Rio2 Limited (TSX-V:RIO, OTCQX:RIOFF) said it has closed a C$35 million financing to help fund development of its flagship Fenix gold project in Chile.
The offering consisted of 44,275,000 shares priced at C$0.65 each, including 5,775,000 shares issued as part of an overallotment option, for aggregate gross proceeds of C$28,778,750.
In addition, Rio2 issued 9,792,880 shares to Wheaton Precious Metals Corp (LSE:WPM, TSX:WPM, NYSE:WPM) for gross proceeds of C$6,365,372 to make up total gross proceeds of C$35,144,122.
WATCH: Rio2 CEO talks through project financing to construct a mine at its Fenix Gold Project in Chile
Scotiabank (TSX:BNS), CIBC Capital Markets and Raymond James (NYSE:RJF), as joint bookrunners and co-lead underwriters, along with Cantor Fitzgerald Canada Corporation, Sprott Capital Partners LP, and Cormark Securities Inc. acted as the underwriters for the public offering.
Vancouver-based Rio2 said that at least US$20 million will be used to fund development at Fenix, particularly for the mine and camp infrastructure. A portion of the funds will also be used for working capital purposes, the company told investors.
Rio2 is focused on taking its Fenix Gold Project in Chile to production in the shortest possible timeframe based on a staged development strategy.
The project currently holds 5 million ounces of gold in the measured and indicated category, with proven and probable reserves of 1.8 million ounces and inferred resources of 1.4 million ounces.
Fenix is located approximately 20 kilometres south of Kinross Gold’s La Coipa gold-silver mine, 60 kilomeres north of Kinross’s Maricunga Gold Mine and 40 kilometres north of Hochschild’s Volcan Gold Project.
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