Rio2 beefs up Peru copper mine with big resource upgrade
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Andrew Todd
Just months after signing the deal for the Condestable copper-gold mine in Peru, Rio2 Limited has tabled a significant resource and economic upgrade that will extend its mine life and strengthen its economy.
The updated technical report confirmed a 14-year mine life extended to 2039 and assigned a strong after-tax net present value to the project at US$710 million (A$1.03 billion). The underground operation is estimated to generate a whopping US$1.15bn (AU$1.66bn) in after-tax free cash flow over its life.
The project’s updated resource estimate for the combination of the Raúl and Condestable zones now stands at a whopping 82.1 million tonnes in the measured and indicated category, grading 0.69 per cent copper, 0.13 grams per tonne (g/t) gold and 4.12 g/t silver. The extractable metal content moves to 565,000 tonnes of copper, 355,000 ounces of gold and 10.87 million ounces of silver.
True blue skies, however, may be hiding in the inferred category, which has seen a significant increase to 22.2 million tonnes in a higher grade of 0.76 per cent copper, 0.09 g/t gold and 2.78 g/t silver.
‘To complement Rio2’s growth strategy, the company will work to expand production at Condetable.’
Andrew Cox, chairman and chief executive of Rio2 Ltd
The operation is expected to produce an annual average of 18,000 tons of concentrated copper, as well as 12,900 ounces of gold and 304,800 ounces of silver.
The company’s manufacturing profile is supported by an impressively low-cost structure; all sustainability costs over mine life are projected at just US$1.46 ($2.11) per pound of copper; This is well below the price of white hot copper, which is more than US$6 ($8.7) per pound of the red metal.
Andrew Cox, chairman and chief executive of Rio2 Limited, said: “To complement Rio2’s growth strategy, the company will work to expand production at Condetable. The company expects to receive approval for an amendment to the mine’s EIA that will allow for an increase in production in the third quarter of this year..”
Condestable is located in Peru’s productive coastal iron-oxide-copper-gold (IOCG) belt; The geological area is also home to the giant Mina Justa copper mine, which consistently yields between 120,000 and 130,000 tonnes of copper per year.
Rio2 says it is pursuing an aggressive growth research program with future growth in mind. A massive 46,480m diamond drilling campaign designed to both replenish mined reserves and expand the resource base is underway, with more than 17,200m of this program already completed.
The company said it is also assessing the potential for near-surface open-pit mining and is carrying out a district-scale mapping and geophysical program on its 46,000-hectare land package to establish new expansion targets.
Rio2 only completed its acquisition of Condetable at the end of January, and this rapid and significant improvement to the mine’s resources, reserves and operating life has underlined the significant potential of the asset.
With gold flowing from the Fenix project in Chile and copper exploration continuing in Peru, the company is preparing for a new period of growth.
With a major exploration program in motion and production expansion on the cards, Rio2 appears to be executing a multi-asset growth strategy with impressive speed and cost-saving efficiency in South America.
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