Thanks everyone. We're going to keep this on time. Now we're staying in Chile in gold. I'm going to welcome Andrew Cox, President and CEO of Rio2, TSX Venture. Hey, Andrew.
Hi.
That's fine. Forward, back, there's no point.
No pointer?
No point.
Are we good to go? Are we still?
Good to go.
Okay. Thank you. Good afternoon, everyone. As the screen says, I'm Andrew Cox, CEO of Rio2. I imagine some people were maybe expecting to see Alex Black here today, and I apologize for that. You've got me instead, so it is what it is. As the title said, we are building a gold mine in Chile. It's been a long process, and we're currently 11 months into a 14-month construction schedule. Our reader advisory, which you can read on our website if you so desire. We'll move on to a panoramic view of the Fénix Gold Project. The Fénix Gold Project is located in Chile in the third region, Atacama. It's basically the diatreme of a volcano, and the three peaks that you can see, Fénix North, Central, and South, are basically breccia complexes intruded into the host dacite and andesite volcanic rock.
You can see at the bottom of the screen there, the resource is 4.8 million ounces at CAD 1,800 gold. We have a million ounces in inferred material. Why Rio2? This is probably more for investors than mining people, but it is one of the largest oxide resources in the world. Rio2 is employing a staged development approach, so initially we start at 20,000 tons a day, water restricted. In parallel to that, we are working to expand the project to 80,000 tons a day, where we realize the full potential and the size of the resource. We are permitted and financed to construction. The management team, the technical team are basically 90% of people who have come from what was Rio Alto Mining back in 2009/2015, where we built and operated two projects in Peru. A quick snapshot of the directors, senior management, the management team.
90% of these people are from the Rio One experience. I think that's important for us as a management team going forward, that we have done this before twice in Peru, and we're repeating that in Chile. Capital structure, basically 430 million shares out. You can see the share price has taken off over the last six months or so. If we look back to what was 2022, we suffered a permitting problem in Chile with the rejection of our EIA. Share price crashed down to CAD 0.12. We lost CAD 100 million in a couple of days and entered into appeal process that took over 18 months, and we were able to get the EIA reapproved again. Since then, we've been on an uptick with permitting, with financing, and actual construction. A list of the bigger shareholders. You can also see that on the website, on the presentation.
I don't want to go through them one by one. Atacama region in Chile, like I mentioned. We're approximately 160 km from Copiapó, located in the Maricunga Gold Belt. Maricunga Gold Belt has demonstrated over 80 million ounces worth of gold. There's big projects to the south, Caspiche, Cerro Casale. We are located adjacent to Kinross's La Coipa operation. La Coipa is an operation today producing around 200-plus thousand ounces. La Alumbrera, which is down to the southeast of us, also with Kinross. La Pepa, Volcan, which are exploration projects to the south, water-constrained. Refugio, or Maricunga as it's known by some people, is also a Kinross project, which is in care and maintenance for water issues. The region is water-challenged, and the water solution for Maricunga is probably a very strategic asset which unlocks a whole lot of mining potential in the zone.
The project is 100% oxide, which is an oddity in Maricunga. I think most of the projects in Maricunga are transitioned into sulfide, high copper content. Fenix Gold has a very low copper content. We have a drill hole to 600 m where we are still in oxides. We have not found transition. We don't know where that happens yet. It's a very clean metallurgy. Low copper, low silver, no mercury. Leaches very well with a ROM sizing. This will be a ROM heap leach operation. Also, the exploration potential in near project for the expansion of the resource is certainly something that we'll be looking at once we start cash flow. Long section through the deposit from northwest through southeast. Basically, the vertical sort of structures that you can see in the screen are related to the breccia pipes.
The vertical breccia structures that come up through the volcano. We have bulk mineralization. This is disseminated, so it's not picking mining after chasing high-grade structures. It's really bulk mining. You can see 345 m at 0.75. It lends itself to a heap leach operation with bulk transport of mineral to the pad and leaching to average grade of that's about 0.5 within res-reserve pit. The reserve pit, what you're looking at in the blue line at the top, which defines sort of like three individual pits, is the reserve. They were calculated at CAD 1,650 gold back at September last year. The black line beneath that is the resource pit calculated CAD 1,800. Potential at depth. Obviously, if we ran that today with CAD 2,500 gold or something, the pit's going to deepen and widen and bring in more ounces.
At this stage, we're focusing on stage 1, and we don't really need to worry about that. The reserves that I mentioned, 1,650 gold, 1.8 million ounces. Basically, the stage 1 project at this stage. If we ran that flat for 17 years, we produce 1.3 million ounces after recovery. The resources, including the reserves, 4.8 million, 1 million inferred. I've mentioned most of the other comments down below already. Resource growth potential. Now that we start cash flowing, we will start exploring around the deposit. The geologists are getting very excited about employing AI. Basically, using all our databases that we've accumulated over the time we've had the project, combine them into the AI software, which then will predict potentially what are the areas that we should be exploring, where we should be drilling. This is still a work in progress.
We haven't done this yet, but it's in process. We would compare that to the traditional old-fashioned model where the geologists look at the maps and the plans and say, "Let's drill here," and let's see what AI says, and is there any difference. This is, for example, the old-fashioned way where the geologists have looked at the model and said, "We have gaps. We have material that can be converted from inferred to resource." This is where we would start if we went tomorrow without using AI. That's something that we'll be looking at in probably second half of next year when we are cash flowing. Phase 1. As I mentioned, the area's water-restrained. To start this project in a fast-track manner, we have opted to truck water to the project.
It's not the most economical or efficient solution to the problem, but it does enable us to start work. We are purchasing treated wastewater from the town supply and trucking that to site. That approximately equates to get to 20,000 tons a day. That was equal to 2,000 cubic meters of water per day or 72 truckloads. It's going to be quite an operational and logistical exercise to achieve that. We'll start trucking that next month, October, and it'll be a gentle ramp-up towards next year when we start mining. Basically, the trucking, we know it's not ideal. We know it's not perfect, but it gets the project up and running and buys us time to resolve the pipeline solution, which we are currently working on in parallel. Phase 2, the water pipeline. This is probably a four-and-a-half-year exercise for us.
It's not something that's going to happen overnight. We are talking to two companies which currently today have desal plants operating on the coast and are delivering water to Copiapó, the city. Both of these have the intention, the ability to expand production and bring more water to Copiapó. We are working with both of those to produce two scoping studies for the end of the year. Those scoping studies will then provide us with the information that we require to complete a pre-feasibility study on the expanded case for the project. We hope to see that probably February next year. Then we make a decision to move forward by ourselves or with third parties who are also looking for water in the area. That's where we're going. We estimate basically two years for engineering permitting and two years for construction.
A rough cost estimate on that, in case anyone's wondering, is probably about CAD 400 million at this point in time. That enables us to unlock the project, we take it to 80,000 tons a day. We produce 300,000 ounces a year for over 10 years once that's implemented. It becomes a world-class gold mine at that point. A layout of the stage 1 project, how it would appear if we mined the 17 years that were presented in the feasibility study last year. You can see the three pits in gray, basically aligned along the northwest-southeast structure. The waste dump in the foreground in pink. The leach pad in orange to the north, some stockpiles. In the stage 1, we start mining with an artificial cutoff. We use 0.4 instead of 0.2, which is the cutoff that was used in the feasibility.
That allows us to achieve 0.7 grade into the leach pad to start with, we can produce year 1, 65,000 ounces for the ramp-up. We go to 100,000-ounce profile for 3 years, dovetail to the pipeline into 2030, when we ramp to 300,000 ounces. The water pipeline is the key here. It unlocks the project. It generates the value that it really has in terms of a resource. We're probably looking at a CAD 3 billion-CAD 4 billion project at today's metal prices. This is the economic sensitivities on our PFS from last year for the small-scale project, the 20,000 tons per day. When we did that study last year, gold price we used in the model was 1,750 gold, and that equated to an NPV of $210 million. Today, at today's spot market price, 3,500 gold, the project's worth $1.3 billion.
It just shows you the impact of the gold price on a project. $210 million to $1.3 billion just on gold price alone. Some photos, a bit of a photo run-through of what we're doing with the construction. This is our camp facilities, 600 beds. We built that back in 2022 before the permit was rejected. It was a jump start for us with the project. This year, the camp was ready. It was waiting, and we were able to mobilize construction very quickly. The leach pad. In the background, you can see 12 hectares of plastic that's been placed. In the bottom of the valley, we've placed overliner material, which is screened gravel, and we are now placing mineral on that pad ready for plant commissioning in November.
In November, we will start circulating leach solution and leaching that mineral, looking forward towards the plant commissioning and gold production in January next year. The PLS pond in the foreground, where the pregnant leach solution accumulates. You can see basically the pump house where the barren pumps will be located to pump the solution back up to the pad after processing the absorption circuit. In the very corner of the photo is the ADR plant. ADR plant, probably 2 weeks ago. The absorption circuit is largely completed. We're working towards finishing the deabsorption, the reactors for acid washing. The area with no roof on at the moment, we're starting to put roof is the gold room, which will be the last thing that we deliver. We're sort of building, delivering in the order of the process. Absorption finished first, deabsorption, and finally, recovery or gold.
The red tank in the back corner is the water reception tank. The platform above that is where the trucks will drive in, turn around, dump into a concrete trough that they drive over, then that water will run down into the process water tank. Parallel to that, we are setting up for mining in Fenix South. Fenix South is the lowest altitude pit of the three pits. Maybe I didn't mention this, but this is a high altitude project. Fenix North is 5,000 meters, Fenix Central is 4,900, and Fenix South is 4,800. It also has a flat topography, so it's a very easy start for us to open up space and get benches going and start drilling and having grade control activities happening in a pretty reasonable timeframe. We just completed a 9,000-meter RC program.
We went back across the mining area for the next two years, 25 by 25 meters. We drilled 120-meter deep holes, that equates to two years' worth of mining material. We're in the process of receiving the results from that drilling, we will be turning that into a short-term model, which we'll then reconcile with our long-term model. Hopefully we'll see a slightly positive uptick in the grade and tonnes, which will equate to ounces at the end. Quickly, sort of a recap of where we've come from. The environmental study. We did all the geotech. Impact study was filed. We did geotechnical, comminution drilling, the engineering.
We did a ROM trial, we mined 500 tonnes of material that we blasted from site, processed it, during 90 days, we received a 75% recovery, which was what we expected, that gave us the confidence to take the crusher out of the circuit. We achieved a P80 of 4 inch on the blasting alone without crushing. The crusher, whilst it's permitted, it won't be built at this stage. We had the EIA approval December 2023. Since then, the local permitting activities to start construction. Project financing October last year. Mine construction ongoing. In parallel, we are working on the distal water strategy, which will feed into the mine expansion study, the PFS, which we hope to release February 2024. Finally, the mine expansion EIA, which will be based on the mine expansion study, the technical engineering and information.
Excellent.
Okay.
Thanks, Andrew.
Thank you.
Right on time. Thank you very much.