$RIOFF : Rio2 Limited — Independent Economic Analysis

Long-Term Price Case$1,700/oz. Au
ProjectFenix (Cerro Maricunga[OLD])
Mineral Reserves3,743,000 ozs.
Shares Outstanding118,239,464
Market Cap$38,427,826
Average Annual Production227,895 ozs.
Recovery79.2%
LoM13 Years
Payable Product2,962,630 ozs.
True All-in Cost (TAIC) $1,333/oz.
Gross Revenue$5,036,471,000
Royalties($251,823,550)
Gross Income$4,784,647,450
Total Operating Cost($2,748,135,588)
Operating Profit$2,036,511,862
Income Taxes($549,858,203)
Total Capital Costs ($398,900,000)
Net Income$1,087,753,659
Net Profit Margin22%
Absolute Cost Structure (ACS)78%
MTQ Score0.3
True Value$9.20/sh.
Cash Flow Multiple5x
Annual Cash Flow$83,637,465
Future Market Cap$418,187,325
Future Market Cap Growth988%
Target$3.54/sh.

Notes: All Values in U.S. Dollars

The Fenix Project is on the high end of the TAIC curve. It will need higher gold prices to be viable. Above $1,700, Net Profit Margin becomes sustainable. It is important to note that social investment costs will be much higher than envisioned by Atacama Pacific and that will have a further deleterious impact on margins, as has the 35% increase in Chilean Corporate Taxes since 2014.

MTQ Score Comparison

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