Rio2: Condestable Expansion Approved, Fenix on Track for 100koz in 2027
Summary
Super El Nino disrupted Fenix Gold first-year heap-leach ramp-up, prompting Rio2 to pull 2026 gold guidance rather than chase unattainable numbers.
Wheaton gold prepay (95,000 oz over 7 years) is Rio2 main balance-sheet drag - they plan to retire it via senior debt once AISC hits ~$2,000/oz.
Condestable copper mine (EIA-approved expansion to 10,000 tpd, FID targeted H2 2026, sub-$50M capex) adds a steady-state cash engine to a one-asset junior.
Fenix targets 20,000 tpd throughput and ~100,000 oz by 2027 at AISC ~$2,000/oz - the spread against todays gold price drives meaningful free cash flow.
Alex Black long-term vision is a lean, three-mine LatAm gold-copper producer - small Lima team and no Canadian HQ make Rio2 an attractive eventual takeover target.
Key points on Artemis Gold
- Cited by the guest as a model after a roughly $450M CAD debt restructuring with National Bank about six months before the interview
Key points on Kinross Gold
- The guest notes Kinross has three projects in the same Chilean region as Phoenix Gold: producing La Coipa 10 km north, Lobo Marte in EIA, and the suspended Maricunga mine
- Kinross is working closely with Rio2 on shared desal water supply, which the guest calls the only realistic option to expand Phoenix or restart Maricunga
Key points on Rio2
- The guest argues Phoenix Gold is on track for ~100,000 oz per year in 2027 at a 20,000 t/d steady-state run rate, with first gold poured at the start of 2026 on a roughly $150M build
- Acquired the Condestable copper-gold mine in Peru at the start of 2026 to de-risk a single-asset junior profile; expansion decision targeted for H2 2026 with capex under $50M, first expanded tonnes in H1 2028
- AISC target is ~$2,000/oz versus $1,250 in the 2023 feasibility study; recovery is expected around 75%, with a $45M vendor promissory note on Condestable plus a 95,000 oz Wheaton gold prepay over ~7 years (8,000 oz due this year)
- Long-term Phoenix expansion into 2030/31 depends on desal water, and the guest says Rio2 is working closely with Kinross as the only other operator in the area needing it
- Market cap sits near $1.8B to $2B; the guest sees three operating mines as optimal, is open to more LATAM M&A, and frames Rio2 as a long-term build aimed at becoming an attractive takeover target
Key points on Wheaton Precious Metals
- Holds a 95,000 oz gold prepay on Rio2's Phoenix Gold deliverable over roughly 7 years, with 8,000 oz due in 2026 and ~2,500 oz already paid
- The prepay was struck when gold was less than half of current levels, making it valuable to Wheaton and costly to Rio2, which is exploring a buy-out or restructuring with Canadian banks
Alex Black's takeaways
- Top takeaway Argues Rio2 is fairly valued at roughly $1.8B to $2B today and that any re-rating depends on executing to ~100,000 oz per year at Phoenix plus Condestable's expansion
- Frames Phoenix as a long-term story rather than a quick flip; says the super El Nino disrupted the 2026 ramp-up but the team is documenting learnings for the 2027 target year
- Defends a multi-asset strategy, calling a one-asset junior profile dangerous and pointing to Condestable's steady-state copper cash flow as a hedge through Phoenix's startup
- Open to another LATAM M&A deal in the next 12 months if the right asset appears, but sees three operating mines as the optimal scale, not Equinox-sized
- Says the end game is to make Rio2 attractive to a larger acquirer, noting that everything is for sale at the right price once the platform reaches sufficient scale