Updated Pre-Feasibility Study For The Fenix Gold Project
VANCOUVER, BC - Rio2 Limited reported the results of the updated mineral resource estimate (MRE) and Pre-Feasibility Study (PFS) for its 100% owned Fenix Gold Project located in the Maricunga Mineral Belt of the Atacama Region, Chile. This updated PFS is the Company’s base case to accelerate development and start production in the shortest possible time.
The updated MRE for the Project is 5.0 million oz of gold in the measured and indicated category and 1.4 million oz of gold in the inferred category constrained within a $1,500 gold price pit shell. The mineral resource remains open at depth and along strike.
This PFS is strategically focused on an optimally configured mine plan which will facilitate the shortest possible timeline to construction/production, a lower initial capex, higher grades initially being mined, and a lower initial strip ratio as compared with the 2014 PFS. The PFS focuses on a low-cost heap leach gold mine with 1.83 million ounces (oz) of gold reserves that will produce 1.37 million oz of gold.
The PFS contemplates mining ore at a rate of 20,000 tonnes per day (tpd) with water for the project being trucked from Copiapo. This compares with the ore mining rate of the 2014 PFS which was a constant 80,000 tpd with water for the project being piped from Copiapo. To maximize cash-flow, high-grade ore will be placed on the leach pad during the initial 13 years of production and low-grade ore will be stockpiled for leaching in the subsequent 3 years of production giving a total mine life of 16 years. Average annual gold production during the first 13 years will be 93,000 oz and 50,000 oz during the final 3 years of production as stockpiled ore is being crushed and leached.
With a large mineralized resource and potential for resources to grow through further drilling, there remains considerable opportunity to increase annual production and extend the mine life of the Fenix Gold Project. Timing to increase production will depend on transporting a greater volume of water via a pipeline, alternative water solutions closer to the project and changes to the gold price during the initial years of production.
Alex Black, President & CEO said, “Our highly skilled and experienced management team has taken great strides since the acquisition of the Fenix Gold Project just over 12 months ago. We have completely re-imagined and re-engineered the project with a focus on shortening the timeline to construction/production, simplifying the approval process and permitting of the project, lowering initial capex, concentrating on higher grades during early years of production and optimally minimizing the initial strip ratio. We also thought outside of the box to arrive at an innovative solution of trucking water to the project with the sole purpose of fast-tracking and simplifying the approvals process and permitting of the project. Together with our highly experienced environmental and permitting consultants in Chile, Minería y Medio Ambiente Limitada (MyMA), we have now set an achievable timetable to construction in Q4 2021. With a large mineralized resource base and a modest project production rate, as indicated in this PFS, we are confident we can expand the mine quickly and optimally after achieving initial production. Once the Fenix Gold Project achieves commercial production it will be the only gold oxide heap leach gold mine in operation in Chile and achieving a unique milestone.”