/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO
U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
(IN CANADIAN DOLLARS UNLESS OTHERWISE
STATED)
VANCOUVER, July 23, 2019 /CNW/ - Rio2
Limited ("Rio2" or the "Company") (TSXV: RIO;
OTCQX: RIOFF; BVL: RIO) announces that it has entered
into an agreement with Cormark Securities Inc. ("Cormark"),
pursuant to which Cormark shall purchase 43,750,000 units of the
Company (the "Units") at a price of $0.40 per Unit, on a "bought deal" private
placement basis, for aggregate gross proceeds to the Company of
approximately $17.5 million (the
"Offering").
Each Unit will consist of one common share of the Company (a
"Common Share") and one-half of one Common Share Purchase Warrant
(each full warrant, a "Warrant"). Each Warrant will entitle the
holder to acquire one Common Share of the Company at an exercise
price of $0.50 for a period of 36
months following the closing of the Offering.
The Company has also granted Cormark an option to sell up to an
additional 6,562,500 Units at the offering price up to the Closing
Date (the "Option"). In the event that the Option is
exercised in its entirety, the aggregate gross proceeds of the
Offering will be $20.1 million.
The Company also announces that Eric
Sprott has agreed to purchase $9.2
million of the Offering. On completion of the Offering,
Eric Sprott will own 19.9% of the
issued and outstanding shares of the Company on a partially diluted
basis (excludes potential shares issued from the Option).
The Offering is scheduled to close on or about August 13, 2019 and is subject to certain
conditions including, but not limited to, the receipt of all
necessary regulatory and other approvals including the approval of
the TSX Venture Exchange.
Alex Black, President and Chief
Executive Officer of Rio2, stated, "This financing is a major
milestone for Rio2 as it sets the company on a clear path to
advance our Fenix Gold Project through the Environmental Impact
Study (EIS) and permitting process in Chile. This work is an essential precursor to
the future construction of the project which when built, will be
the only gold oxide heap leach mine operating in Chile. I would also like to welcome
Eric Sprott as a new, large
shareholder of the company and look forward to working with Mr.
Sprott as the Fenix Gold Project is advanced and as we pursue our
strategy of developing Rio2 into a multi-asset precious metals
company focused on quality mining assets in the Americas."
The net proceeds of the Offering will be used to complete the
following activities for the Company's 100% owned Fenix Gold
Project; complete the Project's EIS baseline study, prepare and
file the EIS study with the Chilean authorities, complete
engineering studies in preparation for future mine construction
activities, commence permitting activities for the project,
commence the review of financing options for construction of the
project and continue social activities related to the project, as
well as for general corporate and working capital purposes.
Fenix Gold Project
The results of the updated prefeasibility study ("PFS") for
Rio2's 100% owned Fenix Gold Project located in the Atacama Region,
Chile, are now expected to be
released on or about August 30, 2019.
The updated PFS is strategically focused on an optimally configured
starter project 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.
Mr. Enrique Garay, MSc. P.Geo
(AIG Member), Senior Vice President Geology of Rio2, is the
Qualified Person (as defined by NI 43-101) responsible for managing
the Company's exploration programs and disclosure of drilling
results. Mr. Garay has read and approved the scientific and
technical information in this news release.
This new release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in
the United States. The securities
have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act"),
or any state securities laws and may not be offered or sold within
the United States or to or for the
account or benefit of a U.S. person (as defined in Regulation S
under the U.S. Securities Act) unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
To learn more about Rio2 Limited, please visit: www.rio2.com or
Rio2's SEDAR profile at www.sedar.com.
ON BEHALF OF THE BOARD OF RIO2 LIMITED
Alex Black
President, Chief Executive Officer & Director
Tel: +1 (604) 260-2696
Email: info@rio2.com
Cautionary Statement on Forward-Looking Information
Certain information set forth in this news release contains
"forward-looking statements", and "forward-looking information
under applicable securities laws. Except for statements of
historical fact, certain information contained herein constitutes
forward-looking statements, which include expectations about the
timing and completion of the Offering; the use of proceeds from the
Offering; management's expectations with respect to the Offering;
the timing for the completion of the updated PFS; the suitability
of the Fenix Gold Project for staged development, including a
smaller starter project; and the potential for the characteristics
of the smaller starter project to include lower initial capex,
initial mining of higher grade ore and a lower strip ratio, all as
compared to the 2014 PFS, and are based on Rio2's current internal
expectations, estimates, projections, assumptions and beliefs,
which may prove to be incorrect. Some of the forward-looking
statements may be identified by the use of conditional or future
tenses or by the use of such words such as "will", "expects",
"may", "should", "estimates", "anticipates", "believes",
"projects", "plans", and similar expressions, including variations
thereof and negative forms. These statements are not guarantees of
future performance and undue reliance should not be placed on them.
Such forward-looking statements necessarily involve known and
unknown risks and uncertainties, which may cause Rio2's actual
performance and financial results in future periods to differ
materially from any projections of future performance or results
expressed or implied by such forward-looking statements. These
risks and uncertainties include, but are not limited to: risks and
uncertainties relating to the completion of the Transaction and the
Offering as described herein, and management's ability to
anticipate and manage the foregoing factors and risks. There can be
no assurance that forward-looking statements will prove to be
accurate, and actual results and future events could differ
materially from those anticipated in such statements. Rio2
undertakes no obligation to update forward-looking statements if
circumstances or management's estimates or opinions should change
except as required by applicable securities laws. The reader is
cautioned not to place undue reliance on forward-looking
statements. Rio2 disclaims any intention or obligation to update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise, except to the extent
required by securities legislation.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Rio2 Limited