While busy building a multi-asset copper and gold producer in South America, Rio2 Limited has turned its attention north, dusting off a legacy asset in Canada to add a critical minerals string to its copper-gold production bow.
The company has filed an independent technical report for its Kalzas tungsten project in Canada’s Yukon, validating a wealth of historical data and laying the groundwork for the first exploration program on the ground in more than 15 years.
Tungsten is classified as a critical mineral in North America due to its use in defence, aerospace and electronics, with its price surging tenfold to record highs of US$3200 per metric tonne unit (MTU) in just the last 5 years alone. One MTU equates to 10 kilograms.
Rio2’s Kalzas project sits within the Selwyn Tungsten Belt in the Yukon, one of Canada’s most established provinces for the heavy metal.
The project has a long history of exploration, having been first discovered in 1978 and subsequently explored by Union Carbide in the early 1980’s before a downturn in the tungsten market saw it relinquished.
Despite being dormant since 2008, the historical data paints a compelling picture of a large-scale mineralised system. Past surface work delineated a tungsten-in-soil anomaly stretching 1.5 kilometres long and up to 900 metres wide. Trenching by Union Carbide returned a remarkable 1.04 per cent tungsten trioxide across lengths up to 150m.
Historical drilling, though limited to just 11 holes, also delivered a suite of notable intercepts. One hole hit a 1.9m interval grading a solid 1.12 per cent tungsten trioxide within a broader 48m zone.
Another campaign delivered a monster 101.4m intersection running 0.22 per cent tungsten trioxide, which included a higher-grade core of 15m at 0.29 per cent tungsten trioxide.
The technical report concludes that Kalzas hosts a well-characterised porphyry-style tungsten system with meaningful bulk-tonnage potential. It notes that historical drilling has barely scratched the surface, testing a small 300m by 200m zone within the much larger surface anomaly.
Armed with this validation, Rio2 has laid out a two-phase exploration program budgeted at up to CA$2,200,000 to unlock the big 1500m-long tungsten anomaly.
Once approvals are in place, phase one fieldwork will involve data compilation, geological mapping and surface sampling to refine drill targets.
Phase two is expected to see the drill bit turn for the first time since 2008, with a planned diamond drilling program of up to 2000 metres.
The drilling will target depth extensions below the 180m historically tested, probe for extensions along the 1.5km strike of the surface anomaly and test the undrilled western flank of Kalzas Mountain.
Before breaking ground, the company must complete a site reclamation program and formalise an exploration agreement with the Selkirk First Nation, with whom it says it is committed to working collaboratively.
While the move to reactivate Kalzas appears to be a shrewd, low-cost gambit, Rio2’s primary focus remains on its producing Fenix gold mine in Chile and the recently acquired Condestable copper mine in Peru.
The company recently updated its resource estimate for Condestable, tabling a formidable combined estimate of 82.1 million tonnes in the measured and indicated category, grading 0.69 per cent copper, 0.13 grams per tonne (g/t) gold and 4.12g/t silver. The inventory now contains a hefty 565,000 tonnes of copper, 355,000 ounces of gold and 10.87 million ounces of silver.
At Fenix, Rio2's cornerstone asset in the prolific Maricunga gold belt, the deposit recently transitioned from development into production. The heap leach operation hosts a staggering 389 million tonnes of ore grading 0.38g/t gold, for a total of 4.8 million measured and indicated ounces.
The project is now ramping up towards steady-state mining rates of 20,000 tonnes per day, with production expected to reach 60,000 to 70,000 ounces this year before averaging about 91,000 ounces annually over its first 12 years.
Although Kalzas may have sat idle for almost two decades, the timing of its revival could hardly be better. With tungsten prices at record highs and governments scrambling to secure critical mineral supply chains, Rio2's forgotten Canadian asset suddenly looks anything but forgotten.
If the upcoming drill campaign confirms the scale hinted at by the historical data, the company could have unearthed a valuable third pillar to complement its growing gold and copper business.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Andrew Todd
