT (Impuestos a Las Ventas (NYSE:VTR) y Servicios/Value Added Tax) refunds are not usually received until after a company has achieved commercial production, the company said Fenix Gold applied for the refund of credits under a special program that allows IVA/VAT paid on expenditures that are capital in nature to be refunded at an accelerated pace.
Under the same program, the company’s other wholly-owned Chilean subsidiary, Lince SA, received an IVA/VAT refund of US$1.3 million in January 2023, it added.
“We are very pleased to have received this timely IVA/VAT refund,” Rio2 president and CEO Andrew Cox said in a statement.
“With these funds, Rio2 and Fenix Gold are now funded, at our current cash burn rate, into Q2, 2024. We recognize the tremendous efforts of our accounting staff in Chile to make this happen, as we patiently wait for our Fenix Gold administrative appeal to be heard.”
The company filed an administrative appeal before the Ministries Committee on August 31, 2022, against the Atacama Regional Evaluation Commission’s decision not to approve the Environmental Impact Assessment (EIA) for its Fenix Gold Project.
“To date, the company has not received confirmation from the Chilean authorities as to when the appeal will be heard,” Cox added.
Rio2's shares were 2.4% higher at C$0.21 in early afternoon trade.
-- updated with share price movement --
Contact the author at stephen.gunnion@proactiveinvestors.com