Rio2 Q2 2026 Earnings Report

Rio2 EPS Results

• Actual EPS: C$0.04
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Rio2 Revenue Results

• Actual Revenue: $149.57 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Rio2 Announcement Details

• Quarter: Q2 2026
• Date: 8/13/2026
• Time: After Market Closes
• Conference Call Date: Monday, August 17, 2026
• Conference Call Time: 11:00AM ET

Rio2 (TSE:RIO) 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.

Rio2 Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Phoenix Gold’s operational bottlenecks are easing: recruitment issues have been resolved, the owned mining fleet is on site, and throughput briefly reached the targeted 20,000 tonnes per day before weather disruptions.
• Negative Sentiment: Exceptional snowfall and rainfall in Chile halted or limited Phoenix Gold operations for roughly two weeks in July and another two weeks in August. The company is still clearing access roads, mining areas, and the leach pad, delaying its expected steady-state ramp-up.
• Neutral Sentiment: Phoenix Gold’s expected recovery is 70%–75%, but management said it needs more operating history to assess recoveries because of differing leach-cycle timing and earlier freezing issues on uncovered cells.
• Positive Sentiment: Ore humidity is running at about 4%, versus the 1%–1.5% assumption, reducing water requirements by roughly 25%. If sustained, management believes the operation could potentially process 20,000–25,000 tonnes per day without proportionally more water.
• Neutral Sentiment: Condestable’s tailings filtration plant is nearing full-time operation, while mapping, geophysics, planned drilling, and a six-to-nine-month ore-sorting trial could support future production growth. Management has not yet provided a firm long-term Phoenix Gold AISC forecast, citing inflation, energy costs, and the lack of steady-state production data.

Presentation

[Alex Black, Executive Chairman at Rio2 Limited]

Companies put out quarterlies. They regurgitate or do a flash presentation about what they just announced the day before or a few days before. There's very little interaction from shareholders apart from some analysts asking questions, et cetera. We've decided we don't want to regurgitate numbers. We've been quite explicit in the way that we've put out our quarterly numbers with an update as well, to put everything out there as far as how we're progressing and where things are going and how we're performing. This is just a casual discussion and an ability for anybody and everybody to ask questions either via text or verbally. We like to be as open as possible. There's no judgment.

[Alex Black, Executive Chairman at Rio2 Limited]

If you're a retail investor and own 1,000 shares, but you've got a question that's burning a hole in your brain about what you want to ask us, please go ahead and ask us. As you know, I deal with emails a lot. I put my email address out there. It's in the press releases. People do communicate with me by email, and I do answer those emails. So, I try and communicate with people as best as possible. We do interviews, but unfortunately, those interviews are not interactive. This is one way of getting over that by having some sort of interaction with investors. So, please feel free to ask questions. I can see now on my screen already three messages, three text questions have come through, so that's good.

[Alex Black, Executive Chairman at Rio2 Limited]

We'll attend to them. We'll also attend to people who raise their hands to ask questions as well. It's a very open forum and very relaxed. Okay? I'll start off and kick off by saying we have here four of us from Rio2. There's myself, I'm the Executive Chairman. Mariano Alarco, he's the Director of Operational Excellence. Andrew Cox, President and CEO, and Kathryn Johnson, who's our CFO. Mariano, myself and Andrew are in Lima in Peru, and Kathryn's in Vancouver on this call. The thing I want to do is just open up with the fact that we did put out our quarter. You can see that our quarter, from a numbers perspective, was an improvement on the first quarter that we put out this year.

[Alex Black, Executive Chairman at Rio2 Limited]

We've only reported two quarters from both Condestable and Phoenix Gold. As you know, Condestable was an acquisition that we made in January or closed in January. It's been under our belt for five months, and it is doing very well on a steady state basis. Phoenix Gold's in ramp-up, and we've been as explicit as possible about all the challenges that we've gone through in respect to ramp-up. The key issues that we identified in Q1 were in regards to recruitment of people. We are over that hump now, and we reported that in our Q2 results. Space, mining space, Phoenix South taking off the peaks, and you can see the deposit here. There's Phoenix South there, Phoenix Central and Phoenix North.

[Alex Black, Executive Chairman at Rio2 Limited]

Extinct volcano, virtually at close to 5,000 meters above sea level. So making space to generate a pit with working areas, et cetera, was a challenge in Q1, and we're starting to get over that. We reported on fragmentation. We said that there was some andesitic material, which is hard material in relation to the brecciated volcanics. It's about 30% of what we're mining at the moment is breaking to oversize being greater than 4 inches. We talked about the fact that we're dealing with our explosives contractor and looking at trying to optimize that and reduce the fragmentation on that harder material. Throughput, we are aiming to get to a steady state of 20,000 tons a day. With throughput, we were hitting our straps in early July.

[Alex Black, Executive Chairman at Rio2 Limited]

We were actually feeling quite confident that we could declare that we were at a steady state of more than 20,000 tons a day during Q3. That appears not to be the case because of the extreme weather events that we've been through, and we're going to talk more about that. Andrew's going to show some photos as to what we're dealing with at Phoenix Gold with regards to weather. We've lost some time in production at Phoenix Gold during these weather events. No damage, no safety issues. We've looked after our people. Getting ore onto the pad has been problematic from the point of view of working safely and having people available at site to do that. Right now it looks like we've lost about two weeks of production during July.

[Alex Black, Executive Chairman at Rio2 Limited]

It looks like we're going to lose about two weeks again in August because of the weather. Once again, Andrew will talk more about that in a minute. I'll just hand over to Andrew to go through that. I think we'll look at what we're dealing with, have a look at some photos on both Phoenix Gold and Condestable, and then deal with the questions. I now have about five written messages or questions presented here, so we'll get through those as quickly as possible after Andrew does the presentation. Andrew?

[Andrew Cox, President and CEO at Rio2 Limited]

Yep.

[Alex Black, Executive Chairman at Rio2 Limited]

I don't know if you want to talk more about some of the things that I just brought up.

[Andrew Cox, President and CEO at Rio2 Limited]

Sure. Just bear with me for a second while I pull up the file. Okay. Can you see that, Alex?

[Alex Black, Executive Chairman at Rio2 Limited]

Yeah, it's starting to come up. It's just loading now.

[Andrew Cox, President and CEO at Rio2 Limited]

Just let me know when.

[Alex Black, Executive Chairman at Rio2 Limited]

Yeah, there is. Yep. Got Phoenix South.

[Andrew Cox, President and CEO at Rio2 Limited]

Okay. This is a photo of Phoenix South in better times when it is not buried in snow so much. This was taken early August before the second storm event. We had the July storm event, 16th of July, that basically shut us down for almost two weeks effectively of production. Then, at the time of publication of the press release, we went into a second event, which was worse than the July one. We had almost three times as much snow, and we are still opening up access again to the project.

[Alex Black, Executive Chairman at Rio2 Limited]

Andrew, do you want to just elaborate on what the average precipitation is in the region?

[Andrew Cox, President and CEO at Rio2 Limited]

Phoenix Gold typically receives 15 centimeters of precipitation a year, which generally is in the form of small snowfalls, three to four snow events a year of maybe five centimeters. In the July event, we had close to half a meter of snow of everything. Then in the second event in August, which we are coming out of now or dealing with now, we have had over a meter across the project and in some places up to three meters where the wind has accumulated snow. So very atypical and basically two 10-year events in three weeks is what we have lived through. Tough dealing with cleaning up all the snow to get access to everything again, that is the hard part.

[Andrew Cox, President and CEO at Rio2 Limited]

The leach pad, for example, you will see in the photos is covered in a couple of meters of snow at the moment. While we reestablish access to Phoenix South, at the same time we have to clean the leach bed so we can start depositing material. If you are looking at Phoenix South there on the screen, you can see it is opened up. We have got two or three different mining areas where we can mine. As Alex mentioned, in July, we were achieving 20,000 tonnes a day before we had to stop for the storm. We were well on track to achieve that, and we expect to get back to that once we start mining again.

[Andrew Cox, President and CEO at Rio2 Limited]

Some of the issues from Q1 we reported, we were working with contracted hired trucks while we were waiting for the owned fleet, the fleet that was purchased by a contractor for the project. You can see there that the Scania truck is 42-tonne capacity. They arrived, they are on site. They arrived during Q2, and at the start of Q3, we had the full fleet of trucks on site, which solved one of our problems, which was availability. The operators, as Alex mentioned, was resolved, that wasn't an issue into Q3. Also the excavators, you can see on the right, there's two 90-tonne Cat excavators, which also arrived during Q2. So from a mining fleet perspective, everything's on site, the drills, the trucks, the diggers. So that's not a restriction anymore.

[Andrew Cox, President and CEO at Rio2 Limited]

When we talked about the andesite/dacite material, you can see on the right-hand side of the photo, the breccias, the volcanic breccias blast very well. The finer material, you can see the brown. To the left, behind the truck over here, you can see the andesite/dacite material, which is obviously much harder and we've been having some issues with oversized material that we mentioned in the press release, that Alex talked about, working with our blasting contractor to try and improve blasting, change the pattern, change the loading, power factor, et cetera. The detonation method, we've double detonated. So we're working on that and improving it, but you can see the difference in the grain size or the fragmentation in that photo. This is basically after the first event.

[Andrew Cox, President and CEO at Rio2 Limited]

You can see that there wasn't that much snow deposited on the leach pad. But what I'm trying to show in this photo here are the black plastic covers that we talked about in the press release. You can see down in the lower left foreground that the black covers over the pad, that they've worked very well for us. The insert photo shows basically the ambient temperature outside the pad and then inside the pad, which is basically a difference of 12 degrees. So using those covers keeps temperature in the pad, and we were able to combat the freezing issues that we had in May with some of those early cold temperatures that came on. That's working well, and it's also obviously avoiding evaporation, so it's saving water for us.

[Andrew Cox, President and CEO at Rio2 Limited]

That's it was a trial and error we got there and obviously in these two snow events which we've had July and August, and we've been able to keep leaching and the leach pad operations been normal despite the storm and the snow and the freezing temperatures. That's a positive for us that we've resolved that and how we're going to operate the leach pad going forward in winter conditions. Just take a note of the snowfall here because this was the first event. Later you'll see a photo of the leach pad after the recent event, and you'll be able to see the difference in the amount of snow that was deposited. That was our PLS pond during the first storm event in July.

[Andrew Cox, President and CEO at Rio2 Limited]

Obviously, snow settling on the pond and freezing and you can see the snow accumulated around the sides of it. Obviously, the pond itself is not frozen, but just the top. We're talking temperatures of -24 degrees Celsius that we were experiencing during that event.

[Alex Black, Executive Chairman at Rio2 Limited]

This has been a positive for our water balance, right?

[Andrew Cox, President and CEO at Rio2 Limited]

Correct. We talked in the press release about the mineral coming from Phoenix South having higher humidity content than we expected. We planned on 1%-1.5%, and that is coming back at 4%. The amount of water required on the leach pad to saturate the material so the solution percolates is approximately 25% less than we expected. That has been a positive. We have got more than enough water. We have never been water constrained in the project. Then additional to that, in the July event with the snowfall that we received, we calculated that we received something like 13,000 cubic meters of inflow, water inflow from the leach pad to the PLS pond. A positive from the snow events and obviously from the second event, we are going to have a lot more water than the first event.

[Andrew Cox, President and CEO at Rio2 Limited]

Something that we can try and calculate and use in the future.

[Alex Black, Executive Chairman at Rio2 Limited]

I guess what we would like to say too is because while we were building this project and talking about trucking water, a lot of people were worried about our ability to truck water and provide water to this project. Water has never been a bottleneck for us to date on this project. We have a haulage contractor that is dealing with trucking the water and things have been progressing really, really well.

[Andrew Cox, President and CEO at Rio2 Limited]

Yeah. Well, yeah, a photo after the July event and once we had reestablished access to the plant. Obviously, the snow is there and the biggest problem during the storm event was the visibility, so white-out conditions with the snow being windblown, you cannot see. We had to wait four or five days and then we took four or five days to open everything up again and reestablish access. You can just see that the snow that was accumulated on site, which you will be able to compare to the August event in later photos. Okay. That is after the event. Access to site on the left, the access road to the project, opening that up. Then the photo on the right is the mining access, so reestablishing access to Phoenix South on our main haul road.

[Andrew Cox, President and CEO at Rio2 Limited]

It just takes time, that is all. It is machinery and time to clear the snow and reestablish access. This is the second event, the August event. It is a shot from an app, and you can see that it was a major precipitation event that lasted four to five days, so much more precipitation. We have seen over 120 centimeters of precipitation on site in two days, which is. Sorry, it was 120. It was 1.2, so it was almost 10 times, over 10 times the typical yearly precipitation. Then the impacts of that, not only on site, but also on the access road to the project. This is the CH-31, the international highway, which runs from Copiapó across to Argentina.

[Andrew Cox, President and CEO at Rio2 Limited]

Our access to site for water, for all our consumables and obviously below 3,000 meters, typically that precipitation on site, which is snow, turns to rain. This is a rain event in the Atacama Desert. Again, a sort of a one-in-10-year event. You can see some of the damage to the road, which has been reestablished. We have fixed this since two or three days ago with Kinross. On Saturday, we were able to reopen. Just to give people a feeling, this is a crossing that is deliberately been designed for these sort of events to channel the water across the road, and you can see it is probably 3 meters deep of sediment has been deposited in that crossing, which had to be removed and cleared. Just other damage to the road from water flows, surface flows.

[Andrew Cox, President and CEO at Rio2 Limited]

Obviously, it is a dry region, and when you get a lot of rain coming down, the water course is not that well established and the water runs where it wants to run, and it has cut out the road in two or three places like this. Quickly fixed, just filled it in with material and put the grader over it. It was not that big a deal to reestablish access. But again, it is time and it will be repaired properly in due course. Again, this is the August event. This photo on the left is the road from the mining camp, which we have at 20 kilometers at 3,200 meters. That is the snowfall arrived right down to there. It went further downstream as well.

[Andrew Cox, President and CEO at Rio2 Limited]

We had to open up the public road and then the middle photo is our internal access to the project, and then the photo on the right is the ADR plant. You can see. The snow event was over a meter and meter and a half in lots of places of snow accumulation. Same thing, arriving to the ADR plant. You can see again, well over a meter of snow across the plant. The photo at the bottom right shows the containers that some of the offices are in at the moment, completely buried. We had 30 people stayed up on site to keep the plant running during that period, and we established access back to them on Saturday to be able to relieve them and get fuel and other consumables back to the plant again.

[Andrew Cox, President and CEO at Rio2 Limited]

There's a photo of our leach pad. If you can imagine the leach pad there, you saw on the other photo the black plastic covers were apparent. You can see them. This time you can't, though. They're on this big flat surface sort of to the right of the center, and that's the leach pad currently. As part of what we're dealing with now is reopening these accesses to the leach pad, to the mining. There's a lot more snow than we saw previously in the July event. Moving on to Compañía Minera Condestable quickly. Just a photo of the tailings infiltration plant that's been commissioning the last couple of months. It's operating now and it's about ready to go into full-time production.

[Andrew Cox, President and CEO at Rio2 Limited]

Probably by the end of this month, we'll be ramping that up and dealing with all our tailings via the filtering process to dry stack. That's happening. Geology at Compañía Minera Condestable, the exploration program. We've completed a surface mapping campaign all over what would potentially be the future open pit area. Geophysics across the whole concession package has been done, and geophysics combined with the field mapping will now lead into the design of an open pit drilling campaign. We'll be drilling probably 5,000-10,000 meters over that surface potential area to help define the resource and maybe leading towards a potential future open pit project in the medium to long term. Same again, the surface mapping. Then the other thing happening at Compañía Minera Condestable is the ore sorting trial.

[Andrew Cox, President and CEO at Rio2 Limited]

This is a photo of the plant that we've purchased. It's not at Compañía Minera Condestable yet. It arrives in October. So it's a referential photo of what the sort of sorting plant looks like. And we plan to install this in Q4 once the equipment's here. It's something similar to the photo. It'll be a small trial set up, industrial pilot trial, where we'll run approximately 1,500-1,600 tons per day from waste stockpiles and low-grade stockpiles and processing according to the flowchart you can see below. Basically, processing 1,600 tons per day to receive approximately 850 tons of processed mineral from plant feed. We're looking at .4 material being improved to .65, maybe .7. That trial will run for 6-9 months and enable us to make a decision.

[Andrew Cox, President and CEO at Rio2 Limited]

Is it really working as well as the lab results? Is it something that we can employ? And if it's successful, obviously, we'll take it to an industrial scale and add in maybe two or three circuits and be able to produce a couple of thousand tons per day to help with the ramp-up process to 12,000 tons per day. But yeah, it's early days. We'll run the trial and see how that goes. That's the end of the photos.

[Alex Black, Executive Chairman at Rio2 Limited]

Yeah. Hopefully, that gives everybody a bit of an overview of where we're at. The weather event in Chile has been caused by a super El Niño, which is in place at the moment. It's an El Niño that most analysts are saying is the strongest in recorded history. Here in Lima, where we are, it's 5 to 7 degrees above normal temperatures in Lima for this time of the year. We had a rain event in Lima yesterday, which is unusual for this time of the year. Usually, if there is any rain in Lima, and the average rainfall here is 10 millimeters per annum, occurs in summer. Really weird stuff going on. Anyway, not ideal.

[Alex Black, Executive Chairman at Rio2 Limited]

If people were following us during last year when we were building the project, we had typical weather events, snow flurries, et cetera, which didn't stop construction. We constructed on time and on budget. We've just hit a tough spot during ramp-up and obviously, it's not ideal, but it is what it is, and we roll up our sleeves and get on with it and battle through it. Just to give you some idea of what we're dealing with. I've got some questions here that people have sent us, so maybe we'll just go through them. Just for confidentiality, I won't mention the person's name, but I will ask the question and get our team to answer. In Condestable at Q2, your highlights say $3.10 AISC, but your reconciliation table says USD 1.81.

[Alex Black, Executive Chairman at Rio2 Limited]

Is the difference the Franco-Nevada stream and which number should we model?

[Kathryn Johnson, EVP and CFO at Rio2 Limited]

I'll take this one. Hi. Yes, the difference is the Franco-Nevada stream. I would model the higher number because that includes, I guess, the true cost of AISC.

[Alex Black, Executive Chairman at Rio2 Limited]

Okay. Next question. Once Phoenix reaches commercial production of steady state, 20,000 tonnes a day, what is currently the working assumption for forecast AISC for a full year of operations? I might jump in there first before you do, Andrew. I think that's the whole part of ramp-up, is to get to the nominal throughput and to do it consistently, and then to look at what the costs do look like. It's very hard to project. There's been diesel inflation in Chile, there's been labor inflation in Chile, and we need to come to grips with all that in our numbers and obviously once we get to a steady state, be able to project into 2027. Andrew, do you want to elaborate on that at all?

[Andrew Cox, President and CEO at Rio2 Limited]

Yeah. I think that's the right answer. During Q3, we would have liked to have been at 20,000 tonnes per day, and we would have started to really understand what our costs are with the new mining equipment that's arrived, for example. The cost of that equipment's approximately half the ownership cost of the rental gear that we had, so there's going to be an impact from that. Unfortunately, we're just not at steady state production, so we won't see that yet. But I would like to hope September or October, once we're back in normal operations, we'll have a good idea on what that number probably looks like going into next year.

[Alex Black, Executive Chairman at Rio2 Limited]

Okay. I'll move on to the next question. Phoenix stacked 19,325 contained ounces. Hang on. What happened to that? Yeah. Okay. Contained ounces in Q2 and produced 9,088, 47%. What ultimate recovery does the feasibility study assume? And what are you seeing on the oldest cells of the pad?

[Andrew Cox, President and CEO at Rio2 Limited]

Okay. So yeah, the feasibility study assumes 70%-75%. That's what we're looking for. And what you're looking at there from Q2 is a product of a 90-day leach cycle. Material goes to the pad. We don't put it straight into leach. Sometimes we will finish building a cell, so different time frames of material going to leach. You have percolation times because the pad's now got in some places up to three 10-meter lifts on it. So it's basically a 2 meter per day percolation time, so it's 15 days for solution to come down. We had some freezing issues, too, that we talked about in the press release in May, when we were trialing the plastic covers. Some of the initial cells that weren't covered froze.

[Andrew Cox, President and CEO at Rio2 Limited]

So really that's a question that I probably can't give you a good answer to just right now. I think by late this year, we'll have much better feeling on how that's tracking. There's just too many variables there at the moment. Sorry.

[Alex Black, Executive Chairman at Rio2 Limited]

Yeah. A lot of balls in the air. Okay, next question. Do you expect the water consumption per tonne of ore, 75% of design, to remain at that level? If so, could mine throughput be expanded as water was the bottleneck of the operation?

[Andrew Cox, President and CEO at Rio2 Limited]

Yeah. That's basically how we're seeing it. We've come down four benches now in Phoenix South, and that humidity content at 4% in the ground is maintaining. Obviously, we get 100 meters down, 200 meters down, it may change. But we can't guarantee that it stays at 4%, but logically it should. If that's the case, that 25% difference in water required to saturate material would enable us to process an additional 25% of ore. Assuming we maintain the same trucking level that was planned on, budgeted on, we can potentially process 25% more ore volume and with the same amount of water. So that's where we'd expect to go with that, ramping up into 20,000-25,000 tonnes per day during next year or late this year.

[Alex Black, Executive Chairman at Rio2 Limited]

Okay. Next question. Probably about one to one and a half years ago, the AISC was forecasted to be about $1,250. But clearly due to inflation and energy costs, it has to be higher nowadays. I noticed that it was about $3,100 in Q1 2026, and it is a bit lower in Q2 at about $2,700. Where do you see AISC stabilizing and going towards, and how long will it take to get there? Thank you very much.

Participants

Executives

• Alex Black, Executive Chairman
• Andrew Cox, President and CEO
• Kathryn Johnson, EVP and CFO