Hot Chili Quarterly Report Period Ending
Period Ending 31 March 2025
PERTH, Australia, April 24, 2025 /CNW/ -
Highlights
Hot Chili Announces Preliminary Feasibility Study (PFS) & Maiden1 Ore Reserve2 for the Costa Fuego Cu-Au Project
Low-risk, Chilean coastal copper development with advanced permitting - multi-decade mine life, top quartile copper production scale3 and lowest quartile capital intensity Strong economics and leverage to rising copper price:
Post-tax Net Present Value (NPV8%) of US$1.2 billion (approximately, within a range of US$786 million to US$1.62 billion) and post-tax Internal Rate of Return (IRR) of 19% (approximately, within a range of 15% to 22%)
Maiden ore reserve for Costa Fuego Copper-Gold Project (Costa Fuego) lowers operational risk1,2:
Probable Ore Reserves of 502 Mt at 0.37% Cu, 0.10 g/t Au, 0.49 g/t Ag and 97 ppm Mo: Across sulphide concentrator, oxide leach and low-grade sulphide leach processing streams
Hot Chili Announces PFS for Huasco Water & MOU for Seawater Supply to Costa Fuego
Strong economics for a large, multi-user, water business opportunity Stage 1 PFS4 for 500L/s of potential seawater supply to Costa Fuego
Post-tax NPV8% of US$122 million and IRR of 19%
Staged approach for regional, desalinated water supply with large 4,000 L/s catchment of potential off-takers Stage 2 PFS for 1,300 L/s of potential desalinated water supply
Post-tax NPV8% of US$977 million and IRR of 19%
First-Mover Advantage, only active maritime licence in the Huasco Valley region of Chile
Hot Chili Confirms Major Cu-Au Porphyry Discovery at La Verde
Multiple new significant drill intersections underpin rapidly growing oxide and sulphide discovery, located 30km south of Costa Fuego, providing significant potential for front-end,
open pit, mine life growth
Phase 1 drill programme completed on 10 April 2025, phase 2 planned and awaiting regulatory approval Assay results for nineteen holes pending and second Environmental Impact Assessment (EIA) commenced to integrate La Verde into Costa Fuego and materially enhance project economics
A$7.5M Cash and A$5.0M in Returns Expected (VAT and JV recoup)
Expenditure reduced by 60% to 65% over next six months during Definitive Feasibility Study (DFS) planning & PFS optimisation phases
Potential Strategic Funding Discussions Advancing
Strong interest in asset-level investment opportunities for Costa Fuego and Huasco Water __________ 1 Hot Chili previously released Ore Reserves for Productora, a component of Costa Fuego, in the ASX announcement 'Hot Chili Delivers PFS and Near Doubles Reserves at Productora' 2 March 2016. Maiden Ore Reserve for Cortadera and San Antonio and Alice deposits, and updated Ore Reserve for Productora and as a whole Costa Fuego. 2 Hot Chili is a dual listed entity and complies with the JORC 2012 code for the ASX for the reporting of Exploration Results, Mineral Resources and Ore Reserves. The company complies with CIM Definition Standards for Mineral Resources and Mineral Reserves (10 May 2014) that are incorporated by reference into NI 43-101 for the TSXV. Terminology of Ore Reserves and Mineral Reserves are interchangeable and have the same meaning within this announcement.
3 S&P Market Intelligence. The Global Developer Peer Group of project studies were selected on the following basis: Global primary copper projects (not controlled by a major miner), with net by-product credits where applicable, reporting studies of average annual life-of-mine copper production of greater than 40 kt, which have been published within the last 5 years.
4 The Huasco Water Supply PFS has been aligned with the preliminary feasibility study for the Company's Costa Fuego project (the "Costa Fuego PFS") and shares the same assumptions for Costa Fuego in stage 1. See announcement dated 27th March 2025 "Hot Chili Announces PFS & Maiden Mineral Reserve for the Costa Fuego Cu-Au Project" outlining the results of the Costa Fuego PFS. An independent technical report for the Costa Fuego PFS, prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and JORC Code 20212 within 45 days thereof.
Drilling operations continued at La Verde during the quarter, located 30km south of Costa Fuego in coastal Chile (CNW Group/Hot Chili Limited)
Cautionary Statement – JORC Code (2012)
The Preliminary Economic Assessment referred to in this Report is equivalent to a Scoping Study under JORC Code (2012) reporting guidelines. It has been undertaken for the purpose of initial evaluation of a potential development of the Costa Fuego Copper Project in Chile. It is a preliminary technical and economic study of the potential viability of the Costa Fuego Copper Project. The PEA outcomes, production target and forecast financial information referred to in the Report are based on low level technical and economic assessments that are insufficient to support estimation of Ore Reserves. The PEA is presented in US dollars to an accuracy level of +/- 35%. While each of the modifying factors was considered and applied, there is no certainty of eventual conversion to Ore Reserves or that the production target itself will be realised. Further exploration and evaluation and appropriate studies are required before Hot Chili will be in a position to estimate any Ore Reserves or to provide any assurance of any economic development case. Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the PEA.
Of the Mineral Resources scheduled for extraction in the PEA production plan, approximately 99% are classified as Indicated and 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 PEA 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 PEA 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 31 March 2022. The Mineral Resource Estimate update released in February 2024 does not materially change the Mineral Resource inventory that formed the basis of the 2023 PEA, and no new scientific or technical information has been developed that would materially affect the outcome of the 2023 PEA and, therefore, the results and conclusions of the 2023 PEA are considered current and have been restated for this Report.
To achieve the outcomes indicated in the PEA, including reaching Definitive Feasibility Study ("DFS"), mine construction and production stages, funding in the order of US$1.10 Billion will be required, including pre-production and working capital and assumed financing charges. Investors should note that that there is no certainty that Hot Chili will be able to raise that amount of funding when needed. One of the key assumptions is that the funding for the Project will be available when required and on acceptable terms. It is also possible that such funding may only be available on terms that may be dilutive to, or otherwise affect the value of, Hot Chili's existing shares. It is also possible that Hot Chili could pursue other value realisation strategies such as debt financing, a sale or partial sale of its interest in the Costa Fuego Copper Project and/or Huasco Water, sale of further royalties and/or streaming rights, sale of non-committed offtake rights, and sale of non-core assets.
This Report contains forward-looking statements. Hot Chili has concluded that it has a reasonable basis for providing these forward-looking statements and believes it has a reasonable basis to expect it will be able to fund development of the Costa Fuego Copper Project. However, a number of factors could cause actual results or expectations to differ materially from the results expressed or implied in the forward-looking statements. Given the uncertainties involved, investors should not make any investment decisions based solely of the results of the PEA.
SUMMARY OF OPERATIONAL ACTIVITIES
Costa Fuego PFS Delivered On-Time & Within Guidance
The Costa Fuego PFS was announced on 27th March 2025. The PFS delivered globally meaningful scale and a multi-decade project life for Costa Fuego. Highlights included:
Globally Meaningful Scale & Multi-Decade Mine Life
Project Life Extended to 20 Years
Average Annual Production Increased 116 ktpa Average CuEq1 Production Rate: Including 95 kt Cu and 48 koz Au during primary production (first 14 years)
Competitive Cost Position: Life of mine (LOM) average C1 Cash Cost2 of US$ 1.38/lb and All-in-Sustaining Cost of US$1.85/lb (both estimated net of by-product credits)
Increase in Total Copper and Gold Production: 1.5 Mt Cu (3.31 Blb Cu) and 780 koz Au produced over the LOM Robust Financial Profile: Total LOM revenue of approximately US$17.3 billion and total LOM free cash flow of approximately US$3.86 billion (post-tax, after operating costs, capital costs, and royalties)
Significant Risk Reduction: PFS prepared assuming ± 25% accuracy. An additional US$442 million of capital costs applied to significantly reduce key areas of risk, including changes in project scope and inflationary pressures
Strong Economics and Leverage to Rising Copper Price
Post-tax NPV8% of US$1.2 billion (approximately, within a range of US$786 million to US$1.62 billion) and post-tax IRR of 19% (approximately, within a range of 15% to 22%) First Quartile Capital Intensity: Start-up Capital Cost of US$ 1.27 billion delivers a capital intensity of US$ 14,079/t of average annual CuEq. metal produced Highly Leveraged to Copper Price: At spot copper price of US$5.30/lb3, post-tax NPV8% increases to US$2.2 billion and post-tax IRR to 30%, respectively
Low-Risk, Coastal Copper Development with Advanced Permitting
Low Elevation and Over a Decade of Permitting Advance Provides a Foundation for Development: One of only a few global copper development projects at low elevation with a water permit, and grid power Preparing to submit Environmental Impact Assessment (EIA): Costa Fuego Stage-1 (EIA-
1) based on current PFS-scale and definition
Maiden Ore Reserve for Costa Fuego Lowers Operational Risk
Maiden4 Ore Reserve5 for Costa Fuego. Probable Ore Reserves of 502 Mt at 0.37% Cu, 0.10 g/t Au, 0.49 g/t Ag and 97 ppm Mo: Across sulphide concentrator, oxide leach and lowgrade sulphide leach processing streams
__________ 1 The copper-equivalent (CuEq) annual production rate was based on the combined processing feed (across all sources) and used long-term commodity prices of: Copper US$ 4.30/lb, Gold US$ 2,280/oz, Molybdenum US$ 20/lb, and Silver US$25/oz; and estimated metallurgical recoveries for the production feed to the following processes: Concentrator (86% Cu, 54% Au, 37% Ag, 70% Mo), Oxide Leach (65% Cu only), & Low-grade Sulphide Leach (39% Cu only).
2 See page Announcement page 3 for full non-IFRS measures disclaimer.
3 Copper price – Fast markets quote 26/03/2025. High of $5.37/lb closing price $5.24/lb 4 Hot Chili previously released Ore Reserves for Productora, a component of Costa Fuego, in the ASX announcement 'Hot Chili Delivers PFS and Near Doubles Reserves at Productora' 2 March 2016. Maiden Ore Reserve for Cortadera and San Antonio and Alice deposits, and updated Ore Reserve for Productora and as a whole Costa Fuego. 5 Hot Chili is a dual listed entity and complies with the JORC 2012 code for the ASX for the reporting of Exploration Results, Mineral Resources and Ore Reserves. The company complies with CIM Definition Standards for Mineral Resources and Mineral Reserves (10 May 2014) that are incorporated by reference into NI 43-101 for the TSXV. Terminology of Ore Reserves and Mineral Reserves are interchangeable and have the same meaning within this announcement.
Figure 3. Costa Fuego PFS to PEA highlights across key metrics (CNW Group/Hot Chili Limited)
Leverage to Cu Price - Global Developer Peer Group (CNW Group/Hot Chili Limited)
Sphere size represents Leverage Index – which was calculated as the ratio of % increase in Cu price to % increase in NPV8%.
The Global Developer Peer Group of project studies were selected on the following basis: Global primary copper projects (not controlled by a major miner), with net by-product credits where applicable, reporting studies of average annual life-of-mine copper production of greater than 40 kt, which have been published within the last 5 years. Projects with older studies were considered to be on hold. Significant projects such as Pebble and King-king were excluded by Hot Chili due to high perceived geopolitical risk, limiting the probability of development. Projects controlled by mid-tier mining companies near Costa Fuego were also included (Josemaría, Santa Domingo, Mantos Blanco and Mantoverde) for comparison purposes. References to active mines and other mineral projects is for illustration purposes only. There can be no assurances the Company will achieve comparable results.
Source: Published Company reports on studies undertaken on projects that were not in production at the time of the studies. Information from projects has been sourced from publicly available data that has been provided under differing economic assumptions. Public information for projects has been adjusted to provide a standardised data set under a US$4.30/lb Cu price. Published sensitivity data provided results that bracketed an US$4.30/lb Cu price, which was then calculated. Details of the adjustment are provided in the reference table on Benchmarking Data in the appendix (see slides 55- 59 of presentation "Costa Fuego Copper-Gold Project Preliminary Feasibility Study & Maiden Ore Reserve" Dated 27th March 2025 ).
Capital Intensity - South American Peer Group (CNW Group/Hot Chili Limited)
Sphere size represents projected Life of Mine Average Annual CuEq* Production. 1 PFS CuEq considers long-term commodity prices and PFS metallurgical recoveries for the production feed from testwork. The CuEq metal was determined as the equivalent copper metal with equal value to all saleable production. See slide 37 for PFS commodity prices and slides 33 & 34 for PFS metallurgical recoveries.
The South American Developer Peer Group of project studies were selected on the following basis: South American primary copper projects (not controlled by a major miner), net of by-product credits where applicable, reporting studies of average annual life-of-mine copper production of greater than 40 kt, which have been published within the last 5 years. Projects with older studies were considered to be on hold. Projects controlled by mid-tier mining companies near Costa Fuego were also included (Josemaría, Santa Domingo, Mantos Blanco and Mantoverde) for comparison purposes. References to active mines and other mineral projects is for illustration purposes only. There can be no assurances the Company will achieve comparable results.
Source: Published Company reports on studies undertaken on projects that were not in production at the time of the studies. Information from projects has been sourced from publicly available data that has been provided under differing economic assumptions. Public information for projects has been adjusted to provide a standardised data set under a US$4.30/lb Cu price. Published sensitivity data provided results that bracketed an US$4.30/lb Cu price, which was then calculated.
Details of the adjustment are provided in the reference table on Benchmarking Data in the appendix (see slides 55-59 of presentation "Costa Fuego Copper-Gold Project Preliminary Feasibility Study & Maiden Ore Reserve" Dated 27th March 2025 ).
Huasco Water PFS Outlines Valuable Strategic Asset
The Huasco Water1 PFS was announced on 31 March 2025. The Huasco Water PFS presented a robust business case for both Stage 1 and Stage 2 of its proposed regional scale seawater and desalinated water business, with a conceptual level study for Stage 3 desalinated water supply expansion. Highlights included:
Strong Economics for a Large, Multi-User, Water Business
Stage 12 Water Supply PFS for 500L/s of Potential Seawater Supply: Post-tax NPV8% of US$122 million and IRR of 19%. Construction capital cost for seawater supply estimated at US$151 million with a 4.5-year payback
Stage 2 Water Supply PFS for 1,300 L/s of Potential Desalinated Water Supply: Post-tax NPV8% of US$977 million and IRR of 19%. Construction capital cost for desalinated water supply estimated at US$1.4 billion with a 4-year payback. Stage 2 financial outcomes include Stage 1 capital and operating cashflows
Stage 3 Conceptual Study for Expansion to 2,300 L/s of Potential Desalinated Water Supply
Stage 1- Multi-Decade Seawater Supply to Costa Fuego
20 Year Seawater Supply with Foundation Off-taker: Memorandum of Understanding (MOU)
executed for water supply of up to 500 L/s to Costa Fuego Long Lead-times Permits Secured: Granted maritime water concession to extract seawater, permit for coastal land access, Stage 1 pipeline easements and connection to the electrical grid secured Near-Term Development Decision Tied to Costa Fuego: First water supply planned for end of decade
Stage 2 and 3 – Regional, Desalinated Water Supply Opportunity
Large Catchment of Potential Off-takers: Over 4,000 L/s of desalinated water demand identified, including six undeveloped mining projects without secured access to desalinated water supply. No offtake agreements have been secured for stage 2 or 3 and discussions with potential customers are ongoing Staged Growth Approach: Establishment of seawater supply infrastructure toward the end of the decade, followed by the commencement of initial desalinated water supply shortly thereafter, and subsequent staged expansion. The staged approach enables long term scalable water supply to support mining, community, and agriculture in the Huasco Valley region with potential to extend well beyond the initial project horizons
First-Mover Advantage
Only Active Maritime License: HW Aguas para El Huasco SpA (Huasco Water), a joint venture between Hot Chili (80% interest) and Compañia Minera Del Pacifico "CMP" (20% interest), is the only company with permitted access to supply seawater in the Huasco Valley region following a ten-year regulatory approval process Desalination Permitting Advancing: Over a year advanced on regulatory applications to enable the supply of desalinated water from the existing maritime concession and a second maritime concession application by Huasco Water Long Permitting Timelines Continue: No regulatory changes have been made to Chile's maritime permitting process since Huasco Water was granted its concession. Hot Chili maintains a competitive advantage as the first mover in the area for a water distribution business EIA Advanced: Stage 1 seawater supply is included within the Costa Fuego EIA, baseline studies complete.
__________ 1 HW Aguas para El Huasco SpA ("Huasco Water"), a joint venture between Hot Chili (80% interest) and Compañia Minera Del Pacifico ""CMP" (20% interest)
2 The Huasco Water Supply PFS has been aligned with the preliminary feasibility study for the Company's Costa Fuego project (the "Costa Fuego PFS") and shares the same assumptions for Costa Fuego in stage 1. See announcement dated 27th March 2025 "Hot Chili Announces PFS & Maiden Mineral Reserve for the Costa Fuego Cu-Au Project" outlining the results of the Costa Fuego PFS. An independent technical report for the Costa Fuego PFS, prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and JORC Code 20212 within 45 days thereof.
Huasco Water PFS Key Outcomes
| Stage | Key Performance Indicator | IRR | |||
|---|---|---|---|---|---|
| 12 % | 15.5 % | 19% (Base case) | |||
| Stage 1 PFS Engineering (Seawater) | Fixed Water Tariff | US$M/year | 23 | 28 | 33 |
| Variable Water Tariff | US$/m³ | 0.48 | 0.58 | 0.69 | |
| Average Annual Price of Water1 | US$/m³ | 2.31 | 2.80 | 3.32 | |
| Nominal Seawater Water Demand | L/s | 500 | 500 | 500 | |
| Costa Fuego PFS Total Cash Costs | US$/lb Cu | 1.31 | 1.35 | 1.38 | |
| Impact on Costa Fuego PFS Total Cash Cost | US$/lb Cu | -0.07 | -0.04 | 0 | |
| Post-tax NPV8 | US$M | 41 | 80 | 122 | |
| Levelized Cost of Water to Huasco Water (8%) | US $/m³ | 1.66 | 1.66 | 1.66 | |
| Construction Capital | US$M | 151 | 151 | 151 | |
| Sustaining Capital | US$M | 26 | 26 | 26 | |
| Stage 1 & 2 PFS Engineering (Seawater & Desalinated Water) | Fixed Water Tariff | US$M/year | 243 | 283 | 327 |
| Variable Water Tariff | US$/m³ | 1.47 | 1.71 | 1.98 | |
| Average Annual Price of Water2 | US$/m³ | 6.39 | 7.44 | 8.59 | |
| Nominal Desalinated Water Demand | L/s | 1,300 | 1,300 | 1,300 | |
| Post-tax NPV8 | US$M | 328 | 640 | 977 | |
| Levelized Cost of Water to Huasco Water (8%) | US $/m³ | 4.85 | 4.85 | 4.85 |
| Construction Capital | US$M | 1,430 | 1,430 | 1,430 | |
| Sustaining Capital | US$M | 1,170 | 1,170 | 1,170 | |
| Stage 33 Conceptual Study (Desalinated Water Expansion) | Fixed Water Tariff | US$M/year | 312 | 359 | 410 |
| Variable Water Tariff | US$/m³ | 1.78 | 2.04 | 2.33 | |
| Average Annual Price of Water4 | US$/m³ | 6.93 | 7.97 | 9.11 | |
| Nominal Desalinated Water Demand | L/s | 2,300 | 2,300 | 2,300 | |
| Expansion Capital | US$M | 1,900 | 1,900 | 1,900 | |
| Sustaining Capital | US$M | 2,380 | 2,380 | 2,380 |
_________ 1 Average Annual Price of Water for Costa Fuego. Price is calculated subject to each project's location and requirements.
2 Average Annual Price of Water for customers supplied in the Stage 2. Price is calculated subject to each customers location and requirements.
3 Stage 3 tariffs are the average for all customers for Stage 1, 2 and 3 4 Average Annual Price of Water for customers supplied in the Stage 3. Price is calculated subject to each customers location and requirements.
La Verde Exploration Update
On 11 February 2025, Hot Chili reported a second round of strong assay results from its La Verde copper-gold discovery, located approximately 30km south of Costa Fuego. Highlights included:
Rapidly Emerging Major Copper-Gold Porphyry Discovery
New drill results from an additional ten Reverse Circulation (RC) drill holes confirm La Verde as a major copper-gold porphyry discovery in low elevation coastal Chile, with broad, consistently mineralised intersections extending over 300 m vertically, commencing at shallow depths.
Multiple new significant drill intersections underpin rapidly growing oxide and sulphide discovery:
320 m grading 0.3% Cu and 0.1 g/t Au from 34 m to end-of-hole (DKP009)
including 134 m at 0.4% Cu and 0.2 g/t Au from 180 m depth including 56 m at 0.5% Cu and 0.2 g/t Au from 258 m depth 200 m grading 0.4% Cu and 0.1 g/t Au from 48 m to end-of-hole (DKP005)
including 38 m at 0.5% Cu and 0.2 g/t Au from 68 m depth 172 m grading 0.4% Cu and 0.2 g/t Au from 48 m (DKP012)
including 20 m at 0.5% Cu and 0.2 g/t Au from 62 m depth
and 78 m grading 0.5% Cu and 0.1 g/t Au from 228 m to end-of-hole
including 32 m at 0.6% Cu and 0.2 g/t Au from 232 m depth 135.5 m grading 0.3% Cu and 0.1 g/t Au from 64 m to end-of-hole (DKP006)
including 62 m at 0.4% Cu and 0.2 g/t Au from 124 m depth which included 26 m at 0.5% Cu and 0.3g/t Au from 124 m depth 32 m grading 0.4% Cu from surface (DKP011)
80 m grading 0.3% Cu and 0.1 g/t Au from 8 m depth (DKP004)
including 34 m at 0.4% Cu from 8 m depth
La Verde Discovery Keeps Growing – Large Scale Appeal
New drill results reinforce La Verde's potential scale, adding to the strong results reported on 18 December 2024:
308 m grading 0.5% Cu, 0.3 g/t Au from 46 m to end-of-hole (DKP002)
including 202 m at 0.6% Cu, 0.3g/t Au from 70 m depth which included 100 m at 0.7% Cu and 0.3g/t Au from 118 m depth
362 m grading 0.3% Cu, 0.1g/t Au from 28m to end-of-hole (DKP001)
including 174 m at 0.4% Cu and 0.1 g/t Au from 36 m depth
which included 22 m at 0.6% Cu, 0.2g/t Au from 144 m depth
Drilling Coverage at La Verde Doubled & Porphyry Mineralisation Remains Open
First-pass drill coverage now extends across an area measuring 1,000 m by 550 m: 30 reverse circulation (RC) holes for 9,352 m drilled.
Assay results pending for nineteen drill holes: Assay turnaround time from laboratories slower than usual due to peak summer drilling season in the high Andes
Shallow porphyry mineralisation remains open in all directions Phase 1 drill programme completed on 10th April 2025
Next Steps
Regulatory application for further clearing access being advanced
Phase 2 drill programme (RC and diamond drilling) planned to commence following
regulatory approval
Deeper diamond drill testing being planned: 8 of 12 RC drill holes reported to date recorded significant mineralisation to end-of-hole Advanced four-dimensional geological modelling underway in addition to regional scale exploration activities across the La Verde discovery area and Domeyko landholdings Second EIA commenced to integrate La Verde into Costa Fuego
View looking SW across the La Verde copper-gold porphyry discovery – showing the location of discovery drill hole DKP002 and historic copper oxide open pit area. (CNW Group/Hot Chili Limited)
Figure 1 Plan view map of the La Verde porphyry system showing significant intercepts compared to recent drill hole collars (yellow circles), planned drill collars (white circles) historic drill collars (black circles), +1% A+B vein footprint from mapping and drillholes (blue outline) and copper mineralisation interpolants from returned assay results. For full details of the drilling intercepts and assay results to date, refer to the Company's announcement "Hot Chili Confirms Major Cu-Au Porphyry Discovery at La Verde" dated 11 February 2025. (CNW Group/Hot Chili Limited)
Figure 2. Plan view slice at 950 RL (± 50 m clipping) of modelled tonalitic (pink polygon) and dioritic porphyry (red polygon) intrusions. Returned Cu grades graphed downhole. Area currently being drill tested is outlined by the dashed blue box. For full details of the drilling intercepts and assay results to date, refer to the Company's announcement "Hot Chili Confirms Major Cu-Au Porphyry Discovery at La Verde" dated 11 February 2025. (CNW Group/Hot Chili Limited)
Table 1 - Drill Holes Completed for Costa Fuego in Quarter 1 2025
| Prospect | Hole ID | North | East | RL | Depth | Azimuth | Dip | Results |
|---|---|---|---|---|---|---|---|---|
| La Verde | DKP014 | 6785852 | 324747 | 1,147 | 444 | 300 | -60 | Pending |
| La Verde | DKP015 | 6786096 | 324434 | 1,159 | 313 | 132 | -60 | Pending |
| La Verde | DKP016 | 6785947 | 324416 | 1,110 | 360 | 110 | -60 | Pending |
| La Verde | DKP017 | 6786094 | 324685 | 1,185 | 336 | 100 | -60 | Pending |
| La Verde | DKP018 | 6785835 | 324428 | 1,108 | 145 | 100 | -60 | Pending |
| La Verde | DKP019 | 6785720 | 324718 | 1,145 | 279.5 | 255 | -60 | Pending |
| La Verde | DKP020 | 6785748 | 324586 | 1,141 | 144 | 270 | -60 | Pending |
| La Verde | DKP021 | 6785619 | 324324 | 1,197 | 402 | 75 | -60 | Pending |
| La Verde | DKP022 | 6785527 | 324414 | 1,200 | 288 | 75 | -60 | Pending |
| La Verde | DKP023 | 6785421 | 324320 | 1,197 | 402 | 90 | -60 | Pending |
| La Verde | DKP024 | 6785424 | 324417 | 1,203 | 402 | 110 | -60 | Pending |
| La Verde | DKP025 | 6785313 | 324415 | 1,187 | 276 | 270 | -75 | Pending |
| La Verde | DKP026 | 6785870 | 324312 | 1,110 | 147 | 105 | -60 | Pending |
| La Verde | DKP027 | 6785755 | 324906 | 1,139 | 402 | 300 | -60 | Pending |
| La Verde | DKP028 | 6785617 | 324758 | 1,136 | 432 | 300 | -60 | Pending |
| La Verde | DKP029 | 6785615 | 324758 | 1,175 | 366 | 265 | -60 | Pending |
| La Verde | DKP030 | 6785770 | 324774 | 1,133 | 393 | 275 | -60 | Pending |
Table 2 – Significant Intersections returned for Costa Fuego in Quarter 1 2025
| Hole ID | Coordinates | Azim. | Dip | Hole Depth | Intersection | Interval | Copper | Gold | Silver | Molybdenum | |||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| North | East | RL | From | To | (m) | (% Cu) | (g/t Au) | (ppm Ag) | (ppm Mo) | ||||
| DKP003 | 6785971 | 324840 | 1192 | 117 | -59 | 282 | 36 | 246 | 210 | 0.2 | 0.1 | 0.4 | 5 |
| 110 | 128 | 18 | 0.2 | 0.2 | 0.3 | 7 | |||||||
| 140 | 160 | 20 | 0.3 | 0.1 | 0.4 | 7 | |||||||
| 188 | 196 | 8 | 0.3 | 0.1 | 0.5 | 4 | |||||||
| DKP004 | 6785836 | 324423 | 1093 | 90 | -60 | 120 | 8 | 88 | 80 | 0.3 | 0.1 | 0.5 | 19 |
| Incl | 8 | 42 | 34 | 0.4 | 0.0 | 0.6 | 16 | ||||||
| Or Incl | 26 | 36 | 10 | 0.6 | 0.1 | 0.5 | 18 | ||||||
| DKP005 | 6785789 | 324564 | 1124 | 91 | -60 | 248 | 8 | 247.5 | 239.5 | 0.3 | 0.1 | 0.9 | 18 |
| Or | 48 | 247.5 | 199.5 | 0.4 | 0.1 | 1.0 | 21 | ||||||
| Incl | 32 | 40 | 8 | 0.5 | 0.1 | 0.5 | 8 | ||||||
| And Incl | 68 | 106 | 38 | 0.5 | 0.2 | 1.1 | 9 | ||||||
| Or Incl | 70 | 82 | 12 | 0.6 | 0.2 | 1.0 | 8 | ||||||
| DKP006 | 6785721 | 324727 | 1130 | 110 | -60 | 199.5 | 64 | 199.5 | 135.5 | 0.3 | 0.1 | 0.8 | 6 |
| Incl | 124 | 186 | 62 | 0.4 | 0.2 | 1.1 | 7 | ||||||
| Or Incl | 124 | 150 | 26 | 0.5 | 0.3 | 1.2 | 7 | ||||||
| And Incl | 170 | 174 | 4 | 0.6 | 0.2 | 2.2 | 7 |
| DKP007 | 6785854 | 324742 | 1149 | 270 | -60 | 204 | 0 | 204 | 204 | 0.2 | 0.1 | 0.4 | 32 |
| Incl | 80 | 88 | 8 | 0.3 | 0.1 | 0.7 | 23 | ||||||
| And Incl | 160 | 204 | 44 | 0.3 | 0.1 | 0.5 | 84 | ||||||
| Or Incl | 186 | 194 | 8 | 0.4 | 0.1 | 0.7 | 91 | ||||||
| DKP008 | 6785855 | 324748 | 1150 | 5 | -60 | 324 | 0 | 324 | 324 | 0.2 | 0.1 | 0.5 | 12 |
| Incl | 0 | 16 | 16 | 0.3 | 0.1 | 0.3 | 6 | ||||||
| And Incl | 144 | 154 | 10 | 0.3 | 0.1 | 1.4 | 20 | ||||||
| And Incl | 174 | 218 | 44 | 0.3 | 0.1 | 0.5 | 7 | ||||||
| DKP009 | 6786075 | 324552 | 1152 | 131 | -60 | 354 | 34 | 354 | 320 | 0.3 | 0.1 | 0.7 | 13 |
| Incl | 46 | 66 | 20 | 0.5 | 0.1 | 0.9 | 8 | ||||||
| And Incl | 124 | 140 | 16 | 0.5 | 0.2 | 0.7 | 21 | ||||||
| And Incl | 180 | 314 | 134 | 0.4 | 0.2 | 0.8 | 8 | ||||||
| Or Incl | 258 | 314 | 56 | 0.5 | 0.2 | 1.1 | 6 | ||||||
| Or Incl | 260 | 274 | 14 | 0.5 | 0.3 | 1.7 | 4 | ||||||
| DKP010 | 6785851 | 324742 | 1148 | 209 | -60 | 276 | 0 | 92 | 92 | 0.2 | 0.1 | 0.3 | 10 |
| Incl | 0 | 10 | 10 | 0.4 | 0.2 | 0.3 | 4 | ||||||
| 136 | 220 | 84 | 0.3 | 0.1 | 0.8 | 15 | |||||||
| Incl | 190 | 206 | 16 | 0.4 | 0.1 | 1.2 | 20 | ||||||
| 252 | 274 | 22 | 0.3 | 0.1 | 0.6 | 14 | |||||||
| DKP011 | 6786096 | 324429 | 1159 | 91 | -60 | 326 | 0 | 32 | 32 | 0.4 | 0.0 | 0.8 | 23 |
| 228 | 252 | 24 | 0.2 | 0.0 | 0.5 | 72 | |||||||
| Incl | 232 | 234 | 2 | 0.4 | 0.0 | 2.1 | 44 | ||||||
| 274 | 310 | 36 | 0.2 | 0.0 | 0.3 | 31 | |||||||
| DKP012 | 6785977 | 324839 | 1193 | 300 | -60 | 306 | 48 | 220 | 172 | 0.4 | 0.2 | 0.5 | 14 |
| Incl | 62 | 82 | 20 | 0.5 | 0.2 | 0.3 | 6 | ||||||
| And Incl | 192 | 202 | 10 | 0.5 | 0.2 | 0.6 | 94 | ||||||
| And Incl | 228 | 306 | 78 | 0.5 | 0.1 | 0.8 | 24 | ||||||
| Or Incl | 232 | 264 | 32 | 0.6 | 0.2 | 1.0 | 16 | ||||||
| 248 | 260 | 12 | 0.7 | 0.2 | 0.8 | 21 |
SUMMARY OF CORPORATE ACTIVITIES
Cash Position and Capital Structure Changes
As of 31 March 2025, the Company had cash of A$7.5 million and no debt. The Company expects to receive approximately A$5 million in funds from VAT repayments and joint venture recoup from its partner CMP.
The operating expenditure for quarter ended 31 March 2025 included payments for exploration and evaluation of A$7.9 million. Included in this amount was A$4.0 million related to the completion of the two PFS for Costa Fuego and Huasco Water, and the advancement of the EIA. A total of A$3.9 million was spent on exploration activities across the La Verde copper-gold porphyry discovery and southern landholdings included in the Domeyko project.
The investing expenditure for quarter ended 31 March 2025 related to payments for patentes (annual rent) for the Company's mining tenements.
The Company expects monthly expenditure to be materially reduced by approximately 60% to 65% over the coming six months compared to this quarter, due to the completion and release of both the Costa Fuego and Huasco Water PFS, with only planning and optimisation activities expected during the next two quarters. Exploration expenditure will also be significantly reduced, with phase 1 drilling activities at La Verde having been completed on 10 April 2025.
In addition, the Company is engaged in discussions related to potential renegotiation of forthcoming Option payments later in 2025 to maximise funds, while Hot Chili engages in potential future strategic funding discussions.
The following summarises the Company's securities on issue:
151,596,149 ordinary fully paid shares
1,914,000 options at AUD $1.50 expiring 24 July 2026 5,938,248 service and performance rights
Board Changes
With the release of the Company's Pre-feasibility Studies for its Chilean Costa Fuego copper-gold project and Huasco Water project, Hot Chili commenced preparation in its next steps toward a final phase of development.
O n 11 March 2025, Hot Chili advised that Dr Nicole Adshead-Bell, Non-Executive Chair and Mr Stephen Quin, Non-Executive Director had tendered their resignations as Directors of the Company, effective immediately.
O n 17 March 2025, the Company announced the appointment of experienced and well-regarded Australian mining executive, Mrs Fiona Van Maanen, to the Board of Hot Chili as an Independent Non-Executive Director
Further board and key executive appointments are planned and aim to strengthen and align the Company's capability at an important inflection in the Company's growth.
Additional ASX Disclosure Information
ASX Listing Rule 5.3.2: There was no substantive mining production and development activities during the quarter.
ASX Listing Rule 5.3.3 - Schedule of Mineral Tenements as of 31 March 2025
The schedule of Mineral Tenements and changes in interests is appended at the end of this activities report.
ASX Listing Rule 5.3.4: Reporting under a use of funds statement in a Prospectus does not apply to the Company currently.
ASX Listing Rule 5.3.5: Payments to related parties of the Company and their associates during the quarter per Section 6.1 of the Appendix 5B totalled $126,000. This is comprised of directors' salaries and superannuation of $126,000
Health, Safety, Environment and Quality
Field operations during the period included geological reconnaissance activities, reverse-circulation drilling, field mapping, and sampling exercises across the major Cortadera and Productora landholdings, as well as new project at La Verde. Activities on new tenements are run from the Productora or Cortadera operations centres and their safety statistics are included under the figures for all projects.
There were no Lost Time Injuries (LTI) during the quarter.
Hot Chili's sustainability framework ensures an emphasis on business processes that target longterm economic, environmental and social value. The Company is dedicated to continual monitoring and improvement of health, safety and the environmental systems. There is no greater importance than ensuring the safety of our people and their families.
Table 4. HSEQ Quarter 1 2025 Performance and Statistics
| Deposit | Productora | Cortadera | All Projects | |||
|---|---|---|---|---|---|---|
| Timeframe | Q1 2025 | Cum.² | Q1 2025 | Cum.² | Q1 2025 | Cum.² |
| LTI events | 0 | 0 | 0 | 6 | 0 | 8 |
| NLTI events | 0 | 4 | 0 | 6 | 0 | 11 |
| Days lost | 0 | 0 | 0 | 152 | 0 | 263 |
| LTIFR index | 0 | 0 | 0 | 20 | 0 | 18 |
| ISR index | 0 | 0 | 0 | 510 | 0 | 599 |
| IFR Index | 0 | 44 | 0 | 40 | 0 | 43 |
| Thousands of man-hours | 3.6 | 92 | 2.5 | 298 | 21.4 | 439 |
| Incidents on materials and assets | 0 | 1 | 0 | 0 | 0 | 1 |
| Environmental incidents | 0 | 0 | 0 | 0 | 0 | 0 |
| Headcount¹ | 10 | 11 | 8 | 31 | 57 | 50 |
Notes: HSEQ is the acronym for Health, Safety, Environment and Quality. LTIFR per million-manhours. Safety performance is reported on a monthly basis to the National Mine Safety Authority on a standard E-100 form; (1) Average monthly headcount (2) Cumulative statistics since April 2019.
Tenement Changes During the Quarter
During the Quarter, Sociedad Minera La Frontera SpA ("La Frontera") has abandoned the Marsellesa option agreement and the Cometa option agreement and the mining rights have been returned to the respective owners. Furthermore, the Domeyko Option Agreement Offeror has claimed the exploitation concessions "Cazurro 3 1/60", "Cazurro 4 1/60" and "Cazurro 7 1/40" in use of the preferential right held by virtue of exploration concessions "Cazurro 3", "Cazurro 4" and "Cazurro 7" respectively. Consequently, the Domeyko Option Agreement has been amended, including the mentioned concessions and the exploitation concession called "Antonio 36 1/15".
During the same period, Sociedad Minera El Águila has claimed 2 mining exploitation concessions "Suerte 1/7" and "Suerte II 1/15", which are in process to be constituted.
The Company's existing tenements are detailed in the table below.
Table 4 Current Tenement (Patente) Holdings in Chile as of 31 March 2025
Cortadera Project Tenements
| Cortadera Project | |||||
|---|---|---|---|---|---|
| N° | License ID | HCH % Held | HCH % Earning | Area (ha) Agreement Details | |
| 1 | ALCENIA 1/10 | 100% Frontera SpA | 50 | ||
| 2 | AMALIA 942 A 1/6 | 100% Frontera SpA | 53 | ||
| 3 | ATACAMITA 1/82 | 100% Frontera SpA | 82 | ||
| 4 | CORROTEO 1 1/260 | 100% Frontera SpA | 260 | ||
| 5 | CORROTEO 5 1/261 | 100% Frontera SpA | 261 | ||
| 6 | CORTADERA 1 1/200 | 100% Frontera SpA | 200 | ||
| 7 | CORTADERA 1/40 | 100% Frontera SpA | 374 | ||
| 8 | CORTADERA 2 1/200 | 100% Frontera SpA | 200 | ||
| 9 | CORTADERA 41 | 100% Frontera SpA | 1 | ||
| 10 | CORTADERA 42 | 100% Frontera SpA | 1 | ||
| 11 | LAS CANAS 1/15 | 100% Frontera SpA | 146 | ||
| 12 | LAS CANAS 16 | 100% Frontera SpA | 1 | ||
| 13 | LAS CANAS ESTE 2003 1/30 | 100% Frontera SpA | 300 | ||
| 14 | MAGDALENITA 1/20 | 100% Frontera SpA | 100 | ||
| 15 | PAULINA 10 B 1/16 | 100% Frontera SpA | 136 | ||
| 16 | PAULINA 11 B 1/30 | 100% Frontera SpA | 249 | ||
| 17 | PAULINA 12 B 1/30 | 100% Frontera SpA | 294 | ||
| 18 | PAULINA 13 B 1/30 | 100% Frontera SpA | 264 | ||
| 19 | PAULINA 14 B 1/30 | 100% Frontera SpA | 265 | ||
| 20 | PAULINA 15 B 1/30 | 100% Frontera SpA | 200 | ||
| 21 | PAULINA 22 A 1/30 | 100% Frontera SpA | 300 | ||
| 22 | PAULINA 24 1/24 | 100% Frontera SpA | 183 | ||
| 23 | PAULINA 25 A 1/19 | 100% Frontera SpA | 156 | ||
| 24 | PAULINA 26 A 1/30 | 100% Frontera SpA | 294 | ||
| 25 | PAULINA 27A 1/30 | 100% Frontera SpA | 300 | ||
| 26 | PURISIMA 1/8 (1/2 Y 5/6) | 100% Frontera SpA | 20 | NSR 1.5% | |
| 27 | CF 1 | 100% Frontera SpA | 300 | ||
| 28 | CF 2 | 100% Frontera SpA | 300 | ||
| 29 | CF 3 | 100% Frontera SpA | 300 | ||
| 30 | CF 4 | 100% Frontera SpA | 300 | ||
| 31 | CF 5 | 100% Frontera SpA | 200 |