RIO2 Limited

2021 Rio2's ESG Report

Published on December 10, 2022

Rio2 is a mining company with a focus on development and mining operations with a team that has proven technical skills as well as successful capital markets track record. Rio2 is focused on taking its Fenix Gold Project in Chile to production in the shortest possible timeframe based on a staged development strategy. Rio2 and its wholly owned subsidiary, Fenix Gold Limitada, are companies with the highest environmental standards and responsibility with the firm conviction that it is possible to develop mining projects that respect the three axes (Social, Environment, and Economics) of sustainable development. As related companies, we reaffirm our commitment to apply environmental standards beyond those that are mandated by regulators, seeking to protect and preserve the environment of the territories that we operate in.

Disclaimer and Forward Looking Statements

Company Profile

Organizational Profile

Name

RIO2 Limited

Describe nature of activities, brands, products and services

Rio2 is a mining company with a focus on
development and mining operations with a
team that has proven technical skills as well as
successful capital markets track record.

Rio2 is focused on taking its Fenix Gold Project
in Chile to production in the shortest possible
timeframe based on a staged development
strategy.

Rio2 and its wholly owned subsidiary, Fenix
Gold Limitada, are companies with the highest
environmental standards and responsibility
with the firm conviction that it is possible to
develop mining projects that respect the three
axes (Social, Environment, and Economics) of
sustainable development.

As related companies, we reaffirm our
commitment to apply environmental standards
beyond those that are mandated by regulators,
seeking to protect and preserve the
environment of the territories that we operate
in.

Link to Corporate Website

https://www.rio2.com/

Industry Classification

NAICS:
21222 Gold and silver ore mining

Market Capitalization

$0-$100Million USD

Type of Operations

Exclusively non-producing operations

Company Headquarters

Vancouver, Canada

ESG Accountability

Role and Name of highest authority within company for Environment, Social and Governance strategy, programs and performance

Alex Black, Chairman of the Board (President &
CEO in 2021)

ESG Reporting Period

Unless otherwise noted, all data contained in this report covers the following period

From

2021-01-01

2021-12-31

Geographic Scope of Report

Unless otherwise noted, the data in this report covers ESG matters related to the following locations of operations

Chile

Identify notable exclusions, and reference any existing or planned reports that do or will address these (e.g, assets recently divested or acquired, non-managed joint ventures, specific exploration activities, recently closed sites, etc.)

There are no geographic or operational
exclusions in this report.

Fragile and Conflict-Affected Situations

Identify all of the entity's countries of operations that align with the World Bank's list of "Fragile and Conflict-Affected Situations"

None

Business Operations Scope of Report

This report applies to all company operations.

Mineral Resource Types in Scope

Which of the following mineral resource types are covered by this report

• Inferred
• Indicated
• Measured

Mineral Reserve Types in Scope

Which of the following mineral reserve types are covered by this report

• Proven
• Probable

Currency

Unless otherwise noted, all financial figures referenced in this report are in the following currency

USD

Audit Status

Identify the degree to which any inputs of the report are third-party checked

Self-Declared

Organizational Profile

Provide a list of externally-developed economic, environmental and social charters, principles, or other initiatives to which the organization subscribes, or which it endorses, e.g., GRI, UN Global Compact

This is the foundational report for Rio2 Limited.
In this report we are aligning with the following
ESG standards:
• CDP - Carbon Disclosure Project
• GRI - Global Reporting Initiative
• GRI Comprehensive - Global Reporting
Initiative - Comprehensive
• GRI Core - Global Reporting Initiative - Lite
• GRI MM Supplement (all including
supplements)
• Global Reporting Initiative - Mining and
Metals Supplement
• ICMM - The International Council on
Mining and Metals
• ISS - ISS ESG Governance Quality Score
• ONYEN - Institutional and Investor
Questions
• PRI - Principles of Responsible Investing -
UN Funded
• SASB - Sustainability Accounting Standards
Board
• SASB Modified - Sustainability Accounting
Standards Board - Modified (core and
comprehensive)
• UGC - UN Global Compact

Strategy

Provide a statement from the most senior decision-maker of the organization (i.e., CEO, chair, or equivalent senior position) about the relevance of sustainability to the organization and its strategy for addressing sustainability (CEO's message for this report)

We are focused on carrying out mining
activities responsibly and respectfully. We have
made our commitment to the environment and
community engagement an integral part of our
strategy.

Alex Black, President & CEO

2021 Sustainability Report Chairman Letter

Provide a description of key impacts, risks, and opportunities,

Among the most important risks for the Fenix,
Gold Project are physical risks derived from
climate change including water shortages for
processes and projects, and damage to
infrastructure or operational delays due to
extreme weather events.

Please see attached for additional information
on potential risks and a description of our risk
management approach.

Rio2 Limited Risk Management 2021

Ethics and Integrity

Provide a description of the organization’s values, principles, standards, and norms of behaviour

Rio2 Limited and its subsidiaries are committed
to conducting business with integrity in
accordance with the highest ethical and moral
standards and in compliance with all applicable
laws, rules, and regulations. The Company has
issued a Code of Business Conduct and Ethics
to promote: honest and ethical conduct,
including the ethical handling of actual or
apparent conflicts of interest between personal
and professional relationships; avoidance of
conflicts of interest, including disclosure to an
appropriate person of any material transaction
or relationship that reasonably could be
expected to give rise to such a conflict;
confidentiality of corporate information;
protection and proper use of corporate assets
and opportunities; compliance with applicable
governmental laws, rules, and regulations; the
prompt internal reporting of any violations of
this Code to an appropriate person or person
identified in this Code; and accountability for
adherence to this Code.

Rio2 Limited Code of Business Conduct and
Ethics

Material Topics

Governance of Material Topics

Describe the process followed to determine its material topics, including

i. How has the organization identified actual and potential, negative and positive impacts on the economy, environment, and people, including impacts on their human rights, across its activities and business relationships; provide details

• Environmental impact assessment
• Social impact assessment
• Civil society organizations

ii. How has the organization prioritized the impacts for reporting based on their significance

Materiality has been determined using
management's experience in mine project
development, and from information obtained
from various external consultancy firms at the
request of the Company while producing the
Environmental Impact Study for the Fenix Gold
Project, and public sources.

Specify the stakeholders and experts whose views have informed the process of determining its material topics and provide details

• Civil society organizations
• Governments
• Local communities
• Shareholders and other capital providers

List the organization's material topics

Environmental Assessment

In 2021 Rio2 was focused on filing the EIA
(Environmental Impact Assessment) for the
Fenix Gold Project and did not undertake a
formal assessment of its material topics. The
Company will undertake such an assessment
when reasonable in relation to its stage of
development.

List the organization's non-material topics

• Economic Performance
• Market Presence
• Indirect Economic Impacts
• Procurement Practices
• Materials
• Emissions
• Effluents and Waste
• Products and Services
• Transport
• Overall environmental
• Supplier
• Employment
• Labor/Management Relations
• Occupational Health and Safety
• Training and Education
• Diversity and Equal Opportunity
• Equal Remuneration for Women and Men
• Supplier Assessment for Labor Practices
• Labor Practices
• Grievance Mechanisms
• Human Rights Investment
• Non-discrimination
• Freedom of Association and Collective
Bargaining
• Child Labor
• Forced or Compulsory Labor
• Security Practices
• Supplier Human Rights Assessment
• Human Rights Grievance Mechanisms
• Local Communities
• Public Policy
• Anti-competitive Behavior
• Supplier Assessment for Impacts on Society
• Grievance Mechanisms for Impacts on
Society
• Emergency Preparedness
• Artisanal and Small-scale mining
• Resettlement
• Closure Planning
• Customer Health and Safety
• Product and Service Labeling
• Marketing
• Communications
• Customer Privacy
• Materials Stewardship

Provide reason for considering such topics not material, provide details

Other, please specify

Rio2 Limited is currently in the process of
developing the Fenix Gold Project in Chile. In
2021, there was no production and limited
construction activity in the Project.

Report changes to the list of material topics compared to the previous reporting period

The Company did not report material topics in
2020 hence comparison between periods is not
possible.

Environment

Compliance

a. Report fines and non-monetary sanctions for non-compliance with environmental laws and/or regulations in terms of

i. Total monetary value of significant fines

ii. Total number of non-monetary sanctions

iii. Cases brought through dispute resolution mechanisms

b. If the organization is in compliance with environmental laws and/or regulations, a brief statement if this fact is sufficient

Rio2 is in compliance with all environmental
laws and regulations pertaining to the Fenix
Gold Project in Chile.

Greenhouse Gas Emissions

Scope 1

For your operations, disclose the gross global Scope1 greenhouse gas (GHG) emissions to the atmosphere of the seven GHGs covered under the Kyoto Protocol (tonne CO₂-e)

Carbon dioxide (CO₂) (tonne CO₂-e)

71.568

Methane (CH₄) (tonne CO₂-e)

0.000

Nitrous oxide (N₂O) (tonne CO₂-e)

0.000

Hydrofluorocarbon-23 (CHF₃) (tonne CO₂-e)

0.000

Hydrofluorocarbon-32 (CH₂F₂) (tonne CO₂-e)

0.000

Sulphur hexafluoride (SF₆) (tonne CO₂-e)

0.000

Nitrogen trifluoride (NF₃) (tonne CO₂-e)

0.000

Perfluoromethane (CF₄) (tonne CO₂-e)

0.000

Perfluoroethane (C₂F₆) (tonne CO₂-e)

0.000

Perfluorobutane (C₄F₁₀) (tonne CO₂-e)

0.000

Perfluorohexane (C₆F₁₄) (tonne CO₂-e)

0.000

The total amount of gross global Scope 1 GHG emissions (CO₂-e) (tonne)

71.568

GHG emissions for the 2021 ESG Scorecard are
calculated based on estimated fuel and energy
consumption. EPA conversion factors were
utilized to calculate Scope 1 GHG emissions
(CO₂-e) (tonne).

The percentage of its gross global Scope 1 GHG emissions that are covered under an emissions-limiting regulation or program that is intended to directly limit or reduce emissions, such as cap-and-trade schemes, carbon tax/fee systems, and other emissions control (e.g., command-and-control approach) and permit-based mechanisms

0.0000%

In 2021, Chile did not implement an emissions-
limiting regulation or program.

The entity shall discuss its long-term and short-term strategy or plan to manage its Scope 1 greenhouse gas (GHG) emissions

Rio2 will develop long and short term strategies
for Scope 1 emissions during the construction
stage and in advance of the operations stage of
the Fenix Gold Project.

Intensity Ratio

The total amount of gross global Scope 1 GHG emissions (CO₂-e) (tonne)

71.568

Carbon Offset

Credits

How much CO₂ (metric tonnes) offset credits were purchased?

0.000

Air Emissions

Report emissions of air pollutants that are released into the atmosphere

Emissions of carbon monoxide, reported as CO (tonne)

0.000

Rio2 Limited will begin its air emissions
monitoring program after the approval of its
Environmental Impact Assessment by
government authorities as it enters the
construction phase of the Fenix Project.

Emissions of oxides of nitrogen (NOx), reported as NOx (tonne)

0.000

Emissions of oxides of sulphur (SOx), reported as SOx (tonne)

0.000

Emissions of Particulate Matter 10 micrometres or less in diameter (PM₁₀), reported as PM₁₀ (tonne)

0.000

Emissions of lead and lead compounds, reported as Pb (tonne)

0.000

Emissions of mercury and mercury compounds, reported as Hg (tonne)

0.000

Emissions of non-methane Volatile Organic Compounds (VOCs) (tonne)

0.000

Energy Management

Total energy consumed in aggregate, in gigajoules (GJ) (hydrocarbons and electricity) including the fuel types used (e.g., biomass, hydro-electric power or bioenergy)

1,534.000

Percentage energy consumed that was supplied by grid electricity

31.8774%

Percentage of energy consumed that is renewable energy

31.8774%

Water

Efficiency

Proportion of water reused and recycled by the site to reduce the overall consumptive water demand

3.3708%

Water Management

Disclose the amount of water that was withdrawn from freshwater sources (in thousands of cubic meters)

1.720

Volume extracted from the Can Can well.

Disclose the freshwater withdrawn in locations with High or Extremely High Baseline Water Stress as a percentage of the total water withdrawn

50.0000%

The Chilean province of Copiapo was declared
a water scarcity zone during six out of the
twelve months reported. Rio2 is using fresh
water while developing its Fenix Gold Project
but plans to operate the Fenix Gold mine using
treated water.

Disclose water withdrawn in locations with High or Extremely High Baseline Water Stress (in thousands of cubic meters)

0.860

Disclose freshwater consumed in locations with High or Extremely High Baseline Water Stress as a percentage of the total water consumed

48.3146%

Disclose the amount of water that was consumed in its operations (in thousands of cubic meters)

1.780

The amount of water consumed in the project
was 68.56 megaliters extracted from the Can
Can well (natural source) and 0.06 megaliters of
treated residual water acquired from the
Nueva Atacama Water Treatment Plant.

Total water consumed in locations with high or extremely high baseline water stress (in thousands of cubic meters)

0.860

Was your organization subject to any fines, enforcement orders, and/or other penalties for water-related regulatory violations

Total number of instances of non-compliance, including violations of a technology-based standard and exceedances of quality-based standards

Water and Effluents

Water Consumption

Report the total water consumption from all areas in megaliters

1.780

Report the total water consumption from all areas with water stress in megaliters

0.860

Waste Management

Total amount of tailings waste generated from mining activities by the entity during the reporting period (tonne)

The Fenix Gold Project is currently in
development and does not use substances of
concern. In compliance with corporate
standards and (international standards),
mitigation plans will be developed to ensure the
safe handling of hazardous substances once
operations begin. Moreover, as per its design,
the Fenix Gold Project will not generate tailings
waste.

Tailings Storage Facilities Management

Does your company manage Tailings Storage Facilities

Innovation

Spending on Research, Development, and Technologies for waste management compliance and improvement

Describe nature of spending on Research, Development and Technologies for waste management compliance and improvement

In 2021, Rio2 focused on the preparation of an
environmental impact assessment for the Fenix
Gold Project, and, therefore, waste
management was not a material issue for
operations. Once the Fenix Gold Project enters
its construction phase, a formal plan will be
developed.

Currently, we have appropriate on-site
processes as required by Chilean legislation.

Biodiversity

Management Plan

List the environmental and biodiversity management plan(s) implemented at active sites

In 2021, we continued to develop our Fenix
Gold Project management plan for biodiversity.
This Management Plan is currently being
evaluated by the competent Chilean authority
as part of the evaluation process of the
Environmental Impact Study (EIA). The plan will
be implemented once the environmental
certification is obtained.

During the early improvement works of the
Lazaro camp, the process of controlled
disturbance (chasing away) was carried out for
low-mobility fauna (reptiles). This voluntary
activity was carried out as mandated by the
core values of Rio2 with regards to
conservation and care of biodiversity.

1.1 Mine lifecycle stages to which the plan(s) apply

• Exploration and appraisal
• Site development
• Production
• During closure
• Decommissioning

1.2 The topics addressed by the plan(s)

• Not applicable
• Ecological and biodiversity impacts
• Waste generation
• Noise impacts
• Emissions to air
• Discharges to water
• Natural resource consumption

1.3 The underlying references for its plan(s), including whether they are codes, guidelines, standards, or regulations; whether they were developed by the entity, an industry organization, a third-party organization (e.g., a non-governmental organization, a governmental agency, or some combination of these groups)

The Biodiversity Plan currently under review as
part of the EIA has been developed by
specialized consultants. The plan and the
information included have been prepared in
compliance with current regulations, national
guidelines, and international standards.

In addition, we have proposed voluntary
commitments based on project design and
corporate guidelines.

Impacts

Does access to the site involve traversing a protected area

This disclosure includes all relevant national
categories and designations as well as
internationally recognized protected areas, i.e.
areas designated under the World
Conservation Union (IUCN) designation I-IV,
UNESCO Natural World Heritage Sites,
UNESCO Man, and the Biosphere Reserves,
and wetlands designated under the Convention
on Wetlands of International Importance (the
Ramsar Convention).

Do any of the entities concessions share a watershed with a protected area

Yes

Provide context and description of site access involving traversing protected areas, and/or watersheds shared with a protected area. Include reference to measures in place to assure access, any proactive programs to support the biodiversity of the protected area, and any formal complaints or compliance issues and related steps to resolve

Neither the Fenix Gold Project nor any of its
facilities cross a protected area.

The Fenix Gold Project is located 3.6 km from
the boundary of the Nevado Tres Cruces
National Park and the Laguna Santa Rosa
Ramsar Site. (See map attached.)

A small area (0.82 km2) of the upper part of the
Fenix Project is located in the pit sub-basin,
which is a contributor basin to the Maricunga
National Park and Salar. However, according to
the modeling and environmental impact
assessment, the potential effects on the
protected area are not significant. This
negligible impact is associated with the possible
decrease in recharge due to specific Project
works. The possible reduction in recharge is
estimated at 0.20 L/s, corresponding to 2.11%
of the total recharge in the sub-basin (9.5 L/s).
At the basin level, the Rajos sub-basin belongs
to the Salar de Maricunga basin, in which water
balances have been carried out by various
sources, estimating the recharge of the Salar de
Maricunga between approximately 1,200 L/s
and 1,600 L/s, for which the possible decrease
in recharge due to the Project works located in
the Rajos sub-basin represents between
0.013% and 0.017%, at the basin level.
Therefore, no risk of reduced water levels is
expected, which qualifies as a non-significant
impact.

Fenix Gold Pit Sub-Basin Catchment

Percentage of proved reserves in sites with protected conservation status or in areas of endangered species habitat

0.0000%

Percentage of probable reserves in sites with protected conservation status or in areas of endangered species habitat

0.0000%

Percentage of inferred, indicated and measured reserves in sites with protected conservation status or in areas of endangered species habitat

0.0000%

Social

Employment

Scale of the Organization

Report the total number of operations

i. Report the total number of direct employees worldwide (exclude contractors)

ii. Report the total number of contract employees worldwide

108

iii. Total number of employees worldwide (include contractors)

173

iv. Total number of female employees and contractors worldwide

Female employees and contractors as percentage of total employees and contractors

20.2312%

v. Total number of male employees and contractors worldwide

138

Male employees and contractors as percentage of total employees and contractors

79.7688%

vi. Total number of non-binary employees and contractors worldwide

Non-binary employees and contractors as percentage of total employees and contractors

0.0000%

Employee Information

Report the total number of direct employees by employment type (permanent and temporary), by gender

Total number of permanent employees

Total number of permanent employees - female

Total number of permanent employees - male

Total number of permanent employees - Non-binary

Total number of temporary employees

Total number of temporary employees - female

Total number of temporary employees - male

Total number of temporary employees - Non-binary

Report the total number of contractors by employment type (permanent and temporary), by gender

108

Total number of permanent contractors

Total number of permanent contractors - female

Total number of permanent contractors - male

Total number of permanent contractors - Non-binary

Total number of permanent contractors - Gender not disclosed

Total number of temporary contractors

108

Total number of temporary contractors - female

Total number of temporary contractors - male

Total number of temporary contractors - Non-binary

Total number of temporary contractors - Gender not disclosed

Report the total number of employees by employment type (full-time and part-time), by gender

Total number of full-time employees - female

Total number of part-time employees - female

Total number of full-time employees - male

Total number of part-time employees - male

Total number of full-time employees - Non-binary

Total number of part-time employees - Non-binary

Report the total number of contractors by employment type (full-time and part-time), by gender

108

Total number of full-time contractors - female

Total number of part-time contractors - female

Total number of full-time contractors - male

Total number of part-time contractors - male

Total number of full-time contractors - Non-binary

Total number of part-time contractors - Non-binary

Turnover

Report the total number and rate of employee turnover during the reporting period, by age group, and gender

All Employees

Total number of turnover (the number that left during the period)

Rate of turnover

6.9565%

Female employees

Total number of turnover (the number of females that left during the period)

Rate of turnover, females

4.0816%

Male employees

Total number of turnover (the number of males that left during the period)

Rate of turnover, males

7.7348%

Non-binary employees

Total number of turnover (the number non-binary that left during the period)

Rate of turnover, non-binary

Does Not Apply

Turnover & Age Breakdown

Employees aged 30 years old and under

Total number of turnover (the number that left during the period)

As percent of total employees

2.3121%

Rate of turnover

0.0000%

Employees aged between 30 and 50 years old

Total number of turnover (the number that left during the period)

As percent of total employees

84.3931%

Rate of turnover

7.8212%

Employees over 50 years old

Total number of turnover (the number that left during the period)

As percent of total employees

13.2948%

Rate of turnover

4.3478%

Identify types of employees captured in the turnover rate calculations

Direct-hire temporary workers (temporary
workers who are on the company payroll)

Average age of employees

Diversity and Equal Opportunity

Report the percentage of employees per employee category in each of the following diversity categories

Board of Directors

Total Board of Directors

Percent Male

100.0000%

Percent Female

0.0000%

Percent Non-Binary

0.0000%

Percent under 30 years of age

0.0000%

Percent between 30 and 50 years of age

0.0000%

Percent over 50 years of age

100.0000%

Senior Management

Total Senior Managers

Percent Male

71.4286%

Percent Female

28.5714%

Percent Non-Binary

0.0000%

Percent under 30 years of age

0.0000%

Percent between 30 and 50 years of age

14.2857%

Percent over 50 years of age

85.7143%

Salaried (excluding Senior Management)

Total Salaried (excluding Senior Management)

Percent Male

65.0000%

Percent Female

35.0000%

Percent Non-Binary

0.0000%

Percent under 30 years of age

5.0000%

Percent between 30 and 50 years of age

50.0000%

Percent over 50 years of age

45.0000%

Technical Employees (skilled hourly)

Total Technical Employees

Percent Male

56.5217%

Percent Female

43.4783%

Percent Non-Binary

0.0000%

Percent under 30 years of age

8.6957%

Percent between 30 and 50 years of age

78.2609%

Percent over 50 years of age

13.0435%

Production Employees (unskilled hourly)

Total Production Employees

Percent Male

100.0000%

Percent Female

0.0000%

Percent Non-Binary

0.0000%

Percent under 30 years of age

6.6667%

Percent between 30 and 50 years of age

93.3333%

Percent over 50 years of age

0.0000%

Contractors:

Total Contractors

108

Percent Male

85.1852%

Percent Female

14.8148%

Percent Non-Binary

0.0000%

Percent under 30 years of age

0.0000%

Percent between 30 and 50 years of age

95.3704%

Percent over 50 years of age

4.6296%

Labour Relations

Collective Bargaining Agreements

Percentage of total direct employees covered by collective bargaining agreements

0.0000%

Rio2 Limited does not have Collective
Bargaining Agreements.

Notice Periods

Minimum number of weeks’ notice typically provided to employees and their representatives prior to the implementation of significant operational changes that could substantially affect them

6 weeks

Occupational Health and Safety

Work-related Injuries

Injuries - For all employees

i. Number of fatalities as a result of work-related injury

i. Rate of fatalities resulting from work-related injury. Note: calculating per 200,000 hours worked

0.000

ii. Number of high-consequence work-related injuries (excluding fatalities)

ii. Rate of high-consequence work-related injuries (excluding fatalities)

0.000

iii. Number of recordable work-related injuries

iii. Rate of recordable work-related injuries

0.000

iv. Main types of work-related injury, e.g., confined space, trips, falls, etc.

No work-related injuries were recorded for the
2021 calendar year. This applies to employees
only.

v. Number of hours worked

66,749

Lost Time Injuries (LTIs)

Lost Time Injuries Rate (LTIR)

0.000

In 2021, Rio2 Limited had a 0.00 fatality rate,
0.00 work-related incident rate, and a 0.00 Lost
Time Incident rate.

Injuries - workers who are not employees but whose work and/or workplace is controlled by the organization

i. Number of fatalities as a result of work-related injury

i. Rate of fatalities resulting from work-related injury. Note: calculating per 200,000 hours

0.000

ii. Number of high-consequence work-related injuries (excluding fatalities)

ii. Rate of high-consequence work-related injuries (excluding fatalities)

0.000

iii. Number of recordable work-related injuries

iii. Rate of recordable work-related injuries

0.000

iv. Main types of work-related injury, e.g., confined space, trips, falls, etc.

No work-related injuries were recorded for the
2021 calendar year. This applies to contractors.

v. Number of hours worked

21,101

Lost Time Injuries (LTIs)

Lost Time Injuries Rate (LTIR)

0.000

In 2021, Rio2 Limited had a 0.00 fatality rate,
0.00 work-related incident rate, and a 0.00 Lost
Time Incident rate.

Combined (Employees and non-employees, but controlled by the organization):

Total number of all work-related injuries

Rate of work-related injuries

0.000

Total Lost Time Injuries (LTIs)

Lost Time Injuries Rate (LTIR)

0.000

Report the work-related hazards that pose a risk of high-consequence injury, including

i. How have these hazards been determined

Rio2 utilizes the OSHAS 18001 methodology to
identify high-potential hazards.

For this purpose, Rio2 applies the Iper matrix
(HIRA, Hazard Identification, and Risk
Assessment in English). This matrix is a
management tool that can be used to identify
hazards and assess risks associated with the
processes of any organization.

This methodology includes:
• On-site registration
• Induction training
• Monitoring and evaluation

ii. Which of these hazards have caused or contributed to high-consequence injuries during the reporting period

In this reporting period, Rio2 did not suffer any
high-consequence injuries.

iii. Actions taken or underway to eliminate these hazards and minimize risks using the hierarchy of controls

For 2021 the actions taken according to the
Hierarchy of Controls were:

-Implementation of Administrative controls
-Delivery of Personal Protection Equipment
-Safe Driving in High Mountains Training; and
-Emergency Preparedness Training.

Report on actions taken or underway to eliminate other work-related hazards and minimize risks using the hierarchy of controls

In order to eliminate hazards and minimize
risks during 2021, Rio2 complied with Chilean
Occupational Health and Safety Standards and
Regulations (Chile's Occupational Safety and
Health Law No. 16744 regulates workplace
accidents and occupational diseases). The
Company also implemented plans, and
programs.

Please see attached for more details about
Rio2's health and safety regulations, programs,
and standards.

Rio2 Risk Prevention, Programs, and Standards 2021

Whether and, if so, why any workers have been excluded from this disclosure, including the types of worker excluded, e.g., short-term contractors

No worker has been excluded from this
disclosure.

Disclose any contextual information necessary to understand how the data have been compiled, i.e., any standards, methodologies, and assumptions used

Rio2 identifies and develops Health and Safety
procedures and protocols based on the
following:

a) Host government regulations on safety
b) Occupational health and risk prevention, and
c) The adequacy of safety standards in
accordance with our operations.

In addition, we hold daily mandatory safety
meetings with all personnel and contractors to
identify risks as operations and activities
change to meet project demands.

When necessary, we hire external consulting
services specialized in risk prevention.

Safety Training

Disclose the average number of training hours provided to its workforce for health, safety, and emergency management training

Average hours of health, safety, and emergency response training for (a) full-time/direct employees

Average hours of health, safety, and emergency response training for (b) contract employees

19.91

Security, Human Rights and Rights of Indigenous People

Identify the countries of operations within the World Bank's list of “Fragile and Conflict-Affected Situations”

None

Describe the nature of any social risks, for all operating countries, that could have a material risk to operations

Please see the attached document for a
description of social risks related the Fenix
Gold Project.

Fenix Gold Project Social Risks

Percentage of proved reserves that are located in or near areas of active conflict

0.0000%

The total amount of proved reserves

650,000

Percentage of probable reserves that are located in or near areas of active conflict

0.0000%

The total amount of probable reserves

722,000

Percentage of inferred, indicated and measured reserves that are located in or near areas of active conflict

0.0000%

Total amount of inferred, indicated and/or measured reserves

6,733,000

Percentage of proved reserves that are located in or near areas that are considered to be indigenous peoples’ land

0.0000%

There are no percentage of proved reserves
that are located in or near areas that are
considered to be Indigenous peoples’ land.

The total amount of proved reserves

649,999

Percentage of probable reserves that are located in or near areas that are considered to be indigenous peoples’ land

0.0000%

There are no percentage of probable reserves
that are located in or near areas that are
considered to be Indigenous peoples’ land.

The total amount of probable reserves

722,000

Percentage of inferred, indicated and measured reserves that are located in or near areas that are considered to be indigenous peoples’ land

0.0000%

There are no percentage of inferred, indicated
and measured reserves that are located in or
near areas that are considered to be Indigenous
peoples’ land.

Total amount of inferred, indicated and measured reserves

6,733,000

Describe due diligence practices and procedures with respect to indigenous rights of communities in which it operates or intends to operate

Please see attached disclosure.

Colla Communities Transhumance Routes

Rio2's DD Practices Procedures Indigenous Communities

Discuss practices and list procedures while operating in areas of conflict

Rio2 does not operate in areas of conflict.

Community Relations

Artisanal and Small-Scale Mining

Number of company operating sites where artisanal and small-scale mining (ASM) takes place on, or adjacent to, the site (not controlled by company/unauthorized)

There are no operating sites where artisanal
and small-scale mining (ASM) takes place on, or
adjacent to, the Fenix Gold Project.

Programs

Report on community relations programs, objectives and achievements in the past 3 years

See attached disclosure.

In 2021, we have continued our engagement
process with diverse stakeholders of the Fenix
Gold Project with the following objectives:

1. To build collaboration ties and generate the
appropriate social conditions and social license
to guarantee the project's continuity
2. Strengthen the image and reputation of the
company with stakeholder groups in the
project's area of influence
3. Ensure the proper implementation of social
guidelines in accordance with the company's
strategy and maintain the project's social and
sustainability viability

In addition in 2021 we invested a total of
$109,000 USD in social investments in
community health, education, economic
development and internet connectivity.

Fenix Gold Project Community Relations Programs 2021

Discuss the processes, procedures, and practices to manage risks and opportunities associated with the rights and interests of communities in areas where it conducts business

Rio2 has processes, procedures, and practices
to manage risks and opportunities associated
with the rights and interests of the
communities in the areas where we do business
including:

• Evaluation of Actors related to the Project
(EIA )
• Program of Attention to Observations
• Principles of Community Relations and Social
Management
• Policy of contribution to the Communities
• Procedure for contracting Suppliers of
Indigenous Communities
• Register of contributions to Communities
• Register of meetings with institutions
• Social Management Plan
• Gender Inclusion Plan
• Vulnerable People Inclusion Plan

Governance

Climate Change

Oversight

Is there board-level oversight of climate-related issues within your organization

Not currently, but we plan to do so within the
next two years

Responsibility

Provide the highest management-level position(s) or committee(s) with responsibility for climate-related issues

Chief Executive Officer (CEO)

Nature of primary responsibility

Both assessing and managing climate-related
risks and opportunities

Reporting

Frequency of reporting to the board on climate-related issues

Not reported to the board

Incentives

Do you provide incentives for the management of climate-related issues, including the attainment of targets

No, not currently but we plan to introduce
them in the next two years

Risk and Opportunity Management

Does your organization have a process for identifying, assessing, and responding to climate-related risks and opportunities

Yes

Risk Assessments

Have you identified any inherent climate-related risks with the potential to have a substantive financial or strategic impact on your business

Yes

Provide details of identified risks in your direct operations with the potential to have a substantive financial or strategic impact on your business, and your response to those risks

Risk 1

Where in the value chain does the risk driver occur

Direct operations

Risk type and primary driver

Emerging regulation - Carbon pricing
mechanisms

Time horizon of risk

Medium-term

Likelihood of impact

About as likely as not

Magnitude of impact

Unknown

Potential impact financial figure and explanation

Currently undefined

Primary potential financial impact

Increased indirect (operating) costs

Cost of response to risk and description

Currently undefined

Risk 2

Where in the value chain does the risk driver occur

Direct operations

Risk type and primary driver

Acute Physical - Increased severity and
frequency of extreme weather events such as
cyclones and floods

Time horizon of risk

Medium-term

Likelihood of impact

More likely than not

Magnitude of impact

Medium-low

Potential impact financial figure and explanation

Potential operations stoppage due to loss of
access to site from mudslide event. Rio2 has
calculated the stoppage to last between 2 to 4
weeks while access is reestablished.

Primary potential financial impact

Increased direct costs

Cost of response to risk and description

Unknown, potentially loss of one month's
production, and loss of associated revenue.

Opportunity Assessments

Have you identified any climate-related opportunities with the potential to have a substantive financial or strategic impact on your business

Yes

Provide details of opportunities identified with the potential to have a substantive financial or strategic impact on your business

Opportunity 1

Where in the value chain does the opportunity driver occur

Direct operations

Opportunity type

Energy source: Use of new technologies

Opportunity time horizon

Medium-term

Opportunity likelihood

Likely

Magnitude of impact

Low

Potential impact financial figure and explanation

Installation of solar energy for operation and
camp once operations are established.

Primary potential financial impact driver

Reduced direct costs

Cost and strategy to realize opportunity and explanation of cost calculation

Requires a trade-off study, cost benefi t and
return on investment timeframe.

Opportunity 2

Where in the value chain does the opportunity driver occur

Direct operations

Opportunity type

Resource efficiency : Use of more efficient
modes of transport

Opportunity time horizon

Long-term

Opportunity likelihood

More likely than not

Magnitude of impact

Medium-low

Potential impact financial figure and explanation

Replace diesel-powered vehicles with electric
powered vehicles for some stages of the
operation.

Primary potential financial impact driver

Reduced direct costs

Cost and strategy to realize opportunity and explanation of cost calculation

Requires technology development for high-
altitude cold-environment electric-powered
vehicles, trade-off study.

Strategy

Have climate-related risks and opportunities influenced your organization’s strategy and/or financial planning

Yes

Yes, please refer to the disclosure above for a
description of our strategy and financial
planning.

Water Management

Quality and Quantity Dependency

Rate the importance (current and future) of freshwater quality and quantity to the success of your business

Direct use importance rating

Neutral

Indirect use importance rating

Important

Rate the importance (current and future) of sufficient quantity of recycled, brackish and/or produced water for the success of your business

Direct use importance rating

Vital

Indirect use importance rating

Important

Risk Assessments

Does your organization undertake a water-related risk assessment

Yes, water-related risks are assessed

Select the options that best describe your procedures for identifying and assessing water-related risks

i. Coverage

Partial

ii. Risk Assessment Procedure

Water risks are assessed as a standalone issue

iii. Frequency of Risk Assessment

Annually

iv. How far into the future are risks considered

3 to 6 years

Have you identified any inherent water-related risks with the potential to have a substantive financial or strategic impact on operations

Yes, only within our direct operations

Provide details of identified risks in your direct operations with the potential to have a substantive financial or strategic impact on your business, and your response to those risks

Risk 1

Type of risk

Regulatory

Primary risk driver

Physical - Increased water stress

Primary potential impact

Increased production costs

Risk timeframe

More than 6 years

Magnitude of potential impact

Medium

Likelihood of potential impact

Unlikely

Potential impact financial figure and explanation

Increased water costs, and the need to use
desalinated water.

Primary response

Engage with regulators/policymakers

Cost of response and description of response

Unknown

Risk 2

Type of risk

Other, please specify

Opposition to use of water in Nueva Atacama

Primary risk driver

Physical - Increased water scarcity

Primary potential impact

Increased operating costs

Risk timeframe

More than 6 years

Magnitude of potential impact

Medium

Likelihood of potential impact

Unlikely

Potential impact financial figure and explanation

Increased water costs, and the need to use
desalinated water.

Primary response

Engage with local communities

Cost of response and description of response

Unknown

Opportunity Assessments

Have you identified any water-related opportunities with the potential to have a substantive financial or strategic impact on your business

Yes, we have identified opportunities but are
unable to realize them

Responsibility

Provide the highest management-level position(s) or committee(s) with responsibility for water-related issues

Chief Executive Officer (CEO)

Policy

Does your organization have a documented water policy

Reporting

Frequency of reporting to the board on water-related issues

As important matters arise

Incentives

Do you provide incentives to C-suite employees or board members for the management of water-related issues

No, and we do not plan to introduce them in the
next two years

Strategy

Are water-related issues integrated into any aspects of your long-term strategic business plan

Yes, water-related issues are integrated

If water-related issues are integrated into any aspects of your long-term strategic business plan, please describe further

We are currently identifying alternative water
sources to enable project expansion,
environmentally approved continental water or
access to desalinated water via pipelines.

If water-related issues are integrated into any aspects of your long-term strategic business plan, identify the associated long-term time horizon

5-10 years

General Disclosure

Structure

a. Report the governance structure of the organization, including committees of the highest governance body, e.g., the Board of Directors, the Executives, the Board Environment Committee, Board Safety Committee, the Advisory Committee, etc.

Rio2’s Board of directors is responsible for the
strategic supervision and direction of
Management of Rio2 Limited. The Board is
composed of seven directors, each with a
specific and strategic level of expertise
beneficial to the business of the Company.

The CEO is appointed by the Board and tasked
with achieving the strategic objectives of the
Company and its operational priorities.

Committees

b. Report the committees responsible for decision-making on economic, environmental, and social topics, e.g., the Board of Directors, the Executives, the Board Environment Committee, Board Safety Committee, the Advisory Committee, etc.

The committees responsible for decision-
making on economic, environmental, and social
topics including the Corporate Governance and
Compensation Committee, the Audit
Committee, and the Health, Safety, and
Community Committee.

Please see links below for the Health, Safety,
and Community Charter, and the Audit
Committee Charter.

Health Safety and Community Charter

Audit Committee Charter

Responsibility

a. Has the organization appointed an executive-level position or positions with responsibility for economic, environmental, and social topics , e.g., is it part of the Governance structure of the company, the CFO or internal audit reporting to the Board

Yes

Reporting Structure

b. Report whether position holders report directly to the highest governance body or CEO

CEO and the Health and Safety Committee of
the Board of Directors.

Consultation Process

Report the processes for consultations between stakeholders and the highest governance body on economic, environmental and social topics, e.g., for most mining companies it would be the executives and operations and not the Board, and if delegated, explain how

Rio2's consultation processes are led by the
Social, Environmental, and Permitting teams
that report directly to the CEO. The results of
the consultation process are reported to the
Health, Safety, and Community Committee as
important matters arise.

Composition

Report the composition of the highest governance body and its committees by:

Number of executive members

Number of non-executive members

Number of independent members

Less than 3 years

3-6 years

6-9 years

More than 10 years

Lists of each individual’s other significant positions and commitments, and the nature of the commitments, e.g., other boards and executive positions

Two of our board directors hold significant
positions and commitments in other
organizations as follows:

Lead Director Klaus Zeitler (Chairman of the
Board of Rio2 Limited in 2021) is also the
Executive Chairman of Amerigo Resources Ltd.
and Director of Western Copper and Gold
Corporation.

The Chairman of Rio2's Audit Committee Ram
Ramachandran is also the CFO of Purepoint
Uranium Group Inc.

Number of Male governance body members

Number of Female governance body members

Number of members from under-represented social groups

Description of competencies relating to economic, environmental, and social topics

Please see attached disclosure.

Rio2 Board of Directors Composition

Rio2 Board Competencies

Description of stakeholder representation

Rio2 is a Canadian exploration and
development company. Its stakeholder
representation consists of employees and
workers who are not employees, trade union
service suppliers, local community suppliers
and services, and our shareholders and
providers of capital. For a description of our
ownership structure, please see the attached
file.

Rio2 Ownership Structure

Board Diversity

Do you have a diversity policy and if so, provide details, link to the policy or attach the file

Currently Rio2 does not have a Board Diversity
Policy

Non-Executive Director

Is the chair of the highest governance body also an executive officer in the organization

Conflicts of Interest

Report the processes for the highest governance body to ensure conflicts of interest are avoided and managed, e.g., list procedures

All Rio2 officers and managers maintain an
"open door" policy regarding questions of
business conduct regarding our Business
Conduct and Ethics Code and its applicability.
Employees are encouraged to be alert to any
work related activities that could be construed
as a violation of this Code. They have an
obligation to promptly report potential
violations orally, in writing, or, if preferred,
anonymously. In 2021, Rio2 began
designing an intranet platform that will provide
employees with an additional channel for
reporting of violations to the Company's Code
of Business Conduct and Ethics.

Report whether conflicts of interest are disclosed to stakeholders, including, as a minimum

Yes

i. Cross-board membership

Yes

ii. Cross-shareholding with suppliers and other stakeholders

Yes

iii. Existence of controlling shareholder

Yes

iv. Related third party disclosures

Yes

Transparency

Report the highest governance body’s and senior executives’ roles in the development, approval, and updating of the organization’s purpose, value or mission statements, strategies, policies, and goals related to economic, environmental, and social topics

In 2021 the Board met with Management seven
times to discuss strategy and goals for the
development of the Fenix Gold Project.
Financial, social, and environmental topics were
discussed.

Report on the measures taken to develop and enhance the highest governance body’s collective knowledge of economic, environmental, and social topics, e.g., board training

The Board did not receive training in 2021.

Report the actions taken in response to evaluation of the highest governance body’s performance with respect to governance of economic, environmental, and social topics, including, as a minimum, changes in membership and organizational practice, (response to external evaluations)

The Board did not receive training in 2021,
hence there were no resulting actions.

Report the highest governance body’s role in identifying and managing economic, environmental, and social topics and their impacts, risks, and opportunities – including its role in the implementation of due diligence processes, (committee roles)

HSE impacts are assessed and managed by the
HSC Board Committee as mandated by its
charter and the Company's Safety,
Occupational Health, Environment, and Social
Responsibility Policy.

Is stakeholder consultation used to support the highest governance body’s identification and management of economic, environmental, and social topics and their impacts, risks, and opportunities, and if delegated, explain how

Yes

Remuneration

Report how performance criteria in the remuneration policies relate to the highest governance body’s and senior executives’ objectives for economic, environmental, and social topics

The Compensation Committee reviews the
achievement of project specific goals included
in the Company’s plans such as: identifying
mineral prospects; executing successful drill
programs; advancing or completing scoping,
pre-feasibility, or feasibility studies; building
and maintaining social license through
community relationships and initiatives;
acquiring necessary permits, and successfully
advancing projects and/or initiatives that
accomplish the Company’s goals.

In addition, the Committee considers
management’s performance in unplanned
situations and their ability to manage projects
through complex political and social situations.

Finally, corporate objectives such as successful
capital raising (if applicable), peer
benchmarking and market performance are
considered.

How are stakeholders’ views sought and taken into account regarding remuneration

Company shareholders do not vote on
executive compensation at this time.

Ethics

Describe the management system and due diligence procedures for assessing and managing corruption and bribery risks internally and associated with business partners in its value chain

Rio2 has zero-tolerance for bribery and
corruption in all business dealings and
relationships, in all jurisdictions in which it
operates. Implementing and enforcing effective
systems to prevent bribery and corruption is
central to this approach. For this reason, Rio2
has adopted an Anti bribery and Anti-
Corruption Policy to avoid and prevent bribery
and corruption in all business dealings of, and
transactions undertaken by, the Corporation.

This Policy provides information and guidance
on how to recognize and deal with bribery and
corruption issues and provides guidelines and
establishes procedures to ensure that all those
working for, on behalf of, and with the
Corporation have a clear and consistent
understanding of how to avoid and prevent
bribery and corruption. This Policy applies to all
employees and consultants of Rio2 and its
subsidiaries.

Please refer to the link below to access Rio2's
Anti-Bribery and Anti-Corruption Policy.

Rio2 Anti-Bribery and Anti-Corruption Policy

Report net production from activities located in the countries with the 20 lowest rankings in Transparency International’s Corruption Perception Index (CPI) (Saleable tonne)

Anti-Corruption

Communication and Training

i) Total number of governance body members that have received training on anti-corruption, broken down by region

ii.) Total percentage of governance body members that have received training on anti-corruption, broken down by region

100.0000%

Total number and percentage of employees that have received training on anti-corruption, broken down by employee category and region

1a. Total number of employees that received training on anti-corruption

Total number of employees

1b. Total percentage of employees that received training on anti-corruption

92.3077%

2a. Total number of senior employees that received training on anti-corruption

Total number of senior employees

2b. Percentage of senior employees that received training on anti-corruption

100.0000%

3a. Total number of middle management employees have received training on anti-corruption

Total number of middle management employees

3b. Percentage of middle management employees have received training on anti-corruption

100.0000%

4a. Total number of technical employees that received training on anti-corruption

Total number of technical employees

4b. Percentage of technical employees that received training on anti-corruption

81.4815%

5a. Total number of production employees that received training on anti-corruption

Total number of production employees

5b. Percentage of production employees that received training on anti-corruption

100.0000%

6a. Total number of administrative employees that received training on anti-corruption

Total number of administrative employees

6b. Percentage of administrative employees that received training on anti-corruption

100.0000%

Tax

Describe the approach to stakeholder engagement and management of stakeholder concerns related to tax, including:

i. The approach to engagement with tax authorities

Rio2 retains third-party experts to advise on
tax related issues and ensure full compliance
with tax obligations.

ii. The approach to public policy advocacy on tax

Rio2 does not engage in public policy advocacy
on tax-related issues.

iii. The processes for collecting and considering the views and concerns of stakeholders, including external stakeholders

Rio2 does not engage in public policy advocacy
on tax-related issues.



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