Rio2 Reports Q2 2026 Financial and Operating Results and Webinar
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”)1 of $76.2 million for the three months ended June 30, 2026. Adjusted EBITDA1 of $46.5 million for the three months ended June 30, 2026.
- Income from mine operations of $39.2 million and adjusted net income1 of $17.1 million, compared to income from mine operations of $0 and adjusted net loss1 of $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 sold1 at 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 produced1 and AISC1 of $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.
Human Resources – A total of 1,745 personnel (including contractors) are currently employed at Condestable in mine operations, construction activities and exploration. 100% of the workforce is comprised of Peruvians (of which 48% are local from the Mala area) and 6% are female.
Health & Safety – A total of 1,048,368 person-hours were worked in Q2, with two LTIs occurring in Q2 for an LTIFR of 1.91. The two LTIs were a neck injury resulting from a concentrate truck rollover on site, and a hand injury resulting from a fall while setting up a drill rig.
Exploration – Condestable has launched a three-part exploration program for 2026. In the first quarter, a 46,480m underground diamond drilling program was initiated with the primary objective of replacing and augmenting mineral resources, and infill drilling to generate short-term reserve models. This is an annual activity at the mine; as of the end of Q2, the program is 45% complete. The second objective is to augment and delineate near-surface mineral resources in the Condestable and Raúl areas. The plan is to generate a Cu-Au-Ag mineral resource that can potentially be mined using open-pit methods. The near-surface drilling program will be defined and budgeted during the third quarter of 2026, and its execution will take place in 2027. The third objective is to carry out a 1:25,000 scale geological-structural mapping of the 46,000 hectares of mining concessions. In addition, geophysical surveys using drone magnetometry across the entire mining property were completed. This new data, generated during 2026, will be integrated with the existing multi-element surface geochemistry in the current database, with the aim of generating new regional exploration targets. This will be the first time an exploration program of this kind has been carried out across the entire Condestable land package.
Resource/Reserve Update – Rio2 announced the completion of an updated mineral resource/reserve estimate ("MRE") on June 23rd and the filing of an updated NI 43-101 Technical Report on the Condestable Mine on July 23rd. Total Measured and Indicated Resources of 82.1m tonnes (0.69% Cu, 0.13 g/t Au and 4.12 g/t Ag) and Inferred Resources of 22.2m tonnes (0.76% Cu, 0.09 g/t Au and 2.78 g/t Ag) increased from the previous figures published in the 2022 Technical Report. Updated Proven and Probable Reserves of 36.5m tonnes (0.73% Cu, 0.15 g/t Au and 4.28 g/t Ag) underpin a robust post-tax NPV at an 8% discount rate of approximately US$710m and a 14-year LOM.
Grade Enhancement and Mine Expansion Planning - During Q2, work continued on the ore sorting trial program at Condestable. Engagement with the third-party equipment supplier resulted in the execution of a pilot plant contract in mid-July. The pilot plant is expected to arrive at site before November 2026 after undergoing upgrades to key electrical systems. In the meantime, preliminary infrastructure works at site for the pilot plant are ongoing.
In addition, the Company’s projects team is continuing the basic engineering, cost estimations and timeline for the plant expansion and has also engaged third-party consultants to advance the preliminary evaluation for expanding the mine throughput to10ktpd.
The Company continues to expect to receive approval for the modification of the mine EIA during Q3 2026, including the environmental approval for increased processing capacity to 10ktpd.
The dry stack filter plant for tailings has been in commissioning during Q2 and is producing filtered tailings. This process will be incorporated into operations during Q3 as we transition from traditional wet tailings to the dry stack system. The operation of the filter plant will cover the water requirement for expanded throughput.
The remaining capital planned to be expended at Condestable in 2026, which will be funded out of cash reserves and cashflow, is summarized as follows:
| USD | |
| Sustaining capital | 7,536,000 |
| Plant expansion work | 473,000 |
| Underground mine preparation for ramp-up | 4,191,000 |
| Exploration other areas | 2,516,000 |
| Ore sorting trial plant | 1,038,000 |
| Tailings filtered plant suppliers | 6,291,000 |
| TOTAL | 22,044,000 |
EARNINGS
Selected Financial Information and Operational Highlights
| Three months ended June 30, | Six months ended June 30, | ||||||
| Financial Results: (in thousands, except per share amounts) | 2026 | 2025(2) | 2026 | 2025(2) | |||
| Copper sales | $ | 52,180 | N/A | 84,692 | N/A | ||
| Gold sales | $ | 46,996 | N/A | 77,685 | N/A | ||
| Silver sales | $ | 4,322 | N/A | 8,177 | N/A | ||
| Pricing adjustments on concentrate sales | $ | 1,773 | N/A | 575 | N/A | ||
| Consolidated revenue | $ | 105,271 | N/A | 171,129 | N/A | ||
| Net income (3) | $ | 46,804 | (1,174 | ) | 69,095 | (2,772 | ) |
| Net income per share, diluted | $ | 0.08 | (0.00 | ) | 0.13 | (0.01 | ) |
| Adjusted net income (loss) (1) | $ | 17,092 | (880 | ) | 28,907 | (2,229 | ) |
| Adjusted net income (loss) per share, diluted (1) | $ | 0.03 | (0.00 | ) | 0.05 | (0.01 | ) |
| EBITDA (1) | $ | 76,173 | (1,330 | ) | 117,161 | (3,126 | ) |
| Adjusted EBITDA (1) | $ | 46,461 | (1,036 | ) | 76,973 | (2,583 | ) |
Operating Results: | |||||||
| Copper pounds produced | lbs | 9,296,883 | N/A | 15,700,071 | N/A | ||
| Gold ounces produced | oz | 13,539 | N/A | 21,388 | N/A | ||
| Silver ounces produced | oz | 75,437 | N/A | 124,635 | N/A | ||
| Copper pounds sold | lbs | 9,295,502 | N/A | 15,499,815 | N/A | ||
| Gold ounces sold | oz | 11,071 | N/A | 17,725 | N/A | ||
| Silver ounces sold | oz | 73,606 | N/A | 120,708 | N/A | ||
| Average realized price per copper pound | $/lb | 5.94 | N/A | 5.84 | N/A | ||
| Average realized price per gold ounce | $/oz | 4,268 | N/A | 4,447 | N/A | ||
| Average realized price per silver ounce | $/oz | 69.32 | N/A | 71.69 | N/A | ||
(1) See Non-IFRS Measures.
(2) Certain comparable information was not applicable (“N/A”) for Q2 2025 as the Company’s only mine was the Fenix Gold Mine during Q1 2025 and it did not have any production or sales.
(3) Net income refers to net income attributable to the shareholders of Rio2 Limited. The portion attributable to non-controlling interests arising from the Company's interest in Compañía Minera Condestable S.A. has been excluded.
WEBINAR DETAILS
Rio2 will host a webinar on August 17, 2026, at 11:00 am ET to discuss financial results and the outlook for the company. Shareholders and investors are encouraged to participate and ask questions using the following link: https://rio2-q2-2026-call.open-exchange.net/
NON-IFRS MEASURES
This news release refers to certain financial measures, such as all-in-sustaining costs, which are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. These measures may differ from those made by other companies and, accordingly, may not be comparable to such measures as reported by other companies. These measures have been derived from the Company's financial statements because the Company believes that they are of assistance in understanding the results of operations and its financial position. Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found in the Company's MD&A for Q1 2026, available on SEDAR+ at www.sedarplus.ca under the heading “Non-IFRS Measures”.
ADJUSTED NET INCOME
Management uses Adjusted net income to evaluate the Company’s operating performance and to plan and forecast its operations. The Company believes the use of Adjusted net income reflects the underlying operating performance of our core mining business and allows investors and analysts to compare results of the Company to similar results of other mining companies. Management’s determination of the components of Adjusted net income is evaluated periodically and is based, in part, on a review of non-IFRS financial measures used by mining industry analysts. The tax effect of adjustments is based on statutory tax rates and the Company’s tax attributes, including the impact through the Company’s valuation allowance. The combined effective rate of tax adjustments may not be consistent with the statutory tax rates or the Company’s effective tax rate due to jurisdictional tax attributes and related valuation allowance impacts, which may minimize the tax effect of certain adjustments and may not apply to gains and losses equally.
Adjusted net income is reconciled to Net income in the following table:
| In thousands except per share amounts | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 | ||||||||
| Net income (loss) | $ | 46,804 | $ | (1,174 | ) | $ | 69,095 | $ | (2,772 | ) | ||
| Add back: | ||||||||||||
| Acquisition-related transaction costs | $ | 127 | $ | - | $ | 4,246 | $ | - | ||||
| Restructuring costs | $ | (186 | ) | $ | - | $ | 1,755 | $ | - | |||
| Share-based compensation | $ | 961 | $ | 294 | $ | 1,976 | $ | 543 | ||||
| Other income and expenses | $ | 960 | $ | - | $ | 640 | $ | - | ||||
| Fair value gain on Stream Obligation | $ | (31,574 | ) | $ | - | $ | (48,805 | ) | $ | - | ||
| Adjusted net income (loss) | $ | 17,092 | $ | (880 | ) | $ | 28,907 | $ | (2,229 | ) | ||
| Adjusted net income (loss) per share, Basic | $ | 0.03 | $ | (0.00 | ) | $ | 0.06 | $ | (0.01 | ) | ||
| Adjusted net income (loss) per share, Diluted | $ | 0.03 | $ | (0.00 | ) | $ | 0.05 | $ | (0.01 | ) | ||
EBITDA AND ADJUSTED EBITDA
Management uses Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) to evaluate the Company’s operating performance, to plan and forecast its operations, and assess leverage levels and liquidity measures. The Company believes the use of EBITDA reflects the underlying operating performance of our core mining business and allows investors and analysts to compare results of the Company to similar results of other mining companies. EBITDA and Adjusted EBITDA do not represent, and should not be considered an alternative to, Net income (Loss) or Cash Flow from Operations as determined under IFRS. Other companies may calculate Adjusted EBITDA differently and those calculations may not be comparable to our presentation. Adjusted EBITDA is reconciled to Net income (loss) in the following table:
| In thousands | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 | ||||||||
| Net income (loss) | $ | 46,804 | $ | (1,174 | ) | $ | 69,095 | $ | (2,772 | ) | ||
| Add back: | ||||||||||||
| Finance costs, net | $ | 2,537 | $ | (156 | ) | $ | 4,436 | $ | (354 | ) | ||
| Income tax expense | $ | 9,622 | $ | - | $ | 14,403 | $ | - | ||||
| Depletion, Depreciation and Amortization | $ | 17,210 | $ | - | $ | 29,227 | $ | - | ||||
| EBITDA | $ | 76,173 | $ | (1,330 | ) | $ | 117,161 | $ | (3,126 | ) | ||
| Add back: | ||||||||||||
| Acquisition-related transaction costs | $ | 127 | $ | - | $ | 4,246 | $ | - | ||||
| Restructuring Costs | $ | (186 | ) | $ | - | $ | 1,755 | $ | - | |||
| Share-based Compensation | $ | 961 | $ | 294 | $ | 1,976 | $ | 543 | ||||
| Other income and expenses | $ | 960 | $ | - | $ | 640 | $ | - | ||||
| Fair value gain on Stream Obligation | $ | (31,574 | ) | $ | - | $ | (48,805 | ) | $ | - | ||
| Adjusted EBITDA | $ | 46,461 | $ | (1,036 | ) | $ | 76,973 | $ | (2,583 | ) | ||
Cash cost per gold ounce sold
Cash cost is a common financial performance measure in the gold mining industry; however, it has no standard meaning under IFRS. For the Fenix Gold Mine, the Company reports cash costs on a per gold ounce sold basis. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance and ability to generate operating income and cash flow from mining operations. Cash costs are calculated as mine site operating costs, net of non-recurring items that are not reflective of the underlying operating performance of the Company and are net of silver revenue. Cash costs are divided by ounces sold to arrive at cash costs per oz sold. In calculating cash costs, the Company deducts silver revenue as it considers the cost to produce the gold is reduced as a result of the by-product sales incidental to the gold production process, thereby allowing management and other stakeholders to assess the net costs of gold production. The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS.
Cash cost per payable copper pound produced
Cash cost is a common financial performance measure in the mining industry; however, it has no standard meaning under IFRS. For Condestable, the Company reports copper cash costs on a per payable copper pound produced basis. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance and ability to generate operating income and cash flow from mining operations. Cash costs are calculated as mine site operating costs, net of non-recurring items that are not reflective of the underlying operating performance of the Company and are net of gold and silver revenue. Cash costs are divided by payable copper pounds produced to arrive at cash costs per pound. In calculating cash costs, the Company deducts gold and silver revenue as it considers the cost to produce the copper is reduced as a result of the by-product sales incidental to the copper production process, thereby allowing management and other stakeholders to assess the net costs of payable copper production. The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS.
All-in sustaining cost ("AISC") and AISC per gold ounce sold and per payable copper pound produced and All-in cost (“AIC”)
AISC and AIC
AISC is a non‐IFRS measure and was calculated based on guidance provided by the World Gold Council (WGC). Other mining companies may calculate differently as a result of differences in underlying accounting principles and policies applied, as well as differences in definitions of sustaining versus development capital expenditures.
Includes cash cost (as defined above), sustaining capital expenditures, reclamation and other closure cost accretion and amortization and lease payments (cash basis). As this measure seeks to reflect the full cost of production from current operations, expansionary capital and certain exploration costs are excluded as these are costs typically incurred to extend mine life or materially increase the productive capacity of existing assets, or for new operations. Corporate general and administrative expenses of Rio2 Limited have also been excluded as any attribution of these costs to an operating site would not necessarily be reflective of costs directly attributable to the administration of the site. However, site-level administration costs allocable to Condestable operations are included as they directly support the operating Condestable copper mine. Certain other cash expenditures, including tax payments, financing charges (including capitalized interest) and costs related to business combinations, asset acquisitions and asset disposals are also excluded.
All-in Costs is a non-IFRS measure and is calculated as AISC plus expansionary capital expenditures and expansionary exploration.
Most directly comparable IFRS measure
Production costs from continuing operations.
Why management uses the measure and why it may be useful to investors
The Company believes that this measure represents the total sustainable costs of producing copper and gold from current operations, and provides the Company and other stakeholders of the Company with additional information of the Company’s operational performance and ability to generate cash flows.
Sustaining capital expenditures
This measure is defined as cash-basis expenditures which maintain existing operations and sustain production levels.
Expansionary capital expenditures
This measure is defined as cash-basis expenditures which increase current or future production capacity, cash flow or earnings potential and are reported excluding capitalized interest. Where an expenditure both maintains and expands current operations, classification would be based on the primary decision for which the expenditure is being made.
Most directly comparable IFRS measure
Investment in mineral properties, plant and equipment and other exploration expenses.
Why management uses the measure and why it may be useful to investors
Sustaining capital expenditures provide an understanding of costs required to maintain existing production levels. Expansionary capital expenditures provide information on costs required for future growth of existing or new assets.
AISC per gold ounce sold and copper pound produced
The following reconciliations outline the calculation followed by the Company to calculate cash costs, All-in sustaining costs and All-in costs in absolute dollar terms, and on a per unit basis.
| Fenix Gold | Q2 2026 | YTD 2026 | Q2 2025 | YTD 2025 | |||
| On-site mining and processing costs (on a sales basis) | $ | 18,052 | 28,121 | N/A | N/A | ||
| Community costs related to current operations | $ | 361 | 592 | N/A | N/A | ||
| 3rd party smelting, refining and transport costs | $ | 52 | 104 | N/A | N/A | ||
| By-product and co-product credits | $ | (61 | ) | (104 | ) | N/A | N/A |
| Cash Cost⁽¹⁾ | $ | 18,404 | 28,713 | N/A | N/A |
| Corporate/regional G&A, incl. share-based remuneration (sustaining) | $ | 925 | 1,375 | N/A | N/A |
| Reclamation & remediation — accretion & amortisation (operating sites) | $ | 147 | 307 | N/A | N/A |
| Sustaining capital expenditure | $ | 97 | 97 | N/A | N/A |
| All-in Sustaining Cost (AISC)⁽¹⁾ | $ | 19,573 | 30,492 | N/A | N/A |
| Capital exploration (non-sustaining) | $ | 3,542 | 4,391 | N/A | N/A |
| All-in Cost (AIC)⁽¹⁾ | $ | 23,115 | 34,883 | N/A | N/A |
| Per gold ounce sold:⁽³⁾ | |||||
| Cash cost per gold ounce sold | US$/oz | 2,701 | 2,671 | N/A | N/A |
| AISC per gold ounce sold | US$/oz | 2,873 | 2,837 | N/A | N/A |
| AIC per gold ounce sold | US$/oz | 3,392 | 3,246 | N/A | N/A |
(1) See Non-IFRS Measures section for definitions.
(2) Q2 2025 figures are not available ("N/A") as the Company's only asset was the Fenix Gold Mine and it did not have production or sales during Q2 2025.
(3) Per-unit measures use gold ounces sold as the denominator.
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.
The following reconciliation outlines the calculation prepared by the Company to calculate what the cash costs, AISC and AIC would have been if those additional 3,343 gold ounces produced during the three months ended June 30, 2026 had been sold prior to June 30, 2026.
| Fenix Gold | Q2 2026 | ||
| On-site mining and processing costs (on a sales basis) | $ | 26,909 | |
| Community costs related to current operations | $ | 361 | |
| 3rd-party smelting, refining and transport costs | $ | 62 | |
| By-product and co-product credits | $ | (100 | ) |
| Cash Cost⁽¹⁾ | $ | 27,231 | |
| Corporate/regional G&A, incl. share-based remuneration (sustaining) | $ | 925 | |
| Reclamation & remediation — accretion & amortisation (operating sites) | $ | 147 | |
| Sustaining capital expenditure | $ | 97 | |
| All-in Sustaining Cost (AISC)⁽¹⁾ | $ | 28,400 | |
| Capital exploration (non-sustaining) | $ | 3,542 | |
| All-in Cost (AIC)⁽¹⁾ | $ | 31,942 |
| Per gold ounce sold:⁽³⁾ | ||
| Cash cost per gold ounce sold | US$/oz | 2,681 |
| AISC per gold ounce sold | US$/oz | 2,796 |
| AIC per gold ounce sold | US$/oz | 3,145 |
| Condestable | Q2 2026 | YTD 2026 | Q2 2025⁽²⁾ | YTD 2025⁽²⁾ | ||||
| Operating cost (mine, plant, energy, geology, admin, tailings) | $ | 30,080 | 49,556 | N/A | N/A | |||
| Commercial expenses (freight, port, treatment & refining) | $ | 2,167 | 3,644 | N/A | N/A | |||
| By-product credits (Au, Ag, Mo) | $ | (22,947 | ) | (40,192 | ) | N/A | N/A | |
| C1 Cash Cost⁽¹⁾ | $ | 9,299 | 13,008 | N/A | N/A | |||
| Sustaining capital expenditure | $ | 5,636 | 9,676 | N/A | N/A | |||
| SPM G&A (Management Fee) | $ | 1,100 | 2,152 | N/A | N/A | |||
| All-in Sustaining Cost (AISC)⁽¹⁾⁽³⁾ | $ | 16,035 | 24,837 | N/A | N/A | |||
| Expansionary capital expenditure (mainly tailings filter plant) | $ | 4,808 | 7,279 | N/A | N/A | |||
| All-in Cost (AIC)⁽¹⁾⁽³⁾ | $ | 20,843 | 32,116 | N/A | N/A | |||
| Per copper pound produced:⁽⁴⁾ | ||||||||
| C1 Cash cost per copper pound produced | US$/lb | 1.05 | 0.87 | N/A | N/A | |||
| AISC per copper pound produced | US$/lb | 1.81 | 1.66 | N/A | N/A | |||
| AIC per copper pound produced | US$/lb | 2.35 | 2.15 | N/A | N/A | |||
| (1) See Non-IFRS Measures section for definitions. | ||||||||
| (2) Q2 2025 figures are not available ("N/A") as the Company's only asset was the Fenix Gold Mine and it did not have production or sales during Q2 2025. | ||||||||
| (3) Stream impact reflects the Franco Nevada stream. | ||||||||
| (4) Per-unit measures use copper payable pounds produced as the denominator. | ||||||||
Realized price per pound and realized price per ounce
Defined as revenue from metal sales (copper and gold) adding back treatment and refining charges, cash effects of gold streams, recognition of deferred revenue from the allocation of upfront streaming proceeds, divided by the volume of metal sold in the period.
Most directly comparable IFRS measure
Revenue from continuing operations.
Why management uses the measure and why it is useful to investors
These measures provide an understanding of the price realized in each reporting period for metal sales.
TECHNICAL INFORMATION
The scientific and technical content of this news release has been reviewed, approved and verified by Enrique Garay, MSc P.Geo/FAIG, who is a QP under NI 43-101.
For additional information regarding Fenix Gold, see the independent technical report entitled “NI 43-101 Technical Report on the Feasibility Study for the Fenix Gold Project” dated October 16, 2023, with an effective date of October 16, 2023. For additional information regarding Condestable, see the independent technical report entitled “NI 43-101 Technical Report on the Condestable Mine, Lima Department, Peru, dated July 22, 2026, effective date of May 31, 2026”. Copies of these Technical Reports are available under Rio2’s SEDAR+ profile at www.sedarplus.ca.
ABOUT RIO2 LIMITED
Rio2 is a diversified precious metals and copper producer focused on building and operating mines with a management team that has proven technical skills as well as a successful capital markets track record. The Company is currently producing gold at its Fenix Gold heap leach mine in Chile and copper/gold/silver at its recently acquired Condestable underground mine in Peru. Rio2 and its wholly owned subsidiaries, Fenix Gold Limitada and Compañía Minera Condestable S.A., are companies that operate with the highest environmental standards and responsibility with the firm conviction that it is possible to develop mining projects that respect the three pillars (Social, Environment, Economics) of responsible development. As related companies, we reaffirm our commitment to apply environmental standards beyond those mandated by regulators, seeking to protect and preserve the environment in the territories where we operate.
Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively “forward-looking information”) within the meaning of applicable securities laws relating to Rio2’s development of the Fenix Gold Mine and other aspects of Rio2’s future operations and plans. In addition, without limiting the generality of the foregoing, this news release contains forward-looking information pertaining to the following: the anticipated mining and production rates for the remainder of 2026; anticipated production for 2026 and 2027 at Fenix Gold and Condestable, and guidance for same; details of drilling at both the Fenix Gold and Condestable mine, including costs and objectives of the drilling program and timing for commercial production (in respect of Fenix Gold); impact of the new truck fleet at the Fenix Gold mine and resolution of operator and truck availability issues; timing for, and impact of, high grading at the Fenix Gold mine; impact of equipment purchases on operations; commencement of mining at Fenix Central; projected gold recovery levels; results of Rio2’s efforts to hedge against rising fuel costs; timing and outcome of the desalinated water studies for Fenix Gold; capital expenditures at Fenix Gold through 2026; activities relating to the near-surface drilling program at Condestable, geological/structural mapping activities, and the magnetometry geophysical survey at Condestable, and the impacts and outcome of same; timing and anticipated outcome of pilot program at Condestable, including timing for related approvals; grade enhancement and mine expansion activities and timing; timing for an updated MRE report on Condestable; and other matters ancillary or incidental to the foregoing.
All statements included herein, other than statements of historical fact, may be forward-looking information and such information involves various risks and uncertainties. Forward-looking information is often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. The forward-looking information is based on certain key expectations and assumptions made by Rio2’s management, including but not limited to: expectations concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; capital efficiencies; legislative and regulatory environment of Chile and Peru; future mining and production rates and estimates of capital and operating costs; expectations regarding the availability of financing when needed; estimates of reserves and resources; anticipated timing and results of capital expenditures; the sufficiency of capital expenditures in carrying out planned activities; results of operations; performance; the anticipated timing and results of expansion studies and related approvals; the availability and cost of financing, labor and services; and Rio2’s ability to access capital on satisfactory terms.
Rio2 believes the expectations reflected in these forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements in this news release should not be unduly relied upon. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in Rio2's most recent annual information form on the SEDAR+ website at www.sedarplus.ca. These risks and uncertainties include, but are not limited to: risks and uncertainties relating to market conditions, risks associated with our operations, and management’s ability to anticipate and manage the factors and risks referred to herein.
Forward-looking statements included in this news release are made as of the date of this news release and such information should not be relied upon as representing its views as of any date subsequent to the date of this news release. Rio2 has attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimates expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. Rio2 disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation.
To learn more about Rio2 Limited, please visit: www.rio2.com or Rio2's SEDAR+ profile at www.sedarplus.ca.
ON BEHALF OF THE BOARD OF RIO2 LIMITED
Alex Black
Executive Chairman of the Board
Email: alex.black@rio2.com
Tel: +51 99279 4655
Kathryn Johnson
Executive Vice President, CFO & Corporate Secretary
Email: kathryn.johnson@rio2.com
Tel: +1 604 762 4720
