Brought to you by BULLS Nโ BEARS
Penny Taylor
Rio2 Limited has rebounded from a savage Chilean winter at its Fenix Gold mine, where a string of severe snowstorms put the brakes on its first-year production ramp-up. Despite the weather hampering progress through July and August, the company has kept its processing infrastructure ticking over and says Fenix Gold remains on track to hit commercial production during the fourth quarter.
Heavy snow and high winds shut down mining from July 17 to 24 and again from August 10 to 22. Three significant single-day snowfalls followed. Rio2 attributes the extraordinary season to what it calls a super El Niรฑo affecting weather patterns in Chile and Peru.
Rio2 says it safely evacuated personnel during the storms. The leach pad, process plant and power generators remained intact and operating at reduced capacity, helping preserve the site for a return to mining. With the worst of the weather now seemingly behind it, management is implementing initiatives to claw back lost production.
Rio2 is forecasting conditional monthly gold production of 4000 ounces in October, 6000 in November and 7000 in December as a possible path through the final quarter, assuming minimal further disruption.
The storms also forced the temporary suspension of the exploration drilling program at Fenix Gold. So far, Rio2 says itโs completed 43 holes for 14,669m of a planned 21,880m program, with plans to resume the remaining drilling in January 2027, during Chileโs summer.
The completed holes were designed to test deeper mineralisation up to 100m beneath the reserve pit and within the wider resource pit shell. To date, 60 per cent of samples taken have been assayed, with the balance expected within two months. Once all assays are received, the company plans to release the results, then drill further at depth and along the existing resource in the new year, with the findings feeding a revised geological model and an updated resource estimate, slated for Christmas next year.
The Fenix Gold operation is a 100 per cent-owned, high-altitude mine sitting 4500m above sea level in Chileโs prolific Maricunga gold belt, around 160km from Copiapรณ. Its low-grade oxide deposit hosts a measured and indicated resource of 389 million tonnes grading 0.38 grams per tonne (g/t) gold for 4.8 million ounces.
Its production model is based on a simple run-of-mine heap-leach process, where mined ore is placed directly onto lined pads without a conventional crushing circuit. This makes continuous ore movement central to its success, highlighting the impact of storm-related mining pauses.
Rio2โs 2023 feasibility plan envisaged daily placement rising from 12,000 tonnes in year one to 20,000 tonnes at full base-case capacity, eventually delivering average recovered gold of 91,000 ounces a year over a 12-year mine life.
Fortunately, Rio2 is no one-trick pony, with its producing Condestable underground mine in Peru packing 36.5 million tonnes of reserves grading 0.73 per cent copper, alongside gold and silver credits. The operation is forecast to churn out 18,000 tonnes of contained copper, 12,900 ounces of gold and 304,800 ounces of silver annually at its current 8400-tonne-per-day rate, with a 14-year mine life stretching to 2039.
The race is now on for Rio2 at Fenix Gold to outrun the Andean winter and reach commercial production. With core infrastructure safe and a plan to claw back lost ounces, the final quarter of the year will likely be a test of operational grit against the elements.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
From our partners
About the Author
