Canadian gold mining company Rio2 said it will acquire a Peruvian copper mine for $241 million, signaling a strategic push to expand its presence in Latin America and increase its exposure to base metals.
On December 8, Rio2 announced that it would purchase a 99.1% stake in the Condestable copper mine from Southern Peaks Mining, which is backed by U.K. private equity firm Global Natural Resource Investments.
The total deal includes $180 million in upfront cash, $80 million in additional cash financing, $60 million in debt financing, and $35 million in Rio2 common shares. Southern Peaks will also receive $37 million in deferred payments between 2027 and 2030. Rio2 is also assuming $24 million in debt, bringing the total transaction value to $241 million.
Following the announcement, Rio2 shares fell as much as 5%, trading at CAD 3.26 per share, amid investor concerns over dilution. The company’s market capitalization remains near CAD 1 billion.
Alex Black, chairman of Rio2, said the acquisition represents a key milestone in the company’s transformation. “This deal marks an important step in moving Rio2 from a single-asset gold developer to a diversified mineral producer in Latin America,” he said.
Located about 90 kilometers south of Lima, the Condestable mine has a continuous production history of more than 60 years. The site operates a processing plant with a daily capacity of 8,400 tons. Current underground mining operations can expand to 12,000 tons per day, and the mine also offers potential for open-pit development.
According to Mining.com, Condestable is expected to produce about 27,000 tons of copper equivalent annually, generating roughly $110 million in cash flow under fixed-price assumptions and about $145 million at spot pricesover the next five years.
Rio2 said the cash flow from Condestable will be used to fund expansion at its Phoenix Gold project in Chile. Once integrated, Rio2 expects annual gold production of approximately 120,000 ounces, with potential output rising to 380,000 ounces following the second phase of the Phoenix Gold expansion.
