Annual Mineral Resources and ORE Reserves Statement
ANNUAL MINERAL RESOURCES AND ORE
RESERVES STATEMENT
PERTH, Australia
,
Sept. 27, 2024
/CNW/ - Hot Chili Limited (ASX: HCH) ("Hot Chili" or the "Company") is pleased
to release its annual Mineral Resources and Ore Reserves (MROR) statement for the Costa Fuego Project (the
"Project") as of
30 June 2024
.
Costa Fuego comprises the Cortadera, Productora,
Alice
, and
San Antonio
deposits, all of which have updated
Mineral Resource Estimates ("MRE" or "Resource") completed during the reporting period. All deposits lie proximal
to one another, at low altitude (
800 m
to
1,000 m
), approximately 600 km north of
Santiago
.
Indicated Mineral Resources
1
are estimated at
2.9 million tonnes of copper, 2.6 million ounces of gold, 12.8
million ounces of silver, and 68 thousand tonnes of molybdenum.
Inferred Mineral Resources
1
are estimated at
0.5 million tonnes of copper, 0.4 million ounces of gold, 2.3
million ounces of silver, and 12 thousand tonnes of molybdenum.
No Ore Reserves are currently reported for the Costa Fuego Project.
Key highlights
A
6% increase in copper equivalent
2
contained metal
for the combined Indicated resource (including a
9%
increase in copper equivalent
2
contained metal
for the higher-grade component of the Indicated resource
3
)
Over
85% of Costa Fuego's MRE is now classified as Indicated
The updated MRE suggests a
strong platform to support
the planned Costa Fuego Preliminary Feasibility
Study (PFS).
The MRE update follows 24 months of material investment, totalling 24.5 km of drilling across Costa Fuego; a mix
of development, metallurgical, geotechnical, resource expansion and exploration drilling, designed to progress the
Project towards its PFS and maiden Ore Reserve, expected to be completed around the end of 2024.
The Costa Fuego Mineral Resource Statement as of 30 June 2024, with an effective date of 26 February 2024, is
shown in Table 1.
1
Reported on a 100% Basis - combining Mineral Resource estimates for the Cortadera, Productora, Alice and San Antonio deposits comprising the Costa Fuego project. Figures are rounded
to nearest thousand, or if less, to the nearest hundred. Reported to appropriate significant figures and in accordance with the Joint Ore Reserves Committee Code (2012) and National Instrument 43-
101 – Standards of Disclosure for Mineral Projects ("NI 43-101"). Mineral resource estimation practices are in accordance with CIM Estimation of Mineral Resource and Mineral Reserve Best Practice
Guidelines (29 November 2019) and CIM Environmental, Social and Governance Guidelines for Mineral Resources and Mineral Reserve Estimation (8 September 2023) and reported in accordance
CIM Definition Standards for Mineral Resources and Mineral Reserves (10 May 2014) that are incorporated by reference into NI 43-101.Total Resource reported at
+0.20% CuEq for open pit and +0.27% CuEq for underground.
2
For details on how the copper equivalent grade was calculated, see Note 8 to Table 1 below.
3
The 'higher-grade' component of the Costa Fuego Mineral Resource Estimate includes material above a cut-off grade of 0.6% CuEq.
4
Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. These Mineral Resource estimates include Inferred Mineral Resources that are considered too
speculative geologically to have economic considerations applied to them that would enable them to be categorised as Mineral Reserves. It is reasonably expected that the majority of Inferred mineral
resources could be upgraded to Measured or Indicated Mineral Resources with continued exploration.
Table 1: Costa Fuego Copper-Gold Project Mineral Resource,
30 June 2024
, with an effective date of
26
February 2024
Table 1: Costa Fuego Copper-Gold Project Mineral Resource, 30 June 2024, with an effective date of 26 (CNW
Group/Hot Chili Limited)
1
Mineral Resources are reported on a 100% Basis - combining Mineral Resource estimates for the Cortadera, Productora, Alice and San Antonio deposits. All figures are rounded, reported
to appropriate significant figures and reported in accordance with the Joint Ore Reserves Committee Code (2012) and NI 43-101. Mineral Resource estimation practices are in accordance with CIM
Estimation of Mineral Resource and Mineral Reserve Best Practice Guidelines (29 November 2019) and CIM Environmental, Social and Governance Guidelines for Mineral Resources and Mineral
Reserve Estimation (8 September 2023) and reported in accordance CIM Definition Standards for Mineral Resources and Mineral Reserves (10 May 2014) that are incorporated by reference into NI
43-101.
2
The Productora deposit is 100% owned by Chilean incorporated company Sociedad Minera El Aguila SpA (SMEA). SMEA is a joint venture (JV) company – 80% owned by Sociedad Minera El Corazón
Limitada (a 100% subsidiary of Hot Chili Limited), and 20% owned by Compañía Minera del Pacífico S.A (CMP).
3
The Cortadera deposit is controlled by a Chilean incorporated company Sociedad Minera La Frontera SpA (Frontera). Frontera is a subsidiary company – 100% owned by Sociedad Minera El Corazón
Limitada, which is a 100% subsidiary of Hot Chili Limited.
4
The San Antonio deposit is controlled through Frontera (100% owned by Sociedad Minera El Corazón Limitada, which is a 100% subsidiary of Hot Chili Limited), and Frontera has an Option
Agreement to earn a 100% interest.
5
The MRE in the tables above form coherent bodies of mineralisation that are considered amenable to a combination of open pit and underground extraction methods based
on the following parameters: Base Case Metal Prices: Copper US$3.00/lb, Gold US$1,700/oz, Molybdenum US$14/lb, and Silver US$20/oz.
6
All MRE were assessed for Reasonable Prospects of Eventual Economic Extraction (RPEEE) using both Open Pit and Block Cave Extraction mining methods at Cortadera and Open Pit mining
methods at the Productora, Alice and San Antonio deposits.
7
Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. Process recoveries: Cortadera
– Weighted recoveries of 82% Cu, 55% Au, 81% Mo and 36% Ag. CuEq(%) = Cu(%) + 0.55 x
Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t). San Antonio - Weighted recoveries of 85% Cu, 66% Au, 80% Mo and 63% Ag. CuEq(%) = Cu(%) + 0.64 x Au(g/t) + 0.00044 x Mo(ppm)
+ 0.0072 x Ag(g/t). Alice - Weighted recoveries of 81% Cu, 47% Au, 52% Mo and 37% Ag. CuEq(%) = Cu(%) + 0.48 x Au(g/t) + 0.00030 x Mo(ppm) + 0.0044 x Ag(g/t). Productora – Weighted
recoveries of 84% Cu, 47% Au, 48% Mo and 18% Ag. CuEq(%) = Cu(%) + 0.46 x Au(g/t) + 0.00026 x Mo(ppm) + 0.0021 x Ag(g/t). Costa Fuego – Recoveries of 83% Cu, 53% Au, 71% Mo and 26%
Ag. CuEq(%) = Cu(%) + 0.53 x Au(g/t) + 0.00040 x Mo(ppm) + 0.0030 x Ag(g/t).
8
Copper Equivalent (CuEq) grades are calculated based on the 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 base case cut-off grade for Mineral
Resources considered amenable to open pit extraction methods at the Cortadera, Productora, Alice and San Antonio deposits is 0.20% CuEq, while the cut-off grade for Mineral Resources considered
amenable to underground extraction methods at the Cortadera deposit is 0.27% CuEq. It is the Company's opinion that all the elements included in the CuEq calculation have a reasonable potential to
be recovered and sold.
9
Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. These MRE include Inferred Mineral Resources that are considered too speculative geologically to
have economic considerations applied to them that would enable them to be categorised as Mineral Reserves. It is reasonably expected that the majority of Inferred mineral resources could be
upgraded to Measured or Indicated Mineral Resources with continued exploration.
10
The effective date of the MRE for the period ending 30 June 2024 is 26 February 2024 (the "2024 Effective Date"). Refer to ASX Announcement "Hot Chili Indicated Resource at Costa Fuego Copper-
Gold Project Increases to 798 Mt" for JORC Table 1 information in this statement related to the Costa Fuego Mineral Resource Estimate (MRE) by Competent Person Elizabeth Haren, who is also a
qualified person (within the meaning of NI 43- 101) constituting the MRE of Cortadera, Productora, Alice and San Antonio (which combine to form Costa Fuego). Hot Chili confirms it is not aware of
any new information or data that materially affects the information included in the Resource Announcement and all material assumptions and technical parameters stated for the Mineral Resource
Estimates in the Resource Announcement continue to apply and have not materially changed since the 2024 Effective Date.
11
Hot Chili Limited is not aware of political, environmental or other risks that could materially affect the potential development of the Mineral Resources, other than those common to all such projects,
including the permitting of a mining operation, access to adequate funding on reasonable terms, etc. See "Risk Factors" in the current Technical Report available on Sedar and the Forward-Looking
Statements in the Annual Report.
Commodity Price Assumptions
Commodity price assumptions used to estimate the 30 June 2024 Mineral Resources are provided below:
Copper
:
US$3.00
/lb
Gold
:
US$1,700
/oz
Silver
:
US$20
/oz
Molybdenum
:
US$14
/lb
Cut Off Grade and Reporting Copper Price Analysis
Following release of the Company's Preliminary Economic Assessment (PEA)
2
in
June 2023
, a review of MRE
appropriate CuEq Cut-off Grades (COG) was completed, with revisions to long-term consensus copper price
assumptions and breakeven grade assessments considered.
The long-term consensus copper price assumption changed from
US$3.30
/lb Cu in 2022, to
US$3.85
/lb Cu in
2024. The change in copper price, in combination with the latest costs, as informed by the Company's PEA in
June
2023
, has reduced the breakeven grade for the Costa Fuego Project.
The revised COGs reflect these changes in assumptions and have been set appropriately higher than the
calculated breakeven grade.
These key assumptions in relation to COGs are summarised in Table 2.
Table 2. Summary of Cut-Off Grades and Copper Price changes
Table 2. Summary of Cut-Off Grades and Copper Price changes (CNW Group/Hot Chili Limited)
1
Copper Equivalent (CuEq) grades are calculated based on the formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per
g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu recovery). Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are
weighted to combine sulphide flotation and oxide leaching performance. Process recoveries: Cortadera – Weighted recoveries of 82% Cu,
55% Au, 81% Mo and 36% Ag. CuEq(%) = Cu(%) + 0.55 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t). San Antonio - Weighted
recoveries of 85% Cu, 66% Au, 80% Mo and 63% Ag. CuEq(%) = Cu(%) + 0.64 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0072 x Ag(g/t). Alice - Weighted recoveries of 81% Cu, 47% Au, 52% Mo and 37%
Ag. CuEq(%) = Cu(%) + 0.48 x Au(g/t) + 0.00030 x Mo(ppm) + 0.0044 x Ag(g/t). Productora – Weighted recoveries of 84% Cu, 47% Au, 48% Mo and 18% Ag. CuEq(%) = Cu(%) + 0.46 x Au(g/t) +
0.00026 x Mo(ppm) + 0.0021 x Ag(g/t). Costa Fuego – Recoveries of 83% Cu, 53% Au, 71% Mo and 26% Ag. CuEq(%) = Cu(%) + 0.53 x Au(g/t) + 0.00040
x Mo(ppm) + 0.0030 x Ag(g/t). Base Case Metal Prices: Copper US$ 3.00/lb, Gold US$ 1,700/oz, Molybdenum US$ 14/lb, and Silver US$20/oz. It is the Company's opinion that all the elements included
in the CuEq calculation have a reasonable potential to be recovered and sold
2
The preliminary economic assessment (the "PEA") relating to the disclosure in this Document has been posted on the Company's website at
www.hotchili.net.au
and filed on SEDAR+ (
www.sedarplus.ca)
under the Company's issuer profile. For readers to fully understand the
information in this Presentation, they should read the PEA in its entirety, including all qualifications, assumptions, limitations and exclusions
that relate to the information set out in this Presentation that qualifies the technical information contained in the PEA. The PEA is intended to be read as a whole, and sections should not be read or
relied upon out of context. The technical information in this Presentation is subject to the assumptions and qualifications contained in the PEA. The Company confirms that all material assumptions
underpinning the production targets and forecast financial information in the PEA continue to apply and have not materially changed with the release of the updated Mineral Resource Estimate.
Approval
Hot Chili's Managing Director and Chief Executive Officer Mr
Christian Easterday
is responsible for this
announcement and has provided sign-off for release to the ASX and TSXV.
For more information please contact:
Christian
Easterday
Managing Director – Hot Chili
Tel: +61 8 9315 9009
Email:
Carol Marinkovich
Company Secretary – Hot Chili
Tel: +61 8 9315 9009
Email:
49 North Investor Relations
Email:
or visit Hot Chili's website at
www.hotchili.net.au
Qualifying Statements
Qualified Persons – NI 43-101
The information pertaining to the MRE included in this Mineral Resource and Ore Reserve Statement has been
reviewed and approved by Ms.
Elizabeth Haren
(FAUSIMM (CP) & MAIG) of Haren Consulting Pty Ltd. Ms. Haren
is considered to be "independent" of Hot Chili under Section .5 of NI 43-101. All other scientific and technical
information in this statement has been reviewed and approved by Mr
Christian Easterday
, MAIG, Hot Chili's
Managing Director and Chief Executive Officer. Each of Ms. Haren and Mr. Easterday are a qualified person within
the meaning of NI 43-101.
Competent Persons – JORC and ASX
The information in this Mineral Resource and Ore Reserve Statement that relates to Mineral Resources for
Cortadera, Productora,
Alice
, and
San Antonio
which constitute the combined Costa Fuego Project is based on and
fairly represents information and supporting documentation compiled by Ms Elizabeth Haren, a Competent Person
who is a Member and Chartered Professional of The Australasian Institute of Mining and Metallurgy and a Member
of the Australian Institute of Geoscientists. Ms Haren is a full-time employee of Haren Consulting Pty Ltd and an
independent consultant to Hot Chili. Ms Haren has sufficient experience, which is relevant to the style of
mineralisation and types of deposits under consideration and to the activities undertaken, to qualify as a Competent
Person as defined in the 2012 Edition of the 'Australasian Code of Reporting of Exploration Results, Mineral
Resources and Ore Reserves'. Ms Haren consents to the inclusion in this statement of the matters based on her
information in the form and context in which it appears.
This Mineral Resources and Ore Reserves Statement is based on, and fairly represents, information and
supporting documentation prepared by Mr
Christian Easterday
, MAIG, Hot Chili's Managing Director. This
statement as a whole has been approved by Mr Easterday who consents to the inclusion of this statement in the
Company's Annual Report in the form and context in which it appears.
Cautionary Note for U.S. Investors Concerning Mineral Resources
NI 43-101 is a rule of the Canadian Securities Administrators which establishes standards for all public disclosure
an issuer makes of scientific and technical information concerning mineral projects. Technical disclosure contained
in this MROR statement has been prepared in accordance with NI 43-101 and the Canadian Institute of Mining,
Metallurgy and Petroleum Classification System. These standards differ from the requirements of the U.S.
Securities and Exchange Commission ("SEC") and resource information contained in this MROR statement may not
be comparable to similar information disclosed by domestic United States companies subject to the
SEC's reporting and disclosure requirements.
All amounts in this MROR statement are in U.S. dollars unless otherwise noted.
Forward Looking Statements
This MROR statement contains certain statements that are "forward-looking information" within the meaning of
Canadian securities legislation and Australian securities legislation (each, a "forward-looking statement"). All
statements other than statements of historical fact are forward-looking statements. The use of any of the words
"believe", "could", "estimate", "expect", "expected", "may", "plan", "planned", "potential", "should", "suggested",
"will", "would", and variants of these words, and similar expressions are intended to identify forward-looking
statements. The forward-looking statements within this MROR statement are based on information currently
available and what management believes are reasonable assumptions. Forward-looking statements speak only as
of the date of this MROR statement. In addition, this MROR statement may contain forward-looking statements
attributed to third-party industry sources, the accuracy of which has not been verified by the Company.
In this MROR statement, forward-looking statements relate to practices including (a) Mineral Resource estimation,
(b) preliminary mine design, and (c) the undertaking of studies including the Preliminary Feasibility Study (PFS),
among other things. (a) Mineral resource estimation includes the results of completed programs of sampling,
including drilling and pulp resampling in this statement, to convert Inferred mineral resources to Indicated, to extend
Mineral Resources and to identify new deposits, and the Company's ability to convert Mineral Resources to Mineral
Reserves. Assumptions and methodology employed within Mineral Resource estimation that have a material impact
on the reported results include metal prices, forecast and modelled metal recoveries, mining, processing, and
shipping methods and costs, and Mineral Resource estimation practices. (b) Preliminary mine design refers to the
models for reasonable eventual economic extraction for the mineral resource and in this statement includes Open
Pit and Underground methods. In addition to the assumptions made in the mineral resource, material factors include
geotechnical models, and historic or current workings. (c). The undertaking of studies includes consideration of the
timing and outcomes of regulatory processes required to obtain permits for the development and operation of the
Costa Fuego Project and/or future planned economic studies, whether or not the Company will make a
development decision and the timing thereof, the ability of the Company to complete the PFS on the timeline
indicated or at all, and the involvement of contributing third parties such as consultants and subject matter experts.
The forward-looking statements within this MROR statement are based on information currently available and what
management believes are reasonable assumptions. Forward-looking statements speak only as of the date of
this MROR statement. In addition, this MROR statement may contain forward-looking statements attributed to
third-party industry sources, the accuracy of which has not been verified by the Company.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause
the actual results, performance, or achievements of the Company to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking statements. A number of factors could
cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-
looking statements in this MROR statement, including, but not limited to, the following material factors: operational
risks; risks related to the cost estimates of exploration; sovereign risks associated with the Company's operations
in
Chile
; changes in estimates of mineral resources of properties where the Company holds interests; recruiting
qualified personnel and retaining key personnel; future financial needs and availability of adequate financing;
fluctuations in mineral prices; market volatility; exchange rate fluctuations; ability to exploit successful discoveries;
the production at or performance of properties where the Company holds interests; ability to retain title to mining
concessions; environmental risks; financial failure or default of joint venture partners, contractors or service
providers; competition risks; economic and market conditions; and other risks and uncertainties described
elsewhere in this MROR statement and elsewhere in the Company's public disclosure record.
Although the forward-looking statements contained in this MROR statement are based upon assumptions which the
Company believes to be reasonable, the Company cannot assure investors that actual results will be consistent
with these forward-looking statements. With respect to forward-looking statements contained in this MROR
statement, the Company has made assumptions regarding: future commodity prices and demand; availability of
skilled labour; timing and amount of capital expenditures; future currency exchange and interest rates; the impact of
increasing competition; general conditions in economic and financial markets; availability of drilling and related
equipment; effects of regulation by governmental agencies; future tax rates; future operating costs; availability of
future sources of funding; ability to obtain financing; and assumptions underlying estimates related to adjusted
funds from operations. The Company's actual results, performance or achievement could differ materially from
those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given
that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so,
what benefits the Company will derive therefrom.
For additional information with respect to these and other factors and assumptions underlying the forward-looking
statements made herein, please refer to the public disclosure record of the Company, including the Company's
most recent Annual Report, which is available on SEDAR+ (
www.sedarplus.ca)
under the Company's issuer profile. New factors emerge from time to time, and it is not possible for management
to predict all those factors or to assess in advance the impact of each such factor on the Company's business or
the extent to which any factor, or combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statement.
The forward-looking statements contained in this MROR statement are expressly qualified by the foregoing
cautionary statements and are made as of the date of this MROR statement. Except as may be required by
applicable securities laws, the Company does not undertake any obligation to publicly update or revise any
forward-looking statement to reflect events or circumstances after the date of this MROR statement or to reflect
the occurrence of unanticipated events, whether as a result of new information, future events or results, or
otherwise.
Cautionary Statement – JORC Code (2012)
The Preliminary Economic Assessment referred to in this MROR Statement 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. 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") 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. 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, sale of further royalties and/or streaming rights, sale of non-committed offtake rights, and sale of non-core assets.
For readers to fully understand the information in this MROR Statement, they should read the PEA Technical Report (available on
www.SEDAR.com
or at
www.hotchili.net.au)
in its entirety, including all
qualifications, assumptions and exclusions that relate to the information set out in this MROR Statement that qualifies the technical information contained in the Technical Report. The Technical Report is
intended to be read as a whole, and sections should not be read or relied upon out of context. The technical information in this MROR Statement is subject to the assumptions and qualifications contained in
the Report.
This MROR Statement 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.
Productora Project
Tenements
The Productora Project is 100% owned by a Chilean incorporated company named Sociedad Minera El Aguila SpA
(SMEA). SMEA is a Joint Venture company, 80% owned by Sociedad Minera El Corazón Limitada (a 100%
subsidiary of Hot Chili Limited), and 20% owned by CMP Productora (a 100% subsidiary of Compañía Minera del
Pacífico S.A) (CMP).
The Joint Venture agreement provided access to key infrastructure as well as securing an experienced major
Chilean partner with substantial operational, financial and development capability. CMP previously had an Option
to increase its stake in Productora to 50.1% following
completion of the Definitive Feasibility Study (DFS). However, in
March 2016
Hot Chili completed the Productora
PFS and CMP did not elect at the time to exercise its Option. Hot Chili has since repaid CMP the Option fee and
CMP has accepted the payment, removing all requirements over Productora.
There were no tenement changes that had a material impact on the Mineral Resources or Ore Reserves during the
reporting period.
Mining Activity
There were no mining activities in the 12 months to
30 June 2024
. There has been no depletion of the current
publicly reported Mineral Resource.
Mineral Resources
The Productora MRE (breccia hosted copper-gold deposit) has been updated during the period covered by this
MROR statement. The update follows the addition of 16 Reverse Circulation and Diamond Drill exploration
drillholes for
5,000 m
(including four metallurgical drillholes), a large pulp resampling campaign for silver and soluble
copper assays, and a new approach to estimating the oxide and transitional weathering domains.
Immaterial positive changes were reported for the Productora Indicated MRE copper and gold contained metal, as
well as an additional 2.8 Moz of silver metal at 0.35 g/t, which has now been incorporated into the CuEq contained
metal, in line with the approach across other Costa Fuego MREs.
The current Productora MRE was publicly released on
26 February 2024
with an effective date of
26 February
2024
, and supersedes the previous MRE, released
31 March 2022
with an effective date of
31 March 2022
.
Previously, the Alice MRE has been combined with the Productora MRE due to their proximal locations. Therefore,
the Productora MRE with an effective date of
31 March 2022
as presented below will differ from the Productora
MRE as disclosed on
31 March 2022
. The decision to separate was based on their differing geological settings
and mineralisation styles.
A comparison between reporting periods is provided in Table 3 below.
Table 3: Comparison of Productora MRE between 30 June 2023 and
30 June 2024
Reporting Periods
Productora Project Mineral Resource at 30 June 2023
Grade
Contained Metal
Classification
Tonnes
CuEq
Cu
Au
Ag
Mo
Copper Eq
5
Copper
Gold
Silver
Molybdenum
(+0.21% CuEq
5
)
(Mt)
( %)
( %)
(g/t)
(g/t)
(ppm)
(tonnes)
(tonnes)
(ounces)
(ounces)
(tonnes)
Indicated
236
0.50
0.42
0.08
0.00
147
1,180,000
980,000
631,000
-
34,800
M+I Total
236
0.50
0.42
0.08
0.00
147
1,180,000
980,000
631,000
-
34,800
Inferred
87
0.34
0.29
0.03
0.00
76
290,000
250,000
88,000
-
6,700
Productora Project Mineral Resource at 30 June 2024
Grade
Contained Metal
Classification
Tonnes
CuEq
Cu
Au
Ag
Mo
Copper Eq
6
Copper
Gold
Silver
Molybdenum
(+0.20% CuEq
6
)
(Mt)
( %)
( %)
(g/t)
(g/t)
(ppm)
(tonnes)
(tonnes)
(ounces)
(ounces)
(tonnes)
Indicated
248
0.49
0.41
0.08
0.35
140
1,210,000
1,020,000
668,000
2,760,000
34,600
M+I Total
248
0.49
0.41
0.08
0.35
140
1,210,000
1,020,000
668,000
2,760,000
34,600
Inferred
52
0.36
0.31
0.07
0.27
92
190,000
160,000
110,000
450,000
4,800
1
Mineral Resources are reported on a 100% Basis. All figures are rounded, reported to appropriate significant figures and reported in accordance with the Joint Ore Reserves Committee Code (2012)
and NI 43-101. Mineral resource estimation practices are in accordance with CIM Estimation of Mineral
Resource and Mineral Reserve Best Practice Guidelines (29 November 2019) and CIM Environmental, Social and Governance Guidelines for Mineral Resources and Mineral Reserve Estimation (8
September 2023) and reported in accordance CIM Definition Standards for Mineral Resources and Mineral Reserves (10 May 2014) that are incorporated by reference into NI 43-101.
2
The Productora deposit is 100% owned by Chilean incorporated company Sociedad Minera El Aguila SpA (SMEA). SMEA is a joint venture (JV) company – 80% owned by Sociedad Minera El Corazón
Limitada (a 100% subsidiary of Hot Chili Limited), and 20% owned by Compañía Minera del Pacífico S.A (CMP).
3
The MRE in the tables above form coherent bodies of mineralisation that are considered amenable to open pit extraction methods based on the following parameters: Base Case Metal Prices: Copper
US$3.00/lb, Gold US$1,700/oz, Molybdenum US$14/lb, and Silver US$20/oz.
4
The Productora MRE was assessed for Reasonable Prospects of Eventual Economic Extraction (RPEEE) using an Open Pit mining method. Metallurgical recovery averages for Productora consider
Indicated and Inferred material and are weighted to combine sulphide flotation and oxide leaching performance.
5
Resource Copper Equivalent (CuEq) grades for the period ending 30 June 2023 are calculated based on the 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 base case cut-off grade
for mineral resources considered amenable to open pit extraction methods at the Productora deposit is 0.21% CuEq. Weighted recoveries of 84% Cu, 47% Au, 47% Mo and 0% Ag (not reported)
were used. CuEq(%)
= Cu(%) + 0.46 x Au(g/t) + 0.00026 x Mo(ppm).
6
Resource Copper Equivalent (CuEq) grades for the period ending 30 June 2024 are calculated based on the 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 base case cut-off grade for Mineral Resources considered amenable to open pit extraction methods at Productora is 0.20% CuEq. Weighted recoveries of 84% Cu, 47% Au, 48% Mo
and 18% Ag were used. CuEq(%) = Cu(%) + 0.46 x Au(g/t) + 0.00027 x Mo(ppm) + 0.0021 x Ag(g/t).
7
Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. These Mineral Resource estimates include Inferred Mineral Resources that are considered too
speculative geologically to have economic considerations applied to them that would enable them to be categorised as Mineral Reserves. It is reasonably expected that the majority of Inferred mineral
resources could be upgraded to Measured or Indicated Mineral Resources with continued exploration.
8
The effective date of the estimate of MRE for the period ending 30 June 2023 is 31 March 2022 (the "2023 Effective Date"). Refer to ASX
Announcement "Hot Chili Delivers Next Level of Growth" ("Resource Announcement") for JORC Table 1 information related to the Costa Fuego Mineral Resource Estimate (MRE) by Competent
Person Elizabeth Haren, who is also a qualified person (within the meaning of NI 43-101) constituting the MREs of Cortadera, Productora, Alice and San Antonio (which combine to form Costa Fuego).
Previously, the Alice MRE has been combined with the Productora MRE due to their proximal locations. Therefore, the Productora MRE with an effective date of 31 March 2022 as presented
below will differ from the Productora MRE as disclosed on 31 March 2022. The decision to separate was based on their differing geological settings and mineralisation
styles. Hot Chili confirms it is not aware of any new information or data that materially affects the information included in the Resource Announcement and all material assumptions and technical
parameters stated for the Mineral Resource Estimates in the Resource Announcement continue to apply and have not materially changed since the 2023 Effective Date.
9
The effective date of the MRE for the period ending 30 June 2024 is 26 February 2024 (the "2024 Effective Date"). Refer to ASX Announcement "Hot Chili Indicated Resource at Costa Fuego Copper-
Gold Project Increases to 798 Mt" for JORC Table 1 information in this announcement related to the Costa Fuego Mineral Resource Estimate (MRE) by Competent Person Elizabeth Haren, who is
also a qualified person (within the meaning of NI 43- 101) constituting the MREs of Cortadera, Productora, Alice and San Antonio (which combine to form Costa Fuego). Hot Chili confirms it is not
aware of any new information or data that materially affects the information included in the Resource Announcement and all material assumptions and technical parameters stated for the Mineral
Resource Estimates in the Resource Announcement continue to apply and have not materially changed since the 2024 Effective Date.
10
Hot Chili Limited is not aware of political, environmental or other risks that could materially affect the potential development of the Mineral Resources, other than those common to all such projects,
including the permitting of a mining operation, access to adequate funding on reasonable terms, etc. See "Risk Factors" in the current Technical Report available on Sedar and the Forward-Looking
Statements in the Annual Report.
Cortadera Project
Tenements
Hot Chili owns the Cortadera Project through its 100% subsidiary company Frontera SpA. Hot Chili controls an
area measuring approximately 12.5 km north-south by 5 km east-west at the project through various 100%
purchase option agreements with private land holders.
There were no tenement changes that had a material impact on the Mineral Resources during the reporting period.
Mining Activity
There were no mining activities in the 12 months to
30 June 2024
. There has been no depletion of the current
publicly reported Mineral Resource.
Mineral Resources
The Cortadera MRE (porphyry copper-gold deposit) has been updated during the period covered by this MROR
statement.
The Company completed 43 RC holes with DD tails for 17,000 m of additional exploration and resource extension
drilling at Cortadera, including six development drillholes.
Cortadera is defined by over
108,000 m
of drilling and contains an Indicated Resource of
531 Mt
grading 0.44%
CuEq (previously 471 Mt grading 0.46% CuEq) and an Inferred Resource of
149 Mt
grading 0.29% CuEq
(previously
108 Mt
grading 0.35% CuEq).
Cortadera's Indicated Resource tonnage has grown by a further 13%, further supporting the Company's June 2023
Preliminary Economic Assessment (PEA), which outlined Costa Fuego as having the potential to be one of the
world's lowest capital intensity major copper developments.
The Cortadera MRE is split into an Open Pit and Underground Mineral Resource with differing cut-off grades used,
dependent on the likely style of mining. This is consistent with the reporting of the Cortadera MRE for the previous
reporting period.
The current Cortadera MRE was publicly released on
26 February 2024
, with an effective date of
26 February
2024
, and supersedes the previous MRE, released
31 March 2022
with an effective date of
31 March 2022
.
A comparison of the total Cortadera MRE, being combined Open Pit and Underground Mineral
Resources, between reporting periods is provided in Table 4 below.
Table 4: Comparison of Cortadera MRE between 30 June 2023 and
30 June 2024
Reporting Periods
Cortadera Project Mineral Resource at 30 June 2023
Grade
Contained Metal
+0.21% CuEq
5
(OP)
Tonnes
CuEq
Cu
Au
Ag
Mo
Copper Eq
Copper
Gold
Silver
Molybdenum
+0.30% CuEq
5
(UG)
(Mt)
( %)
( %)
(g/t)
(g/t)
(ppm)
(tonnes)
(tonnes)
(ounces)
(ounces)
(tonnes)
M+I Total
471
0.46
0.36
0.12
0.69
68
2,161,000
1,680,000
1,843,000
10,509,000
32,200
Inferred
471
0.46
0.36
0.12
0.69
68
2,161,000
1,680,000
1,843,000
10,509,000
32,200
Inferred
108
0.35
0.28
0.08
0.50
62
379,000
301,000
274,000
1,749,000
6,700
Cortadera Project Mineral Resource at 30 June 2024
Grade
Contained Metal
+0.20% CuEq
6
(OP)
Tonnes
CuEq
Cu
Au
Ag
Mo
Copper Eq
Copper
Gold
Silver
Molybdenum
+0.27% CuEq
6
(UG)
(Mt)
( %)
( %)
(g/t)
(g/t)
(ppm)
(tonnes)
(tonnes)
(ounces)
(ounces)
(tonnes)
M+I Total
531
0.44
0.34
0.11
0.58
62
2,320,000
1,810,000
1,960,000
9,890,000
32,800
Inferred
531
0.44
0.34
0.11
0.58
62
2,320,000
1,810,000
1,960,000
9,890,000
32,800
Inferred
149
0.30
0.23
0.06
0.38
52
440,000
346,000
306,000
1,830,000
7,700
1
Mineral Resources are reported on a 100% Basis. All figures are rounded, reported to appropriate significant figures and reported in accordance with the Joint Ore Reserves Committee Code (2012)
and NI 43-101. Mineral resource estimation practices are in accordance with CIM Estimation of Mineral
Resource and Mineral Reserve Best Practice Guidelines (29 November 2019) and CIM Environmental, Social and Governance Guidelines for Mineral Resources and Mineral Reserve Estimation (8
September 2023) and reported in accordance CIM Definition Standards for Mineral Resources and Mineral Reserves (10 May 2014) that are incorporated by reference into NI 43-101.
2
The Cortadera deposit is controlled by a Chilean incorporated company Sociedad Minera La Frontera SpA (Frontera). Frontera is a subsidiary company – 100% owned by Sociedad Minera El Corazón
Limitada, which is a 100% subsidiary of Hot Chili Limited.
3
The MRE in the tables above form coherent bodies of mineralisation that are considered amenable to open pit and underground extraction methods based on the following parameters: Base Case
Metal Prices: Copper US$3.00/lb, Gold US$1,700/oz, Molybdenum US$14/lb, and Silver US$20/oz.
4
The Cortadera MRE was assessed for Reasonable Prospects of Eventual Economic Extraction (RPEEE) using both Open Pit and Underground mining methods. Metallurgical recovery averages
for Cortadera consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance.
5
Resource Copper Equivalent (CuEq) grades for the period ending 30 June 2023 are calculated based on the 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 base case cut-off grade
for mineral resources considered amenable to open pit extraction methods at the Cortadera deposit is 0.21% CuEq while the cut-off grade for Mineral Resources considered amenable to underground
extraction methods at the Cortadera deposit is 0.30% CuEq. Weighted recoveries of 82% Cu, 55% Au, 81% Mo and 36% Ag were used. CuEq(%) = Cu(%) +
0.55 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t).
6
Resource Copper Equivalent (CuEq) grades for the period ending 30 June 2024 are calculated based on the 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 base case cut-off grade for Mineral Resources considered amenable to open pit extraction methods at Cortadera is 0.20% CuEq while the cut-off grade for Mineral
Resources considered amenable to underground extraction methods at the Cortadera deposit is 0.27% CuEq. Weighted recoveries of 82% Cu, 55% Au, 81% Mo and 36% Ag were used. CuEq(%) =
Cu(%) + 0.55 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t).
7
Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. These Mineral Resource estimates include Inferred Mineral Resources that are considered too
speculative geologically to have economic considerations applied to them that would enable them to be categorised as Mineral Reserves. It is reasonably expected that the majority of Inferred mineral
resources could be upgraded to Measured or Indicated Mineral Resources with continued exploration.
8
The effective date of the estimate of Mineral Resources for the period ending 30 June 2023 is 31 March 2022 (the "2023 Effective Date"). Refer to ASX Announcement "Hot Chili Delivers Next Level of
Growth" ("Resource Announcement") for JORC Table 1 information related to the Costa Fuego Mineral Resource Estimate (MRE) by Competent Person
Elizabeth Haren, who is also a qualified person (within the meaning of NI 43-101) constituting the MREs of Cortadera, Productora, Alice and San Antonio (which combine to form Costa Fuego). Hot
Chili confirms it is not aware of any new information or data that materially affects the information included in the Resource Announcement and all material assumptions and technical parameters
stated for the Mineral Resource Estimates in the Resource Announcement continue to apply and have not materially changed since the 2023 Effective Date.
9
The effective date of the estimate of Mineral Resources for the period ending 30 June 2024 is 26 February 2024 (the "2024 Effective Date"). Refer to ASX Announcement "Hot Chili Indicated Resource
at Costa Fuego Copper-Gold Project Increases to 798 Mt" for JORC Table 1 information in this announcement related to the Costa Fuego Mineral Resource Estimate (MRE) by Competent Person
Elizabeth Haren, who is also a qualified person (within the meaning of NI 43-101) constituting the MREs of Cortadera, Productora, Alice and San Antonio (which combine to form Costa Fuego). Hot
Chili confirms it is not aware of any new information or data that materially affects the information included in the Resource Announcement and all material assumptions and technical parameters
stated for the Mineral Resource Estimates in the Resource Announcement continue to apply and have not materially changed since the 2024 Effective Date.
10
Hot Chili Limited is not aware of political, environmental or other risks that could materially affect the potential development of the Mineral Resources, other than those common to all such projects,
including the permitting of a mining operation, access to adequate funding on reasonable terms, etc. See "Risk Factors" in the current Technical Report available on Sedar and the Forward-Looking
Statements in the Annual Report.
San Antonio Project
Tenements
Hot Chili, through its 100% owned subsidiary Sociedad Minera Frontera SpA ("Frontera") was, in December 2023,
granted the right to purchase 100% interest in the privately owned El Fuego landholding (containing the San Antonio
Project), by making the following payments:
US$300,000
paid
30 September 2023
(already satisfied)
US$1,000,000
payable
30 September 2024
US$1,000,000
payable
30 September 2025
US$2,000,000
payable at Frontera's election by
30 September 2026
to exercise the El Fuego Option.
If the option is not abandoned, additional payments of up to US$4,000,000 are conditional on the following matters:
Additional payment of
US$2,000,000
, if the copper price average
US$5.00
/lb or above for a period of 12
consecutive months, within a period that expires
1 January 2030
.
Additional payment
US$2,000,000
, if an independently estimated JORC compliant Mineral Resource is
reported by Hot Chili or its subsidiaries containing 200 million tonnes or greater within the El Fuego
landholdings, within a period that expires
1 January 2030
. Such Mineral Resource shall be reported at or
above cut-off grades as follows: +0.21% copper equivalent for open pit and +0.30% CuEq for underground.
An additional payment is to be made by
March 2027
, if compliance of the condition that justifies payment is
verified until
30 September 2026
. From
October 2026
, payment is to be paid within 70 days after the relevant
condition is satisfied.
Mining Activity
Mining rights are leased by the owner to a third party, with an annual cap of 50,000 tonnes of ore (limited to the
mining rights
San Antonio
1 al 5;
Santiago
15 al 19;
Santiago
1 al 14/20; San Juan Sur 1 al and San Juan Sur 6 al
23). The 50,000 tonnes per annum cap constitutes less than 1% of the combined Indicated and Inferred resource
at
San Antonio
.
Mineral Resources
A
San Antonio
(high-grade copper skarn) MRE update completed during the period covered by this MROR
statement included an additional 16 drillholes (
2,500 m
), including three DD metallurgical drillholes, designed to
potentially update the Classification from Inferred to Indicated .
Additional mapping and sampling were also completed to validate the higher-grade copper mineralisation exposed
at surface. This additional information resulted in 3 Mt grading 0.71% CuEq being converted to Indicated
Classification, from the previously Inferred Resource of 4 Mt grading 1.15% CuEq.
The current San Antonio MRE was publicly released on
26 February 2024
, with an effective date of
26 February
2024
, and supersedes the previous MRE, released
31 March 2022
with an effective date of
31 March 2022
.
A comparison between reporting periods is provided in Table 5 below.
Table 5: Comparison of San Antonio MRE between 30 June 2023 and
30 June 2024
Reporting Periods
San Antonio Project Mineral Resource at 30 June 2023
Grade
Contained Metal
Classification
Tonnes
CuEq
Cu
Au
Ag
Mo
Copper Eq
Copper
Gold
Silver
Molybdenum
(+0.21% CuEq
5
)
(Mt)
( %)
( %)
(g/t)
(g/t)
(ppm)
(tonnes)
(tonnes)
(ounces)
(ounces)
(tonnes)
Indicated
-
-
-
-
-
-
-
-
-
-
-
M+I Total
-
-
-
-
-
-
-
-
-
-
-
Inferred
4
1.2
1.1
0.01
2.1
2
48,100
47,400
2,000
287,400
6
San An