Rio2 Limited has announced its acquisition of the Condestable copper-producing mine in Peru for a total of US$217 million. This significant move transforms the company from a single-asset gold developer in Chile into a diversified producer of precious and base metals across Latin America. The deal, finalized with private owner Southern Peaks Mining, is expected to provide immediate cash flow as the company expands its operations.
Under the terms of the agreement, Rio2 will pay US$180 million at closing, anticipated in January 2026. The payment structure includes US$80 million in cash, US$65 million in a six-year vendor-take-back debt, and 21.9 million Rio2 common shares valued at US$35 million. Additionally, there will be US$85 million in deferred payments, due between 2027 and 2030, which can be settled in cash or shares at the company’s discretion. This brings the headline price of the acquisition to US$241 million when considering US$24 million in net debt.
To facilitate this purchase and secure working capital, Rio2 has arranged a capital raising of C$140 million at C$2.22 per share, led by investment firms including Raymond James, Stifel Nicolaus Canada, and BMO Capital Markets. A separate private placement of up to C$14 million in Peru, Colombia, and Chile is also in progress but is not essential for completing the acquisition.
The Condestable mine, located just 90 km south of Lima, has been operational for over 60 years. It currently produces 27,000 tonnes of copper equivalent annually from an 8,400 tonne per day processing plant. According to Rio2’s executive chairman, Alex Black, this acquisition represents a pivotal moment for the company, marking its transition from a gold developer to a diversified producer.
Black stated, “The acquisition of Condestable marks a major moment in Rio2’s evolution. With first gold production at Fenix Gold just weeks away, Condestable brings immediate and growing cash flow to support our future growth in gold.” The company aims to increase throughput at the mine to 12,000 tonnes per day, with potential for open-pit mining additions.
The Condestable mine operates on 100% renewable hydroelectric power and has received Copper mark accreditation. Its electrification efforts for the mining fleet further emphasize its commitment to sustainable operations. Over the next five years, the mine is predicted to generate average annual EBITDA of US$110 million at prevailing copper prices. However, with current spot prices around US$5.35 per pound, projections suggest annual EBITDA could reach as high as US$145 million. This financial strength could effectively fund expansions at both the Fenix Gold project in Chile and the Condestable operation.
Once the acquisition is finalized, the combined operations of Condestable and the existing Fenix Gold mine are expected to yield approximately 180,000 gold-equivalent ounces annually for Rio2, with a pathway to 380,000 ounces following the planned phase two expansion at Fenix. This acquisition not only diversifies Rio2’s portfolio but also solidifies its position in a top-tier jurisdiction alongside its flagship project in Chile, where construction is currently 80% complete.
In summary, Rio2’s acquisition of the Condestable copper mine marks a significant shift in its business strategy, enhancing its operational capabilities and financial outlook. The company is poised to leverage its new assets to drive growth and establish a stronger foothold in the Latin American mining sector.
