Hot Chili Arranges A$29.9 Million Funding to Accelerate Costa Fuego Copper Hub, Chile
Hot Chili Arranges A$29.9 Million Funding to
Accelerate Costa Fuego Copper Hub, Chile
/NOT FOR DISTRIBUTION TO
UNITED STATES
NEWSWIRE SERVICES OR FOR
DISSEMINATION IN
THE UNITED STATES
/
Positioning for Near-Term, Meaningful, Copper Production
Highlights
A$24.9M
private placement received strong demand from Australian, Canadian and overseas
institutional investors, as well as existing shareholders
Company to undertake a share purchase plan to eligible existing shareholders under the same
offer price as the placement to raise up to an additional
A$5M
Upon completion of the capital raise, the Company will be fully funded to deliver the following
key milestones in the growth and development of the Costa Fuego copper-gold project, located
in the coastal range of
Chile
:
Completion of Costa Fuego pre-feasibility study, expected in H2 2024
Advance Water Supply Study and creation of new water company, expected in H2 2024
Up to
25,000m
of drilling, exploration and further land consolidation over next 18 months
Commencement of a bankable feasibility study over next 18 months
Further updates expected as the Company accelerates its growth and development plan with
strengthened treasury and a rising copper price environment
PERTH, Australia
,
May 6, 2024
/CNW/ - Hot Chili Limited (ASX: HCH) (TSXV: HCH) (OTCQX:
HHLKF) ("Hot Chili" or the "Company") is pleased to announce that it has successfully arranged a
A$24.9 million
private placement to institutional and professional investors through the issue of
24,900,000 new fully paid ordinary shares ("Shares") at an offer price of
A$1.00
per Share (the
"Placement").
Veritas Securities Limited and Cormark Securities Inc. acted as joint lead managers (together, the
"JLMs"), and BMO Capital Markets and Beacon Securities Limited acted as co-managers to the
Placement. The Placement received strong demand from Australian, Canadian, and overseas
institutional and other investors as well as existing shareholders.
In addition to the Placement, the Company will offer to all eligible shareholders the opportunity to
participate in a Share Purchase Plan ("SPP") to raise up to
A$5 million
at the same offer price as the
Placement (
A$1.00
per Share).
The Placement and the SPP aim to increase Hot Chili's trading liquidity on the TSXV and provide all
of the Company's eligible shareholders with access to the same offer price.
Proceeds from the Placement and SPP, in addition to existing treasury, will provide up to 18 months
funding to be used for the completion of the Costa Fuego Pre-Feasibility Study, completion of the
Water Supply Business Case Study, completion of the Costa Fuego Environmental Impact
Assessment, ongoing exploration, drilling and consolidation activities, and for general working capital
purposes.
Hot Chili's Managing Director
Christian Easterday
said:
"We control large-scale assets in two of the
most critical commodities of our time – copper and water – with two of the most desirable attributes
– low-risk and near-term.
"
The Company has been receiving increasing interest from potential strategic funding parties in its
advanced Costa Fuego copper-gold development and its recently announced Water Supply
Studies. This interest, in combination with a rising copper price environment, provides confidence
to accelerate the Company's growth and development plans while preserving control of these
assets for our shareholders."
"The Placement and Share Purchase Plan maintain the Company's strategic funding optionality,
while ensuring Costa Fuego remains one of a limited number of globally significant copper
developments, not owned by a major mining company, that could deliver meaningful new copper
supply this decade."
"Market conditions are indicative of the initial stages of a new copper price cycle being driven by a
lack of new supply. The Company is now well funded to take advantage of controlling the right
assets at the right time in the right place."
Details of the Placement
The Company has arranged a Placement of 24,900,000 Shares to raise
A$24.9 million
(before
costs). The Placement will be completed in
Australia
under an offer to investors who qualify as
professional or sophisticated investors under sections 708(8), (10) and (11) of the
Corporations Act
2001
(Cth), and in
Canada
by way of private placement in reliance on the "listed issuer financing
exemption" from the prospectus requirements (the "LIFE Exemption") available under Part 5A of
National Instrument 45-106 – Prospectus Exemptions ("NI 45-106") in each of the provinces and
territories of
Canada
, other than
Quebec
, for aggregate gross proceeds of
C$6,897,500
(A$7,750,000)
or 7,750,000 Shares (the "Canadian Offering"). The Shares issued pursuant to the
LIFE Exemption under the Canadian Offering will not be subject to a hold period pursuant to
applicable Canadian securities laws. There is an offering document related to the Canadian Offering
that can be accessed on SEDAR+ (
www.sedarplus.ca
) under the Company's profile and on the
Company's website at
www.hotchili.net.au
. Prospective investors in the Canadian Offering should
read the offering document before making an investment decision.
The Shares under the Placement may also be offered in
the United States
pursuant to available
exemptions from the registration requirements of the United States Securities Act of 1933, as
amended, ("1933 Act"), and applicable state securities laws, and in those other jurisdictions outside
of
Australia
,
Canada
and
the United States
provided it is understood that no prospectus filing or
comparable obligation, ongoing reporting requirement or requisite regulatory or governmental
approval arises in such other jurisdictions.
The new Shares will be issued within the Company's 25% placement capacities under Australian
Securities Exchange ("ASX") listing rules 7.1 and 7.1A.
Shares under the Placement will be issued at a price of
A$1.00
(C$0.89)
each and will rank equally
with all other Shares currently on issue. The issue price of
A$1.00
per Share represents an
approximate 20% discount to the Company's last closing price and an approximate 18.6% discount
to the 10-day volume weighted average price of Hot Chili shares traded on ASX prior to the
Company entering into a trading halt on
1 May 2024
.
The issue of the Shares under the Placement is expected to occur on
9 May 2024
, or on such other
date as the Company and the JLMs may agree.
Details of the Share Purchase Plan
In addition to the Placement, Hot Chili will offer existing eligible shareholders ("Eligible
Shareholders") with a registered address in
Australia
or
New Zealand
who were holders of Shares
on the ASX at
5.00pm (WST) on Friday
,
3 May 2024
("Record Date"), the opportunity to subscribe
for up to 5,000,000 new Shares ("SPP Shares") at the same price as the Placement (being
A$1.00
per Share) by way of an SPP offer without incurring brokerage fees to raise up to
A$5 million
("SPP
Offer").
Eligible Shareholders will have the opportunity to apply for up to
A$30,000
worth of SPP Shares.
The SPP Shares will rank equally with Hot Chili's existing Shares on issue. Hot Chili retains the right
to accept oversubscriptions or to scale back applications (in whole or part) at its absolute discretion,
which may result in the SPP raising more or less than
A$5 million
. Hot Chili also reserves the right to
place any shortfall under the SPP (at the same issue price), within its placement capacity under ASX
Listing Rule 7.1.
Full details of the SPP Offer, including the terms and conditions of the offer, will be set out in the
SPP offer document, which is expected to be released to the ASX and dispatched to Eligible
Shareholders on or around Friday,
10 May 2024
. The Company reserves the right to vary the terms
of the SPP without notice. Eligible Shareholders should review the SPP Offer terms and conditions in
full before deciding whether or not to participate in the SPP.
The SPP Offer period will open on Friday,
10 May 2024
and is expected to close at
5.00pm WST on
Friday
,
24 May 2024
.
Indicative Timetable for Placement and SPP Offer*
Event
Date
Record date for entitlement to participate in SPP Offer
Friday, 3 May 2024
Announcement of Placement and SPP, trading halt lifted and trading resumes on ASX
and TSXV
Monday, 6 May 2024
Shares are issued under the Placement
Thursday, 9 May 2024
Despatch of SPP Offer Document and Application Forms to Eligible Shareholders
Friday, 10 May 2024
Quotation of Placement Shares on ASX
Friday, 10 May 2024
SPP Offer opens
Friday, 10 May 2024
SPP Offer closes (5:00PM AWST)
Friday, 24 May 2024
Announcement of results of SPP Offer
Thursday, 30 May 2024
Allotment and issue of SPP Shares
Thursday, 30 May 2024
Quotation SPP Shares on ASX
Friday, 31 May 2024
*The dates in the timetable are indicative and subject to possible change without notice. The Company reserves the right to amend any or all of these dates at its absolute
discretion, subject to the Corporations Act 2001 (Cth), the ASX Listing Rules and other applicable laws. The quotation of the Shares to be issued under the Placement and SPP is
subject to approval from the ASX and TSXV.
This announcement is authorised by the Board of Directors for release to ASX and TSXV.
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: [email protected]
Penelope Beattie
Company Secretary – Hot Chili
Tel: +61 8 9315 9009
Email: [email protected]
Harbor Access
Email:
graham.farrell
@harbor
-access.com
Investor & Public Relations (Canada)
Email:
jonathan.paterson@harbor
-access.com
or visit Hot Chili's website at
www.hotchili.net.au
Figure 1. Location of Costa Fuego Project in relation to new landholdings and coastal infrastructure
(CNW Group/Hot Chili Limited)
US Securities Laws
This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall
there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful, including any of the securities in
the United States
. The securities have not been
and will not be registered under the 1933 Act or any state securities laws, and may not be offered
or sold within
the United States
unless registered under the 1933 Act and applicable state securities
laws, or an exemption from such registration requirements is available.
Forward Looking Statements
This news release contains certain statements that are "forward-looking information" within the
meaning of Canadian securities legislation and Australian securities legislation (each, a "forward-
looking statement"). Forward-looking statements reflect the Company's current expectations,
forecasts, and projections with respect to future events, many of which are beyond the Company's
control, and are based on certain assumptions. No assurance can be given that these expectations,
forecasts, or projections will prove to be correct, and such forward-looking statements included in
this news release should not be unduly relied upon. Forward-looking information is by its nature
prospective and requires the Company to make certain assumptions and is subject to inherent risks
and uncertainties. All statements other than statements of historical fact are forward-looking
statements. The use of any of the words "advance", "believe", "complete", "could", "create",
"estimate", "expect", "fully funded", "growth", "may", "plan", "project", "should", "will", "would",
variants of these words, and similar expressions are intended to identify forward-looking statements.
The forward-looking statements within this news release are based on information currently available
and what management believes are reasonable assumptions. Forward-looking statements speak
only as of the date of this news release. In addition, this news release may contain forward-looking
statements attributed to third-party industry sources, the accuracy of which has not been verified by
the Company.
In this news release, forward-looking statements relate, among other things, to: the terms of the
Placement and the SPP, the use of proceeds from the Placement and the SPP, the timing and ability
of the Company to close the Placement and the SPP, the Company's ability to obtain all regulatory,
including the approval of the TSXV and ASX, and timing and ability to complete the Company's
stated business objectives including the execution and results of planned exploration, the creation
and potential value of a water business, the results of the planned pre-feasibility study and bankable
feasibility study, the ability to consolidate further mineral land holdings and whether they contain
mineralization of economic interest, and the outcome of strategic funding discussions.
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 news release,
including, but not limited to, the following material factors: obtaining all regulatory and shareholder
approvals for the Placement and the SPP; 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 news release and
elsewhere in the Company's public disclosure record.
Although the forward-looking statements contained in this news release 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 news release, the Company has made assumptions regarding:
completion of the Placement; regulatory approval for the Placement; the risks related to the use of
proceeds from the Placement; market volatility; negative effects of dilution on the market price of the
Company's ordinary shares; the ability to obtain permits for operations; sovereign risks associated
with the Company's foreign operations; the risks related to political instability and expropriation; the
uncertainty of the economic viability and estimation of mineral resources; the future price of minerals,
including gold, copper, and silver; success of the exploration activities and the specifications,
targets, results, analyses, interpretations, benefits, costs and timing of them; currency exchange
rate fluctuations; prospects, projections and success of the Company and its projects; assumptions,
limitations and qualifications in the Costa Fuego Technical Report; the timing and ability of the
Company to receive necessary regulatory approvals; environmental risks; labour and employment
risks; planned exploration programs and expenditures; current conditions and expected future
developments; current information available to the management of the Company; the general
business and prospects of the Company, as well as other considerations that are believed to be
appropriate in the circumstances. The Company has included the above summary of assumptions
and risks related to forward-looking information provided in this news release to provide investors
with a more complete perspective on the Company's future operations, and such information may
not be appropriate for other purposes. 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 news release are expressly qualified by the
foregoing cautionary statements and are made as of the date of this news release. 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 news release or to reflect the occurrence of unanticipated events, whether as a result of new
information, future events or results, or otherwise. Investors should read this entire news release
and consult their own professional advisors to ascertain and assess the income tax and legal risks
and other aspects of an investment in the Company.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of
this news release. No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
SOURCE
Hot Chili Limited
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CO: Hot Chili Limited
CNW 07:00e 06-MAY-24