Rio2 Limited Announces $10 Million Bought Deal Private Placement

TORONTO, May 14, 2018 - Rio2 Ltd. (“Rio2” or the “Corporation”) (TSX-V:RIO) is pleased to announce that it has entered into an agreement with Clarus Securities Inc. and Raymond James Ltd. (collectively the “Underwriters”), pursuant to which the Underwriters have agreed to purchase for resale, on a bought deal private placement basis, 10,000,000 subscription receipts (the “Subscription Receipts”) at a price of $1.00 per Subscription Receipt for gross proceeds to Rio2 of $10,000,000 (the “Offering”). The closing of the Offering is expected to take place on or about June 7, 2018. Kallpa Securities SAB of Lima, Peru will act as a special selling agent in Latin America in connection with the Offering.

The Offering is being completed in connection with the previously announced business combination (the “Transaction”) between Rio2 and Atacama Pacific Gold Corp. (“Atacama”). Please see the joint press release of Rio2 and Atacama dated May 14, 2018 for further information with respect to the Transaction. The gross proceeds from the Offering will be deposited and held in escrow and shall be released immediately prior to the completion of the Transaction upon the satisfaction of certain conditions (the “Escrow Release Conditions”). Each Subscription Receipt will entitle the holder thereof to receive 0.6667 of a common share of the combined company as part of the Transaction.

Alex Black, President and Chief Executive Officer of Rio2, stated, “This financing demonstrates Rio2’s management’s credibility and ability to gather financial support in the North American and Latin American capital markets to fund the company’s business strategy of building an America’s focused, multi-asset precious metals company. I particularly would like to thank existing large institutional shareholders of both Rio2 Ltd. and Atacama Pacific Gold Corp. and incoming new shareholders for their confidence and support in getting this financing done.”

The Corporation has granted the Underwriters an over-allotment option (the “Over-Allotment Option”) to purchase for resale an additional 1,500,000 Subscription Receipts for gross proceeds of $1,500,000 on the same terms and conditions as the Offering. The Over-Allotment Option is exercisable in whole or in part up to 48 hours prior to the closing of the Offering.

The Subscription Receipts will be issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”) to be entered into among the Corporation, the Underwriters and a subscription receipt agent to be agreed upon. Pursuant to the Subscription Receipt Agreement, the gross proceeds from the Offering (less 1/2 of the Underwriters’ cash commission and all of the Underwriters’ expenses) (the “Escrowed Funds”) will be held in escrow pending satisfaction of the Escrow Release Conditions, including (a) the satisfaction or waiver of each of the conditions precedent to the Transaction, without amendment or waiver in a manner that would be materially adverse to Rio2; and (b) the receipt of all required shareholder, third party (as applicable) and regulatory approvals in connection with the Transaction, including the conditional acceptance by the TSX Venture Exchange (“TSX-V”) of the listing of the common shares of the combined company on the TSX-V.

Upon satisfaction of the Escrow Release Conditions, the Escrowed Funds, together with any interest earned thereon, will be released to the Corporation. If the Escrow Release Conditions have not been satisfied by 5:00 p.m. (EST) on the date that is three months from the closing date of the Offering, the Subscription Receipts will be deemed to be cancelled and holders of Subscription Receipts will receive a cash amount equal to the offering price of the Subscription Receipts and any interest that has been earned on the Escrowed Funds.

The net proceeds of the Offering will be used by the Corporation for additional drilling and studies related to completing a definitive feasibility study for the Cerro Maricunga Gold Project, expenses of the Transaction, as well as for general corporate and working capital purposes.

DLA Piper (Canada) LLP is the legal advisor of Rio2 in the Offering and McMillan LLP is the legal advisor to the Underwriters in the Offering.

The Offering is subject to certain conditions including receipt of all regulatory approvals, including the acceptance of the TSX-V, and satisfaction of all conditions for the completion of the Transaction.


About Rio2

Rio2 is building a multi-asset, multi-jurisdiction, precious metals company focused in the Americas. With projects in Peru and Nicaragua, Rio2 will continue pursuing additional strategic acquisitions to compile an attractive portfolio of precious metals assets where it can deploy its operational excellence and responsible mining practices to create value for its shareholders. Rio2 has assembled a highly experienced executive team to generate significant shareholder value, with proven technical skills in the development and operations of mines and capital markets experience. Through its strategy of acquiring precious metals assets at exploration, development, and operating stages, the executive team will grow Rio2 and create long-term shareholder value through the development of high-margin, strong free-cash-flowing mining operations.



For more information about Rio2, please contact:

Alexander Black, President and Chief Executive Officer
alexb@rio2mining.com
416.570.3155<



Cautionary Statement on Forward-Looking Information

Certain information set forth in this news release contains “forward-looking statements”, and “forward-looking information under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements, which include expectations about the timing and completion of the Transaction and the Offering, the use of proceeds from the Offering, the satisfaction of the Escrow Release Conditions and management’s expectations with respect to the Offering and the Transaction, and are based on Rio2’s current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by the use of conditional or future tenses or by the use of such words such as “will”, “expects”, “may”, “should”, “estimates”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions, including variations thereof and negative forms. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Rio2’s actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: risks and uncertainties relating to the completion of the Transaction and the Offering as described herein, and management’s ability to anticipate and manage the foregoing factors and risks. There can be no assurance that forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Rio2 undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. Rio2 disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by securities legislation.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.