Rio2 Limited press release

Rio2 Reports Q2 2026 Financial and Operating Results and Webinar

2026-08-13

TSX - Toronto Stock Exchange · Gold · Copper · Canada · Corporate Finance

VANCOUVER, British Columbia, Aug. 13, 2026 (GLOBE NEWSWIRE) -- Rio2 Limited (“Rio2” or “the Company”) (TSX: RIO; OTCQX: RIOFF; BVL: RIO) reports financial results for the three months ended June 30, 2026, including operational updates for the Fenix Gold Mine (“Fenix Gold”) and the Condestable Copper Mine (“Condestable”). Rio2’s consolidated production for the quarter totaled 13,539 ounces of gold, 75,437 ounces of silver, and 9,296,883 pounds of copper. All financial information in this press release is reported in U.S. dollars unless otherwise indicated.

Andrew Cox, President and Chief Executive Officer of Rio2, stated: “Q2 2026 was the second quarter of ramp-up for Rio2 at Fenix Gold, supported by steady production and cash flows from Condestable. At Fenix Gold, operational performance continued to improve during the quarter with more work areas opened, more people employed and the arrival of the principal mining contractor’s mining equipment, all of which we anticipate will make a meaningful impact to productivities and costs during Q3. As expected, production numbers improved over Q1 and the mine plan has been adjusted to recover production that was not previously achieved. Unusually cold temperatures and snowfall in Q2 presented challenges for the onsite team, but it was a good lead-in to the coming winter months.At Condestable, operations continued to deliver to plan. The integration process continues to advance well and is expected to be complete in early Q4.”

Alex Black, Executive Chairman of Rio2, stated: “Peru and Chile are currently in the midst of one of the strongest El Niños ever recorded. This weather event began to impact gold production at the Fenix Gold mine late in Q2 with significant localized snowstorms accompanied by extremely low temperatures, which continued into July and August. Our priority during these storms has been the safety of our people. Mining operations were halted when necessary, and we are evaluating the impact of these events to gold production and the ramp-up. The operations team at Fenix Gold is doing a great job handling the weather challenges, maintaining pad leaching, continuing operation of the processing plant, and systematically addressing key ramp-up constraints. Condestable, on the other hand, is not experiencing the same weather impacts due to its close proximity to the coast and its low-altitude location.”

Operational and financial results for the Condestable Mine in this press release are presented for the period of January 30, 2026 (acquisition date) to June 30, 2026.

SECOND QUARTER 2026 HIGHLIGHTS

Fenix Gold ramp-up is progressing well with key start-up constraints identified and being addressed, improved production numbers from mining an expanding work area, reduction of staff turnover, and the introduction of the larger-capacity mining fleet nearing completion. Rio2 is on track to achieve commercial production in Q4 2026. Condestable continued to perform to expectations, providing solid free cash flows from copper, gold and silver production. Evaluations of both grade enhancement through ore sorting and an expansion of the plant to 10ktpd are ongoing. Rio2 continues to expect to receive approval for the modifications to the mine EIA during Q3 to expand operations. Earnings before interest, tax, depreciation and amortization (“EBITDA”)1of $76.2 million for the three months ended June 30, 2026. Adjusted EBITDA1of $46.5 million for the three months ended June 30, 2026. Income from mine operations of $39.2 million and adjusted net income1of $17.1 million, compared to income from mine operations of $0 and adjusted net loss1of $0.9 million for the three months ended June 30, 2025. Maintained a strong liquidity position at June 30, 2026 with cash and cash equivalents of $49.7 million, compared to cash and cash equivalents of $46.4 million as at December 31, 2025. Quarterly consolidated gold production of 13,539 ounces and gold sales of 11,071 ounces at an average realized price of $4,268/oz. Q2 2026 total cash costs of $2,701 per ounce of gold sold1at the Fenix Gold Mine. Fenix Gold Mine produced 9,088 ounces of gold during the quarter. Quarterly copper production of 9,296,883 pounds and copper sales of 9,295,502 pounds at an average realized price of $5.94 per pound. Q2 2026 total cash costs of $2.34 per pound of copper produced1and AISC1of $3.10 per pound of copper produced at Condestable. The 9,296,883 pounds of copper produced was entirely at Condestable. Condestable also produced 4,451 ounces of gold and 74,374 ounces of silver. Cash provided by operating activities in the quarter was $0.3 million, cash used in investing activities was $12.4 million, and net cash used in financing activities was $31.0 million, compared to cash flow used in operating activities in the comparative quarter ended June 30, 2025 of $6.2 million, cash used in investing activities of $29.3 million, and net cash provided from financing activities of $0.2 million.

(1) These are non-IFRS Measures. See Non-IFRS Measures section of this press release for definitions and discussion.

OPERATIONS

Fenix Gold Mine

Mine Production - The Fenix Gold Mine continued through ramp-up during Q2 2026. While planned tonnes improved for the quarter, grade was below plan, as expected, due to a delay in tonnes from Q1 and limited ability to selectively mine high-grade material. Meaningful progress was made during Q2 in addressing the previously identified factors impacting the ramp-up:

Expanding Fenix South – The space constraints in Fenix South were resolved with sufficient area for three mining fleets to operate during Q2. Mining access has also been established at Fenix Central and a preliminary break-in bench has been prepared, which will enable more flexibility for mining operations during the second half of the year.

Operator availability – The challenges experienced in Q1 employing truck drivers have been resolved, retention bonuses and roster changes were implemented, and the rotation of staff is now controlled.

Truck fleet transition – The mining fleet transition was completed in June with the 35t rental trucks being replaced by 42t trucks owned by our principal mining contractor STRACON, who is responsible for the maintenance of the trucks. Improvements to both costs and availability are expected going forward.

Lower tonnes moved reduced ore availability, resulting in lower grade ore being sent to the pad and a lower than planned head grade at the plant. Management made the decision not to engage in high-grade mining until planned production rates can be achieved. Mining of higher-grade material (greater than 0.4g/t) is expected to resume during H2 2026, at which time lower grade material will be sent to the stockpile. To further increase mine production flexibility, management has also decided to bring forward the commencement of mining at Fenix Central. Access and break-in work for Fenix Central was completed in Q2 and mining is currently planned to commence in Q3.

The processing plant performance during Q2 was an improvement on Q1, with the plant processing an average of 16,300 m3/day of leach solution during June versus an average of 10,700 m3/day during March, with no serious mechanical stoppages for failures.

On the leach pad, freezing temperatures in May impacted leaching on parts of the pad and brought forward a trial of various drip line covers. As a result of these trials, the leach pad covers were adjusted to a double layer black cover which generated a temperature difference of approximately 12 degrees Celsius between the ambient temperature and temperature in the pad. Going forward, the entire pad will be covered with these double layer black covers to minimize pad freezing.

Water transport ramp-up to the mine from Copiapó continued successfully during Q2 with trucking consistently delivering over 1,000 m3 per day, with a one day record of 1,800 m3, during a trial of trucking over three shifts. Trucking had to be suspended on two occasions during the quarter as the water storage capacity at the processing plant was full. The water consumption per tonne of ore is less than previously estimated (approximately 75% of design) due to ore from Fenix South having a higher moisture content than anticipated. The mine has not been water constrained and at the end of June the mine water storage was full for a total on-site water inventory of 45,000 m3. Significant water flow input to the pregnant leach solution (“PLS”) pond from the leach pad was observed following a one-day snow event in June. Water capture from snow during winter months is a welcome bonus to the water needs of the mine.

Blasting fragmentation of mineralized material is working well for the volcanic breccias. Blasting and fragmentation of harder andesitic and dacitic dome mineralized material, currently approximately 30% of ore being mined, has been generating a higher amount of oversize material. STRACON and our blasting contractor (Orica) are working on improving blast design to improve fragmentation.

The ramp-up in Q2 for ore mining saw an increase from 13,600 tonnes per day in April to 16,100 tonnes per day in June. The mine is expected to achieve 20,000 tonnes per day of ore production during Q3.

Rio2 previously guided gold production at Fenix Gold for 2026 to be 60,000 – 65,000 gold ounces. Due to the unpredictability and severity of the recent extreme weather events and the ongoing production ramp-up during H2 2026, Rio2 has decided to defer guidance for the remainder of the year. Despite leaching continuing at the leach pad and the processing plant continuing to operate, approximately 265,000 tonnes of ore mining was deferred due to the cessation of mining due to heavy snow events, which in turn led to the deferral of approximately 5,000 ounces of gold production. While this does not impact the Q2 results, it is a factor in the forecasting of annual guidance, as the impacts on gold production will likely be felt in August.

Based on current ramp-up progress, Rio2 anticipates achieving commercial production at Fenix Gold in Q4 2026.

Key performance data for the Fenix Gold Mine is summarized as follows:

| | | Three months ended June 30, | Six months ended June 30, | | | | | | 2026 | 2025(2) | 2026 | 2025(2) | | Total tonnes mined | tonne | 2,567,710 | N/A | 3,777,794 | N/A | | Ore mined | tonne | 1,633,680 | N/A | 2,441,270 | N/A | | Ore stacked in pad | tonne | 1,300,620 | N/A | 1,957,731 | N/A | | Head Grade (g/t Au) | g/t | 0.462 | N/A | 0.459 | N/A | | Contained ounces in pad | oz | 19,325 | N/A | 28,879 | N/A | | Gold ounces produced | oz | 9,088 | N/A | 13,736 | N/A | | Gold ounces sold | oz | 6,814 | N/A | 10,748 | N/A | | Cash cost per gold ounce sold (1) | $/oz | 2,701 | N/A | 2,671 | N/A | | All-in sustaining cost per gold ounce sold (1) | $/oz | 2,873 | N/A | 2,837 | N/A | | All-in cost per gold ounce sold (1) | $/oz | 3,392 | N/A | 3,246 | N/A | | Silver ounces produced | oz | 1,063 | N/A | 1,590 | N/A | | Silver ounces sold | oz | 860 | N/A | 1,374 | N/A | | Average realized price per gold ounce (1) | $/oz | 4,163 | N/A | 4,378 | N/A | | Average realized price per silver ounce (1) | $/oz | 70 | N/A | 75 | N/A |

(1) See Non-IFRS Measures section of this press release for definitions and discussion. (2) This information was not available (“N/A”) for Q1 2025 or not applicable as the Company’s only asset was the Fenix Gold Mine and it did not have production or sales during Q1 2025.

At June 30, 2026, 3,343 gold ounces remained in doré inventory and were not sold before period end. As a result, reported cash cost, all-in sustaining cost (AISC) and all-in cost (AIC) per gold ounce sold were higher than they otherwise would have been. For illustrative purposes only, if these gold ounces had been sold during the period, management estimates that cash costs, AISC and AIC would have been approximately $20/oz, $76/oz and $247/oz lower, respectively. This estimate does not represent actual results. See the section titled “NON-IFRS MEASURES AND DEFINITIONS” for more information.

Human Resources– A total of 1,670 personnel (including contractors) are currently employed at Fenix Gold in mine operations, construction and exploration. 96% of the workforce is comprised of Chileans, with 36% from the Atacama Region, and 11% are female.

Health & Safety– A total of 765,715 person-hours were worked in Q2, with one LTI occurring for an LTIFR of 0.28. The LTI for Q2 was a trip and fall accident in the camp kitchen storeroom, causing injury to a worker’s right forearm.

Exploration– Exploration drilling has resumed at Fenix Gold for the first time since 2014, marking a key milestone in advancing the project’s geological understanding and long-term development strategy. The 2026 program comprises 23,190 m of drilling (9,250 m RC and 13,940 m DD), supported by a $9.5 million budget. As of the end of Q2, execution stands at 50%, with completion expected by late August and the mineral resource/reserve update on track for year-end.

The program is designed to upgrade resource classification from Inferred to Measured and Indicated and to expand mineral resources below the reserve pit and up to 100 m beneath the current resource shell. Drill rigs were mobilized in March, enabling continuous operations throughout Q2.

Fuel Hedging– As a consequence of the Iran War, diesel prices in Chile during Q1 2026 have increased by up to 60%. As the transition from construction to full operations at Fenix Gold progresses, diesel consumption for the mining fleet and infrastructure will remain an important operating expense. In early March 2026, Rio2 secured a portfolio of 9 commodity call options (hedges) used to lock in prices to protect against the risk of rising fuel costs at the mine. These hedge contracts span a nine-month period from April through December 2026, covering a total volume of 1,575,000 gallons. The protected monthly volume scales up over time, starting at 150,000 gallons in the spring, increasing to 175,000 in the summer, and peaking at 200,000 gallons per month through the end of the year. The upfront premium paid to secure these nine positions was $622,000.

For the three months ended June 30, 2026, the Company received $257,000 in cash on realized gains for the contracts matured in April and May and had $51,000 in cash receivable for the contract matured in June 2026. As of the June 30, 2026 valuation date, the combined market value of the open contracts was $284,000, recognized as a commodity derivative asset on the consolidated balance sheet. As of the July 31, 2026 valuation date, the combined market value of the open contracts was $759,000.

Mine Expansion Study– Work on desalinated water alternatives continues with three potential providers selected to provide initial estimates for capital and operating costs, and timelines for connecting Fenix Gold to desalinated water from Copiapó. Results from these providers are now expected to be formally delivered towards the end of Q3. The selection of one of these providers to supply desalinated water to Fenix Gold will support completion of the prefeasibility study for the expansion case to increase the production rate to 80,000 tonnes per day. Due to additional time required by the three potential providers to estimate cost and timing, the completion of the study is now expected in Q4 2026. In anticipation of this study, the Fenix Gold permitting team have started work on the baseline study for the expanded mine site EIA, which includes expansion to the existing pits at Fenix North, Central and South to form one combined pit, the expansion of the adsorption, desorption and recovery plant (“ADR plant”), piped water supply, the expanded leach pad footprint, the expanded waste dump footprint, additional water ponds, grid power connection, a truck shop for a large equipment fleet, and other support infrastructure.

Construction Activities – In 2025, Rio2 expended the critical capital necessary to bring Fenix Gold into gold production to begin generating cash flow. For 2026, the plan is to complete the deferred capital expenditures required for the mine to enter 2027 at a consistent production rate of 20,000 tonnes per day of ore to pad. During Q2 2026, deferred capital expenditures included leach pad construction for ongoing operations and completing construction activities around the ADR plant.

The remaining capital planned to be expended in 2026, which will be funded out of cash reserves and cashflow, is summarized as follows:

| | TOTAL | | | USD | | Construction | 24,175,000 | | Access Roads | 490,000 | | ADR Plant | 7,741,000 | | Leach Pad Construction | 6,577,000 | | Lime Plant | 134,000 | | Power Generation | 2,845,000 | | Electric Power distribution | 86,000 | | Communications infrastructure | 137,000 | | Onsite laboratory | 3,332,000 | | Truck Workshop | 2,515,000 | | Early Works | 237,000 | | Fuel Station | 70,000 | | PLS Pond | 11,000 | | Sustaining Construction | 2,687,000 | | Preliminary Works | 414,000 | | Camp Infrastructure | 707,000 | | Leach Pad Expansion | 1,496,000 | | Engineering | 70,000 | | Total USD | 26,862,000 |

Condestable Mine

Mine Production - Condestable delivered solid operating performance in Q2 2026, processing over 700,000 tonnes of ore at average grades of 0.66% copper, 0.24 g/t gold and 3.88 g/t silver. Copper grades were below planned grades due to higher internal dilution in certain stopes, particularly in June; however, this was partly compensated for by higher gold production from higher-grade material.

Unit production costs were $39.5/t, 1% above budget, driven by high-volume haulage fleet constraints; higher fuel and supplier costs offset by more favourable exchange rates than planned.

Overall processing plant performance remained strong in Q2. Copper recoveries continued marginally below expectations due to the mining of higher oxide material at shallower depths near the base of oxidation, while gold and silver recoveries were materially better than budgeted. Mining operations will migrate to deeper levels over the next two quarters as truck haulage efficiencies are improved in the mine. Condestable produced 9,296,883 pounds of copper, 4,451 ounces of gold and 74,374 ounces of silver during Q2 2026, contained in concentrate.

Production guidance for 2026 (February to December) is 21,500 – 23,500 tonnes of payable copper equivalent.

Key performance data for the Condestable Mine is summarized as follows:

| | | Three months ended June 30, | Six months ended June 30, | | | | | | 2026 | 2025(2) | 2026 | 2025(2) | | Exploration drilling | m | 1,059 | N/A | 1,600 | N/A | | Production drilling | m | 10,290 | N/A | 16,980 | N/A | | Deepening works | M | 672 | N/A | 1,328 | N/A | | Ore mined | tonne | 726,511 | N/A | 1,212,699 | N/A | | Ore treated | tonne | 725,970 | N/A | 1,200,311 | N/A | | Cu headgrade | % | 0.66 | N/A | 0.68 | N/A | | Au headgrade | g/t | 0.24 | N/A | 0.24 | N/A | | Ag headgrade | g/t | 3.88 | N/A | 3.96 | N/A | | Cu recovery rate | % | 88.05 | N/A | 88.66 | N/A | | Au recovery rate | % | 79.70 | N/A | 80.59 | N/A | | Ag recovery rate | % | 82.23 | N/A | 82.63 | N/A | | Copper produced | lb | 9,296,883 | N/A | 15,700,071 | N/A | | Gold produced | oz | 4,451 | N/A | 7,652 | N/A | | Silver produced | oz | 74,374 | N/A | 123,045 | N/A | | Copper sold | lb | 9,295,502 | N/A | 15,499,815 | N/A | | Gold sold | oz | 4,258 | N/A | 6,977 | N/A | | Silver sold | oz | 72,746 | N/A | 119,334 | N/A | | Cash cost per copper pound produced (1) | $/lb | 2.34 | N/A | 2.20 | N/A | | All-in sustaining cost (AISC) per copper pound (1) | $/lb | 3.10 | N/A | 2.99 | N/A | | All-in cost per copper pound (1) | $/lb | 3.64 | N/A | 3.48 | N/A | | Average realized price per copper pound (1) | $/lb | 5.94 | N/A | 5.84 | N/A | | Average realized price per gold ounce (1) | $/oz | 4,455 | N/A | 4,564 | N/A | | Average realized price per silver ounce (1) | $/oz | 69 | N/A | 72 | N/A |

(1) See Non-IFRS Measures section of this press release for definitions and discussion. (2) This information was not available (“N/A”) for Q1 2025 or not applicable as the Company’s only asset was the Fenix Gold Mine and it did not have production or sales during Q1 2025.