HCH.V · 2026-06-30

Hot Chili Quarterly Report - Period Ending 30 June 2026

Financials

Hot Chili Quarterly Report - Period Ending 30 June 2026

PERTH, Australia, July 30, 2026 /CNW/ --

Highlights

La Verde Emerging as Hot Chili Cornerstone Asset

Drilling at the Company's La Verde copper-gold (Cu-Au) porphyry deposit in coastal Chile continued during the quarter, with a third drill rig commencing in May.
La Verde is one of Chile's most significant new coastal Cu-Au porphyry discoveries and is fast-shaping as a cornerstone asset for the Company's coastal range Costa Fuego copper-gold (Cu- Au) project.
Standout results reported during the quarter included:
- DKD044 recorded 391.1 m grading 0.51% CuEq¹ (0.42% Cu, 0.11 g/t Au) from surface, including:
  - 17.8 m grading 0.68% CuEq (0.63% Cu, 0.06 g/t Au)

from surface

40.7 m grading 0.60% CuEq (0.50% Cu, 0.12 g/t Au) from 103.3 m
85.4 m grading 0.61% CuEq (0.50% Cu, 0.15 g/t Au) from 160 m
19.7 m grading 0.70% CuEq (0.57% Cu, 0.15g/t Au) from 276.1 m
DKP053 recorded 250 m grading 0.50% CuEq (0.39% Cu, 0.14g/t Au) from 64 m depth, including
36 m grading 0.72% CuEq (0.59% Cu, 0.18g/t Au) from 82 m
DKP054 recorded 124 m grading 0.46% CuEq (0.40% Cu, 0.07g/t Au) from 42 m depth, including
26 m grading 0.71% CuEq (0.63% Cu, 0.10g/t Au) from 58 m
DKP058 recorded 108 m grading 0.54% CuEq (0.45% Cu, 0.11 g/t Au) from 24 m depth, including
32 m grading 0.60% CuEq (0.52% Cu, 0.12 g/t Au) from 24 m
DKD049 recorded 213 m grading 0.44% CuEq (0.38% Cu, 0.07g/t Au) from 504 m depth, including
57.3 m grading 0.60% CuEq (0.51% Cu, 0.10 g/t Au) from 535.8 m
DKP028D recorded 258.9 m grading 0.42% CuEq (0.33% Cu, 0.09 g/t Au) from 358 m, including
27.4 m grading 0.76% CuEq (0.63% Cu, 0.16 g/t Au) from 499.5 m
Assays pending for 21 drillholes (three DD, three DD tails and 15 RC) and second accredited laboratory now operating at full capacity – significantly improving Hot Chili's assay turnaround times

Hot Chili Secures US$15 Million Via Amendment Agreement with OR Royalties

La Verde, a pre-resource asset, is now added to OR's

royalty footprint for US$15 million in funding

OR royalty "look-through" value has doubled, given its equivalence to a 1.12% CuEq¹ NSR royalty across payable metals for a total consideration of US$30 million (following additional US$15 million amendment agreement), and Hot Chili's current market capitalisation of approximately US$230 million
Change of Control Royalty Buyback terms aligned with

ongoing strategic partnering process

__________________________________ 1 CuEq considers assumed commodity prices and average metallurgical recoveries from test work. See qualifying statements below.

2 US$15 million (approximately A$21.4 million)

Strong Cash Position of Approx. A$46 Million Following Closure of OR Deal Diamond and RC Drill rigs accelerating development of the La Verde Cu-Au deposit

Cautionary Statement – JORC Code (2012)

The Costa Fuego Copper-Gold Project is currently at the Pre- Feasibility Study ("PFS") stage. The production targets and forecast financial information contained in this report are based on technical and economic assessments that are preliminary in nature. While the PFS incorporates Indicated and Inferred Mineral Resources, there is a lower level of geological confidence associated with Inferred Mineral Resources, and no certainty that further exploration or development will result in the conversion of Inferred Mineral Resources to Indicated or Measured categories.

The PFS is not a definitive study and is based on a number of assumptions, including commodity prices, capital and operating costs, metallurgical recoveries, permitting, and other factors, which are subject to change. The outcomes of the PFS should not be used as the basis for a final investment decision. Further work, including additional drilling, metallurgical testing, and detailed engineering, is required before the Company can make a decision to proceed to development.

Of the Mineral Resources scheduled for extraction in the PFS production plan, more than 99% are classified as Indicated, with the remaining <1% as Inferred. The Company has concluded that it has reasonable grounds for disclosing a production target which includes a small amount of Inferred Mineral Resources, as permitted under the JORC Code. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised. The viability of the development scenario envisaged in the PFS does not depend on the inclusion of Inferred Mineral Resources. However, it is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Measured or Indicated Mineral Resource with continued drilling.

The Mineral Resources underpinning the production target in the PFS have been prepared by a Competent Person in accordance with the requirements of the JORC 2012. For full details on the Mineral Resource estimate, please refer to the ASX announcement of 27 March 2025.

To achieve the outcomes indicated in the PFS, including reaching Definitive Feasibility Study ("DFS"), mine construction and production stages, funding in the order of US$1.27 Billion will be required, including pre-production and working capital and assumed financing charges. Investors should note that there is no certainty that Hot Chili will be able to raise that amount of funding when needed. One of the key assumptions is that the funding for the Project will be available when required and on acceptable terms. It is also possible that such funding may only be available on terms that may be dilutive to, or otherwise affect the value of, Hot Chili's existing shares. It is also possible that Hot Chili could pursue other value realisation strategies such as debt financing, a sale or partial sale of its interest in the Costa Fuego Copper Project and/or Huasco Water, sale of further royalties and/or streaming rights, sale of non-committed offtake rights, and sale of non-core assets.

The Company cautions that there is no certainty that the results or estimates contained in the PFS will be realised.

This Report contains forward-looking statements. Hot Chili has concluded that it has a reasonable basis for providing these forwardlooking statements and believes it has a reasonable basis to expect it will be able to fund development of the Costa Fuego Copper Project.

However, a number of factors could cause actual results or expectations to differ materially from the results expressed or implied in the forward-looking statements. Given the uncertainties involved, investors should not make any investment decisions based solely of the results of the PFS.

SUMMARY OF OPERATIONAL ACTIVITIES

Higher-Grade Starter Pit Firming as a Standout Feature of La Verde

The Company's ongoing focus on shallow infill and step-out drilling across the up-dip extension of La Verde's high-grade core, continued to deliver more outstanding results from Reverse Circulation (RC) drill holes DKP053, DKP054, DKP056, and DKP058 (Figure 1 and Figure

2) during the quarter.

Numerous drilling intersections returned across the up-dip portion of La Verde's high-grade core, all contain broad zones of higher-grade (+0.7% CuEq) mineralisation from shallow depths. Importantly, assay results are pending for nearby up-dip drillhole DKP052 (Figure 3), results expected soon (see announcement dated 5 May 2026).

These ongoing shallow RC drill results further expand the footprint of near-surface, higher-grade mineralisation and continue to strengthen the scale and continuity of a significant, near-surface, enrichment zone - capable of delivering a higher-grade starter pit opportunity for Costa Fuego (Figure 4).

Expansion Drilling Delivering Continued Success

Diamond (DD) drilling assay results for step-out holes DKD044, DKD049 and DKP028D also confirmed additional bulk tonnage extensions and delivered further expansion of La Verde's high-grade core (Figures 2 and 3) during the quarter.

Assay results from DKD044 returned a significant intersection of 391 m grading 0.51% CuEq (0.42% Cu, 0.11g/t Au) from surface, (Figure 1), including several higher-grade intervals, confirming broad and continuous high-grade copper-gold mineralisation on the western side of the high-grade core

DD hole DKD049 was designed as a 175 m step-out from DKD039 - which recorded the highest-grade and widest drilling intersection to date at La Verde (725 m grading 0.42% CuEq (0.36% Cu, 0.07 g/t Au from 18m depth). Results from DKD049 confirm a significant expansion of La Verde's eastern flank at depth.

DKP028D successfully extended a previous RC drillhole (which ended in mineralisation), recording a further 200m down-hole of mineralisation across La Verde's western flank.

Advancing Toward Maiden Mineral Resource and Pre-Feasibility Study (PFS) Integration

Hydrogeological, geotechnical, metallurgical, mine engineering and environmental workstreams are all advancing well toward full integration of La Verde into the Company's Costa Fuego production hub. Additional mineralogical analysis activities were also carried out during the quarter, including Terraspec data collection and drill core scanning using LithologyIQ's hyperspectral instrument.

A maiden Mineral Resource Estimate (MRE) for La Verde is expected to be released later this year followed by a revised PFS for Costa Fuego and then finally culminating in the formal submission of an Environmental Impact Assessment for Costa Fuego in Q2CY 2027.

The Company expects that La Verde's rapid integration will be transformative for Costa Fuego's financial metrics and global standing, already ranked amongst the world's top five by-scale¹, independent copper developments, not controlled by a major mining company.

___________________________________ 1 See Slide 20, Corporate Presentation Rule Symposium – July 2026

Additional ISO Accredited Assay Laboratory Engaged

During the quarter, delivery of assay results increased to over 10 weeks in some cases. Hot Chili took proactive measures and engaged the services of an additional ISO accredited laboratory in the region, to ensure reporting of outstanding assay results is fast tracked, and assay turnaround times are accelerated. Improved turnaround times have been noted from both laboratories since the addition of a second laboratory.

Project Development Advances

Hot Chili has established a dedicated project development team, led by experienced project director Mr David Bayona, to advance the Costa Fuego Project through its critical development phase. Under a single governance framework, the team is overseeing delivery of the Environmental Impact Assessment (EIA) and the revised Pre- Feasibility Study (PFS) programs, coordinating engineering, permitting, social performance, infrastructure, technical studies, project controls, key service providers, and third-party stakeholders.

This organisational transition marks an important step in Hot Chili's evolution from an exploration-focused company to a project development and delivery organisation, strengthening readiness for permitting, financing, detailed engineering and project execution. The integrated structure improves decision-making, maintains alignment across workstreams and enhances schedule discipline, positioning Costa Fuego for successful execution.

Environmental Impact Assessment (EIA) On-Track

The Costa Fuego Environmental Impact Assessment (EIA) continues to advance, supported by a comprehensive schedule that enables weekly and monthly monitoring of progress, critical path activities, and milestones across all environmental workstreams.

A key strategic decision adopted during the quarter was the separation of the environmental permitting process into two independent EIAs:

EIA 1A - Huasco Water seawater intake, pumping and distribution system
EIA 1B - Costa Fuego Development Project.

This approach provides greater clarity for regulators, establishes independent areas of influence for environmental assessment, reduces duplication of baseline and impact evaluation work, and aligns the seawater supply system with the development of the mining project.

Key workstreams advanced during the quarter included environmental baseline studies, community and stakeholder engagement, indigenous engagement program, and preparation of the formal EIA documentation.

Revised Pre-Feasibility (PFS2)

In May 2026, Hot Chili commenced workstreams toward delivery of a significant revision of its 2025 Pre-Feasibility Study (PFS), aiming to incorporate the La Verde Cu-Au discovery into the Costa Fuego development strategy. The study remains on track and is being progressed in parallel with the Environmental Impact Assessment (EIA 1B) program under a common project governance framework.

The revised study is assessing development options to improve project economics, reduce execution risk and simplify project delivery. Key areas of assessment include the integration of La Verde and the potential development of a large open-pit mining scenario at Cortadera as an alternative to the previously defined open-pit and underground block cave operation for the later years of Costa Fuego's mine plan.

Results from the study will support selection of the preferred development pathway for Costa Fuego and provide greater clarity on project scope, mining strategy, infrastructure requirements and project economics.

Huasco Water – Update on Second Maritime Licence Application

A second maritime license application (desalination license) continues to advance through regulatory approval processes. Owing to a change of government in Chile earlier this year, the application has been delayed. Hot Chili has been assured by regulatory authorities that the application remains in progress, in-line with Huasco Water's priority status with the Chilean Ministry of Finance for streamlined approval processing.

The Company expects to receive an update in relation to this application in the coming months.

Social Integration and Community Support

Hot Chili continued its Huasco Valley community support programs during the quarter. A community perception study completed in June 2026, recorded a 93% "High Positive Awareness" score, with respondents recognising the Company's positive community relationships, and potential to develop a modern and responsible mining operation with the potential to revitalise employment social benefit for the Huasco Valley region.

During recent severe weather events in July, that prompted a government-declared state of emergency, Hot Chili worked proactively with local communities to prepare - providing water, fuel, food and coal to neighbouring residents of Costa Fuego. Following this once-in-fifty-year rain event, the team resumed visits to reconnect with communities, providing supplies and learning first-hand what was needed for recovery.

Hot Chili Community Team providing support to neighbours of the Costa Fuego Project

Impact of the recent rain event on regional infrastructure

Figure 1. Plan view map of La Verde showing recent drill hole results and updated +0.2% copper (yellow), +0.3% copper (red), +0.4% copper (magenta) mineralisation interpolants. Drilled holes with pending assays are shown in black. Position of A – A’ cross section (Figure 2), and B – B’ cross section (Figure 3) annotated with white dashed lines. Conceptual open pit shells1 displayed for $US3.50/lb Cu (blue) and $US6.00/lb Cu (green) displayed as dashed lines. Results reported including CuEq2.

1 See Page 25 of this announcement for detail on the US$3.50 Cu and US$6.00 Cu conceptual open pit shells (Exploration Targets). Any potential tonnage and grade of the Exploration Target shown is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource within the target area, and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

2 Copper Equivalent (CuEq) reported for the drillhole intersections were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery). The Metal Prices applied in the calculation were: Cu=4.50 USD/lb, Au=3,150 USD/oz, Mo=20 USD/lb, and Ag=30 USD/oz. The entirety of the intersection is assumed as fresh. The recovery and copper equivalent formula for La Verde uses Cortadera as a proxy, which is considered reasonable given both the similar mineralisation style and amenability testwork completed thus far at La Verde – Recoveries of 83% Cu, 56% Au, 83% Mo and 37% Ag. CuEq (%) = Cu (%) + 0.69 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0043 x Ag(g/t).

Figure 2. Long-section slice (A – A’) showing recent drill hole results and updated +0.2% copper (yellow), +0.3% copper (red), +0.4% copper (magenta) mineralisation interpolants. Returned Cu grades shown on hole traces, drilled holes with pending assays are shown in black. Conceptual open pit shells1 displayed for $US3.50/lb Cu (blue) and $US6.00/lb Cu (green) displayed as dashed lines. Results reported including CuEq2.

2 Copper Equivalent (CuEq) reported for the drillhole intersections were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery). The Metal Prices applied in the calculation were: Cu=4.50 USD/lb, Au=3,150 USD/oz, Mo=20 USD/lb, and Ag=30 USD/oz. The entirety of the intersection is assumed as fresh. The recovery and copper equivalent formula for La Verde uses Cortadera as a proxy, which is considered reasonable given both the similar mineralisation style and amenability testwork completed thus far at La Verde – Recoveries of 83% Cu, 56% Au, 83% Mo and 37% Ag. CuEq (%) = Cu(%) + 0.69 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0043 x Ag(g/t).

Figure 3. Cross section slice (B – B’) showing recent drill hole results DKP053 and DKP054 (± 75m clipping) and updated +0.2% copper (yellow), +0.3% copper (red), +0.4% copper (magenta) mineralisation interpolants. Returned Cu grades shown on hole traces, drilled holes with pending assays are shown in black. Conceptual open pit shells1 displayed for $US3.50/lb Cu (blue) and $US6.00/lb Cu (green) displayed as dashed lines. Results reported including CuEq2. Assay pending for DKP052.

2 Copper Equivalent (CuEq) reported for the drillhole intersections were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery). The Metal Prices applied in the calculation were: Cu=4.50 USD/lb, Au=3,150 USD/oz, Mo=20 USD/lb, and Ag=30 USD/oz. The entirety of the intersection is assumed as fresh. The recovery and copper equivalent formula for La Verde uses Cortadera as a proxy, which is considered reasonable given both the similar mineralisation style and amenability testwork completed thus far at La Verde – Recoveries of 83% Cu, 56% Au, 83% Mo and 37% Ag. CuEq (%) = Cu(%) + 0.69 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0043 x Ag(g/t).

Figure 4. Oblique slice towards NW (Azi 325°, Plunge+26°). 0.3% and 0.4% Cu interpolants displayed for oxide and transitional material, sliced along NNE orientation with the front removed. US$3.50/lb Cu conceptual open pit shell displayed in dark grey; US$6.00/lb Cu conceptual open pit shell displayed in light grey1. Base of weathering shown as dashed blue line. Results reported including CuEq2.

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