Gold Developer Expands Portfolio With Strategic 15% Acquisition

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Royal Road Minerals Ltd. (RYR:TSX) has confirmed that Rio2 Ltd. (RIO:TSX.V; RIOFF:OTCQX; RIO:BVL) has acquired 39,855,000 ordinary shares, representing approximately 15% of Royal Road's issued and outstanding shares. The transaction, completed through a block trade on the TSX Venture Exchange on September 26, 2025, also resulted in Rio2 becoming an insider under Canadian securities laws and TSX Venture Exchange policies. The total consideration for the shares was US$4,583,325, paid at a price of 11.5 cents per share.

Prior to this acquisition, Rio2 held no equity in Royal Road. In conjunction with the transaction, the companies entered into an investor rights agreement granting Rio2 participation rights in future financings to maintain or increase its pro rata ownership, subject to a cap of 15%. The agreement also allows Rio2 to nominate a board member, provided it maintains at least a 9.5% stake in the company.

Royal Road President and CEO Tim Coughlin described the development as a pivotal moment, stating in the news release, "Rio2 is a bold and dynamic company with an exceptional record of developing world-class gold projects." He emphasized the strategic fit between the two companies and the potential for future collaboration.

Rio2 Executive Chairman Alex Black cited a longstanding professional relationship with Coughlin and highlighted the geological appeal of Royal Road's assets. Black noted that the investment aligns with Rio2's interest in optionality across exploration opportunities, while maintaining a focus on the company's Fenix Gold Project in Chile.

Gold Sector Sees Record Capital Inflows in Q3 2025

Gold prices continued their upward trajectory into October, briefly reaching a new all-time high late in the month. On September 30, Bloomberg reported that gold had gained more than 10% over the month, with analysts attributing the momentum to rising fiscal and geopolitical uncertainty, including the threat of a U.S. government shutdown. These developments reinforced gold's status as a defensive asset and contributed to heightened investor interest.

That same day, Goldman Sachs Research issued a market outlook identifying several key factors supporting recent price strength. Analyst Lina Thomas wrote that prices could reach as high as US$4,000 per troy ounce by mid-2026, citing continued official sector accumulation and the likelihood of easing monetary policy by the U.S. Federal Reserve. According to survey data included in the report, 95% of central banks expected global gold reserves to increase over the next year, with much of the demand projected to come from emerging markets.

Meanwhile, technical analyst Stewart Thomson offered a more cautious assessment in his September 30 newsletter. He noted that gold had recently reached a technical target of US$3,800 and warned of possible short-term corrections due to elevated geopolitical risks and ongoing fiscal challenges in the United States. Thomson added that prices above US$3,000 remained attractive for most gold producers and advised conservative investors to consider limiting profit-taking to approximately 30% of their holdings.

On October 1, Rocks Daily reported that gold mining companies raised record levels of capital through share issuances during the third quarter of 2025. The publication stated that the sector saw the highest-ever quarterly proceeds from equity financing, driven by sustained strength in bullion prices and growing investor demand for exposure to gold-producing assets. The trend marked a significant shift in capital markets activity and reflected broad-based confidence in the gold sector heading into the fourth quarter.

Expert Analysis Highlights Confidence in Rio2

On September 24, Ben Pirie and Nicholas Cortellucci of Atrium Research reiterated a Buy rating and maintained a target price of CA$2.40 per share. The analysts highlighted Rio2's strategic move to sign memoranda of understanding for desalinated water supply, a development viewed as critical to supporting a potential expansion of the Fenix Gold Project.

The Atrium analysts wrote that "this initiative would provide RIO with enough water to proceed with a potential large expansion to the current mine plan," referencing a planned increase in throughput to 80,000 tonnes per day for an estimated 300,000 ounces of annual gold production. Atrium also emphasized that Rio2 had continued to advance construction on schedule and under budget, noting that material had already begun being placed on the leach pad with the first gold expected in early Q1 2026. The firm valued the Fenix project at US$843.1 million using a 5% discount rate and US$2,700 per ounce gold price, applying a 0.8x multiple to reach its equity valuation.

Jeff Clark of The Gold Advisor maintained a buy-on-weakness recommendation and concluded, "This improves the long-term upside potential for Rio2."

According to a September 29 update from Matthew O'Keefe at Cantor Fitzgerald, Rio2 remained on track for production and offered attractive valuation metrics relative to producing peers. The firm reaffirmed its Buy rating and CA$2.50 price target, citing construction progress at Fenix and the strategic benefit of acquiring a 15 percent stake in Royal Road Minerals.

O'Keefe stated that Rio2's investment "adds upside potential and diversification," while also noting that the company remained well-funded with no debt and cash equivalents totaling CA$13.2 million. The firm also pointed to Rio2's ongoing pre-feasibility study for expanding throughput to 80,000 tonnes per day and increasing production from approximately 80,000 ounces to 300,000 ounces of gold annually. Cantor reported a price-to-NAV ratio of 0.6x for Rio2, compared to a 1.0x average among producers.

In an October 2 commentary, Jeff Clark of The Gold Advisor described Rio2 as being in a strong financial position, with the Fenix Gold Project fully permitted and fully funded. He stated that Rio2 "plans to have first pour in January" and added that the company had secured a US$120 million royalty agreement for 95,000 ounces of gold.

Clark also referenced a CA$55 million private placement that included a CA$5 million investment from Wheaton Precious Metals. He maintained a buy-on-weakness recommendation and concluded, "This improves the long-term upside potential for Rio2."

Catalysts Section: Optionality Meets Operational Strength

Rio2's acquisition of a significant equity stake in Royal Road comes amid the company's ongoing development of the Fenix Gold Project, which is considered one of the largest undeveloped oxide gold resources in the Americas. Located in Chile's Maricunga Gold Belt, the project contains 4.8 million measured and indicated ounces of gold at a gold price of US$1,800 per ounce.

The Fenix Gold Project is permitted and fully financed for construction, with a two-phase development plan beginning at 20,000 tonnes per day. A flexible US$100 million prepay financing arrangement, supplemented by a US$25 million gold stream and US$20 million standby loan facility, has been structured with Wheaton Precious Metals. These funding mechanisms are designed to cover capital costs, working capital, and contingencies with limited equity dilution.

According to Rio2's investor materials, over US$31 million has already been spent on preconstruction activities at Fenix Gold. The project also benefits from a low strip ratio of 0.85 and an all-in sustaining cost (AISC) of US$1,237 per ounce, based on a 2023 feasibility study. An industrial water supply has been secured via trucking from Copiapó for initial operations, with expansion plans supported by desalinated water sources already under review.

With this share acquisition, Rio2 adds potential exposure to exploration-stage assets in Colombia, Saudi Arabia, and Morocco through Royal Road's portfolio, diversifying its jurisdictional footprint while maintaining its primary focus on advancing production capabilities in Chile.

Ownership and Share Structure

According to Refinitiv, about 8% of the company is owned by insiders and management, about 7% by holding companies, and about 23% by institutions. The rest is retail.

Top shareholders include Mackenzie Investments with 8.74%, 2176423 Ontario Ltd. with 7.3%, Knowave AG with 4.62%, Alexander Black with 4.27%, and SSI Wealth Management AG with 3.29%.

Its market cap is CA$639.44 million with 425.55 million shares outstanding. It trades in a 52-week range of CA$0.50 and CA$1.64.