Rio2 Limited (TSX-V:RIO, OTCQX:RIOFF) said it has received a US$25 million deposit payment from Wheaton Precious Metals International Ltd. (WPMI) in connection with the two companies’ gold stream purchase agreement on Rio2's Fenix Gold Project in Chile.
The gold stream is a component of the previously announced US$125 million-US$135 million financing package to fully fund the Fenix Gold Project to production.
Under the agreement, WPMI will purchase 6.0% of the gold production until 90,000 ounces (oz) of gold have been delivered, thereafter dropping to 4.0% of the gold production until 140,000oz have been delivered, after which the gold stream will reduce to 3.5% of the gold production for the life of mine from the Fenix Gold Project.
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In addition, WPMI will make ongoing production payments for gold ounces delivered equal to 18% of the spot gold price until the value of gold delivered to WPMI, less the production payments, is equal to the total upfront consideration payable by WPMI under the gold stream of US$50 million, at which point the production payment will increase to 22% of the spot gold price.
A second deposit of US$25 million will be paid to Rio2 following the receipt of the environmental impact assessment (EIA) approval for the Fenix Gold Project.
Rio2 is a mining company with a focus on development and mining operations with a team that has proven technical skills, as well as a successful capital markets track record. Rio2 is focused on taking its Fenix Gold Project in Chile to production in the shortest possible timeframe based on a staged development strategy.
In addition to the Fenix Gold Project in development in Chile, Rio2 continues to pursue additional strategic acquisitions where it can deploy its operational excellence and responsible mining practices to build a multi-asset, multi-jurisdiction, precious metals company.
Contact the author at jon.hopkins@proactiveinvestors.com