Several mining stocks have been on an absolute tear over the past year, significantly outpacing broader equity markets. This outsized performance stems from multiple macro factors, which include:
- Persistent inflation and heightened geopolitical tensions have driven investors toward precious metals as protective hedges.
- Ongoing conflicts, including the Russia-Ukraine war, Israel-Hamas hostilities, and the trade war, have amplified uncertainty across global markets.
- Additional instability from cyber warfare, which has targeted critical infrastructure, has reinforced demand for safe-haven assets.
- Supply-side constraints have supported the valuations of mining stocks driven by environmental restrictions on new mine development.
- Industrial applications in consumer electronics and renewable energy infrastructure have fueled consumption growth.
- Technological improvements are boosting mining profitability as automation, artificial intelligence-driven exploration techniques, and sustainability initiatives have reduced operational costs while improving efficiency.
Investing in quality mining stocks diversifies your portfolio, which lowers overall risk. Here is one TSX mining stock that is well-positioned to deliver outsized gains over the next decade.
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Is RIO stock a good buy right now?
Valued at a market capitalization of $1 billion, Rio2 Limited (TSX:RIO) is a pre-revenue mining company that has seen its share price increase by over 200% in the past year.
Rio2 is engaged in the exploration, development, and mining of mineral properties in Canada, Peru, the Bahamas, and Chile. Its principal project holds 100% interests in the Fenix Gold Project, which covers an area of more than 16,000 hectares in Chile.
Rio2 Limited is positioned to capitalize on rising gold prices as it advances the construction of the flagship Fenix Gold Project in Chile’s prolific Maricunga Gold Belt.
The company is 11 months into a 14-month construction timeline, with gold production scheduled to commence in January 2026. This development timeline couldn’t be better aligned with gold prices trading near record highs above $4,000 per ounce.
Fenix project takes off
The Fenix project contains a substantial 4.8-million-ounce measured and indicated resource with an additional one million ounces of inferred material.
The asset also represents one of the world’s largest oxide gold deposits, allowing for simpler heap leach processing rather than expensive milling operations. The deposit features clean metallurgy with low copper content, achieving strong recovery rates of 75% and eliminating the need for crushing equipment.
Management’s staged development approach demonstrates disciplined capital allocation. Phase one begins with a 20,000-tonne-per-day processing capacity, targeting 65,000 ounces in the first year before ramping up to 120,000 ounces annually. This initial phase is fully permitted and financed, and the company has already placed mineral on the leach pad, expecting to begin circulating leach solution in November.
The real value-unlocking opportunity lies in phase two expansion to an 80,000-tonne daily throughput, which would transform Fenix into a 300,000-ounce-per-year producer for over 10 years.
This expansion depends on securing desalination water via pipeline from coastal facilities, with scoping studies due by year-end and a prefeasibility study expected in February 2026.
Rio2’s seasoned management team brings proven mine building and operating experience from successfully developing two projects in Peru between 2009 and 2015.
Is the TSX mining stock undervalued?
Analysts tracking RIO stock forecast revenue to increase from $297 million in 2026 to $468 million in 2027. It is forecast to report an adjusted earnings per share of $0.49 in 2027, compared to a loss per share of $0.03 in 2025.
The miner is also forecast to report a free cash flow (FCF) of $171 million in 2027. If the TSX mining stock trades at 10 times forward FCF, which is reasonable, it should gain 70% over the next 12 months.
