Rio2 Limited

you know companies put out quarterlies they regurgitate or do a flash presentation about what they just announced the day before or a few days before and there's very little interaction from from shareholders apart from some analysts asking questions etc and 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. So really this is just a casual discussion and an ability for anybody and everybody to ask questions either via text or verbally. And we like to be as open as possible. There's no judgment if you're a retail investor and own a thousand 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. and 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, we'll attend to them. We'll also attend to people who raise their hands to ask questions as well. So it's a very open forum and very relaxed, okay? So I'll start off and kick off by saying we have here four of us from Rio too. As 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 Catherine's in Vancouver on this call. So 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. We've only reported Two quarters from both Condé Stable and Phoenix Gold. As you know, Condé Stable was an acquisition that we made in January or closed in January. It's been under our belt for five months and 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. So 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, extinct volcano, We reported on fragmentation. We said that there was some and acidic 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, oversize being greater than four inches. And we talked about the fact that we're dealing with our explosive 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 tonnes a day. With throughput, we were hitting our straps in early July and we were actually I'm feeling quite confident that we could declare that we were at a steady state of more than 20,000 tons a day during Q3 but 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 that at Phoenix Gold with regards to weather. So 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, but 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. And so right now it looks like we've lost about two weeks of production during July. and 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. So 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 Condé Stable 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, I don't know if you want to talk more about some of the things that I just brought up.

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

Yeah, it's starting to come up. It's just loading now. Just let me know. Yeah, there is. Yep.

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

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

So Phoenix Gold typically receives 15 centimetres of precipitation a year, which generally is in the form of small snowfalls, greater for snow events a year of maybe five centimetres. In the July The event we had close to half a meter of snow of everything and then in the second event in August which we've just we're coming out of now or dealing with now we've had over a meter and across the project in some places up to three meters where the winds accumulated snow so very atypical and basically two 10-year events in three weeks is what we've lived through so You know, tough, tough dealing with cleaning up all the snow to get access to everything again. That's the hard part. The lech pad, for example, you'll see in the photos is covered in a couple of metres of snow at the moment. You know, while we re-establish access to Phoenix South, at the same time we have to clean the leach beds so we can start depositing material. So if you're looking at Phoenix South there on the screen, you can see it's opened up, you know, we've got two or three different mining areas where we can mine. As Alex mentioned in July, we were achieving 20,000 tons a day before we had to stop for the storm. So we were well on track to achieve that. And we expect to get back to that once we start mining again. Some of the issues from Q1 we reported, you know, 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's 42 tonne capacity They arrived, they were 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 that the operators as Alex mentioned was resolved that there wasn't an issue into Q3 and also the excavators you can see on the right there's two 90 tonne capped 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. When we talked about the andesite-desite material, you can see on the right-hand side of the photo the breaches, the volcanic breaches blast very well. The finer material, you can see the brown. And to the left, behind the truck over here, you can see the andesite-desite 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 to change the pattern change the loading power factor etc the detonation method with double detonator 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 you can see that there wasn't Thank you for joining us today. Thank you for joining us. There was a trial and error we got there and obviously in these two snow events which we've had July and August we've been able to keep leeching and the leech pad operation has been normal despite the storm and the snow and the freezing temperatures so that's a positive for us that we've resolved that and how we're going to operate the leech pad going forward. Thank you very much. That was our PLS pond during the first storm event in July. Obviously, snow settling on the pond and freezing. You can see the snow accumulated around the sides. Obviously, the pond itself is not frozen, but just the top. We're talking temperatures of minus 24 that we were experiencing during that event.

And this has been a positive for our water balance, right?

Correct. So we talked in the press release about the mineral coming from Phoenix South having higher humidity content than we expected. We planned on 1%. Thank you very much. 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 water inflow from the leach pad to the BLS bond. So a positive from the snow events and Obviously from the second event we're going to have a lot more order than the first event so something we can try and calculate and use in the future.

I guess what we'd like to say too is because you know right 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. I mean, we have a haulage contractor that's dealing with trucking the water and things have been progressing really, really well.

So yeah a photo after the July event once we'd re-established access to the plant obviously the snow's there and the biggest problem during the storm event was the visible they say whiteout conditions with the snow being windblown you can't see so we had to wait four or five days and then we took four or five days to open everything up again and re-establish access You can just see the snow that was accumulated on site, which you'll be able to compare to the August event in the later photos. So that's after the event, access to site on the left, the access road to the project, opening that up, and then the photo on the right is the mining access, so re-establishing access to Phoenix South. on our main haul roads. It just takes time. It's all machinery and time to clear the snow and re-establish access. This is the second event, the August event. It's 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've seen over 120 mils of precipitation on site in two days, which is... Sorry, it was 120, or 1.2, so it was almost 10 times, over 10 times typical yearly precipitation. And then the impacts of that, not only on site, but also on the access road to the project. So this is the CH31, the international highway which runs from Copiapó across to Argentina. Our access to site for water for all our consumables, and obviously Thank you for joining us today. A crossing that's deliberately been designed for these sort of events to channel the water across the road and you can see it's probably three meters deep of sediments being deposited in that crossing which had to be removed and cleared. Just other damage to the road from water flows, surface flows. Obviously it's a dry region and when you get a lot of rain coming down the water courses I think it's not that well established and the water runs where it wants to run. It's cut out the road in two or three places like this and quickly fixed, just filled it in with material and put the grader over it so it wasn't that big a deal to re-establish access but again it's time and it'll be repaired properly in due course. So again this is the August event, this photo on the left is the road from the mining camp which we have at actually kilometers at 3,200 meters that's the snowfall arrived right down to there went further downstream as well so 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 so you can see There's no event that's over a metre and a half in lots of places with snow accumulation. Same thing, you know, arriving to the ADA plant, you can see Again, well over a metre of snow across the plant. The photo at the bottom right shows the containers that some of the officers are in at the moment, completely buried. So 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 fumes, other consumables back to the plant again. There's a photo of our lech pad. If you can imagine the lech pad there, you saw in the other photo the black plastic covers were apparent. You can see them this time that you can't though. They're in this big flat surface sort of to the right of the centre and that's the lech pad currently. So that's part of what we're dealing with now is reopening these accesses to the lech pad, to the mining. It's a lot more slow than we saw previously in the July event. Moving on to Condé Stable quickly, just a photo of the tailings filtration 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 probably by the end of this month. We'll be ramping that up and dealing with all our tailings. So that's happening. Geology at the exploration program so 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 Biophysics combined with the field mapping will now lead into the design of an open pit drilling campaign. So we'll be drilling probably 5,000 to 10,000 meters over that surface potential area to help define the resource and maybe leading towards a potential future open pit project. and the medium to long term. Same again, the surface mapping. And then the other thing happening at Conde de Sable is the all sorting trial. We've got a photo that we've purchased. It's not at Contest W yet. It arrives in October. So it's a referential photo of what the 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 flow chart you can see below, basically processing 1,600 tonnes per day to receive approximately 850 tonnes of processed mineral of enhanced grade. So we're looking at 0.4 material being improved to 0.65, maybe 0.7. And that trial will run for six to nine months and enable us to make a decision. 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 produce results. 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 certainly days we'll run the trial and see how that goes so that's the end of the photos yeah and 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 Nino, which is in place at the moment. It's an El Nino that most analysts are saying is the strongest in recorded history. Here in Lima, where we are, it's five to seven degrees above normal temperatures in Lima. uh for this time of the year uh we had a rain event in Lima yesterday which is unusual for this time of the year usually if there is any any rain in in in Lima and the average rainfall here is 10 millimeters per per annum is um uh occurs in in in summer so really weird stuff going on but uh anyway You know not not ideal if people were following us during last year when we were building the project we had typical weather events snow flurries etc which didn't stop construction uh we we constructed on time and on budget so you know we just hit a hit a tough spot during ramp up and and obviously um it's not ideal but uh it is what it is and we roll up our sleeves and and get on with it and battle through it. So 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. I won't, 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 Q2, your highlights say $3.10 ASIC, but your reconciliation table says US$1.81. Is the difference the Franco-Nevada stream and which number should we model?

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

Okay, next question. Once Phoenix reaches commercial production of steady-state 20,000 tons a day, what is currently the working assumption for forecast ASIC for a full year of operations? I mean, 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, you know, 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. So, Andrew, do you want to?

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 is approximately half the ownership cost of the rental gear that we had, so there's going to be a We won't see that yet, but I'd like to hope September, 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.

I'll move on to the next question. Fenix stacked 19,325 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?

Okay so yeah the feasibility study assumes 70-75% that's what we're looking for and you know what you're looking at there from Q2 is a product of a 90-day leach cycle material goes to the pad you know we don't put it straight into leach sometimes we will finish building a cell and so different timeframes on material going to leach. You have percolation times because the bed's now got in some places up to three 10 meter lifts on it. So it's basically a two meter per day percolation time. So 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 trolling the plastic covers with some of the initial cells that weren't covered froze. So really it'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 a much better feeling on how that's tracking There's just too many variables there at the moment, sorry 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?

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 metres down, 200 metres down, it may change, but we can't guarantee that it stays at 4%, but logically it should. and 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 the same amount of water. So that's where we'd expect to go with that. and many more. Okay, next question.

Probably about one to one and a half years ago, the ASIC was forecasted to be about US$1,250, but clearly due to inflation and energy costs, it has to be higher nowadays, but I noticed that it was about 3100 in Q1 2026 and it is a bit lower in Q2 at about 2700. Where do you see ASIC stabilising and going towards and how long will it take to get there? Thank you very much.