Hot Chili Quarterly Report - Period
Hot Chili Quarterly Report - Period
Ending 30 June 2026
PERTH, Australia, July 30, 2026 /CNW/ --
Highlights
La Verde Emerging as Hot Chili Cornerstone Asset
• Drilling at the Company's La Verde copper-gold (Cu-Au)
porphyry deposit in coastal Chile continued during the quarter,
with a third drill rig commencing in May.
• La Verde is one of Chile's most significant new coastal Cu-Au
porphyry discoveries and is fast-shaping as a cornerstone asset
for the Company's coastal range Costa Fuego copper-gold (Cu-
Au) project.
• Standout results reported during the quarter included:
• DKD044 recorded 391.1 m grading 0.51% CuEq¹ (0.42%
Cu, 0.11 g/t Au) from surface, including:
• 17.8 m grading 0.68% CuEq (0.63% Cu, 0.06 g/t Au)
from surface
• 40.7 m grading 0.60% CuEq (0.50% Cu, 0.12 g/t Au)
from 103.3 m
• 85.4 m grading 0.61% CuEq (0.50% Cu, 0.15 g/t Au)
from 160 m
• 19.7 m grading 0.70% CuEq (0.57% Cu, 0.15g/t Au)
from 276.1 m
• DKP053 recorded 250 m grading 0.50% CuEq (0.39% Cu,
0.14g/t Au) from 64 m depth, including
• 36 m grading 0.72% CuEq (0.59% Cu, 0.18g/t Au)
from 82 m
• DKP054 recorded 124 m grading 0.46% CuEq (0.40% Cu,
0.07g/t Au) from 42 m depth, including
• 26 m grading 0.71% CuEq (0.63% Cu, 0.10g/t Au)
from 58 m
• DKP058 recorded 108 m grading 0.54% CuEq (0.45% Cu,
0.11 g/t Au) from 24 m depth, including
• 32 m grading 0.60% CuEq (0.52% Cu, 0.12 g/t Au)
from 24 m
• DKD049 recorded 213 m grading 0.44% CuEq (0.38% Cu,
0.07g/t Au) from 504 m depth, including
• 57.3 m grading 0.60% CuEq (0.51% Cu, 0.10 g/t Au)
from 535.8 m
• DKP028D recorded 258.9 m grading 0.42% CuEq (0.33%
Cu, 0.09 g/t Au) from 358 m, including
• 27.4 m grading 0.76% CuEq (0.63% Cu, 0.16 g/t Au)
from 499.5 m
• Assays pending for 21 drillholes (three DD, three DD tails and 15
RC) and second accredited laboratory now operating at full
capacity – significantly improving Hot Chili's assay turnaround
times
Hot Chili Secures US$15 Million Via Amendment Agreement with
OR Royalties
• La Verde, a pre-resource asset, is now added to OR's
royalty footprint for US$15 million in funding
• OR royalty "look-through" value has doubled, given its
equivalence to a 1.12% CuEq1 NSR royalty across payable
metals for a total consideration of US$30 million (following
additional US$15 million amendment agreement), and Hot Chili's
current market capitalisation of approximately US$230 million
• Change of Control Royalty Buyback terms aligned with
ongoing strategic partnering process
__________________________________
1 CuEq considers assumed commodity prices and average metallurgical recoveries from test work. See qualifying statements
below.
2 US$15 million (approximately A$21.4 million)
Strong Cash Position of Approx. A$46 Million Following Closure
of OR Deal
Diamond and RC Drill rigs accelerating development of the La Verde
Cu-Au deposit
Cautionary Statement – JORC Code (2012)
The Costa Fuego Copper-Gold Project is currently at the Pre-
Feasibility Study ("PFS") stage. The production targets and forecast
financial information contained in this report are based on technical
and economic assessments that are preliminary in nature. While the
PFS incorporates Indicated and Inferred Mineral Resources, there is a
lower level of geological confidence associated with Inferred Mineral
Resources, and no certainty that further exploration or development
will result in the conversion of Inferred Mineral Resources to Indicated
or Measured categories.
The PFS is not a definitive study and is based on a number of
assumptions, including commodity prices, capital and operating costs,
metallurgical recoveries, permitting, and other factors, which are
subject to change. The outcomes of the PFS should not be used as
the basis for a final investment decision. Further work, including
additional drilling, metallurgical testing, and detailed engineering, is
required before the Company can make a decision to proceed to
development.
Of the Mineral Resources scheduled for extraction in the PFS
production plan, more than 99% are classified as Indicated, with the
remaining <1% as Inferred. The Company has concluded that it has
reasonable grounds for disclosing a production target which includes a
small amount of Inferred Mineral Resources, as permitted under the
JORC Code. There is a low level of geological confidence associated
with Inferred Mineral Resources and there is no certainty that further
exploration work will result in the determination of Indicated Mineral
Resources or that the production target itself will be realised. The
viability of the development scenario envisaged in the PFS does not
depend on the inclusion of Inferred Mineral Resources. However, it is
reasonably expected that the majority of Inferred Mineral Resources
could be upgraded to Measured or Indicated Mineral Resource with
continued drilling.
The Mineral Resources underpinning the production target in the PFS
have been prepared by a Competent Person in accordance with the
requirements of the JORC 2012. For full details on the Mineral
Resource estimate, please refer to the ASX announcement of 27
March 2025.
To achieve the outcomes indicated in the PFS, including reaching
Definitive Feasibility Study ("DFS"), mine construction and production
stages, funding in the order of US$1.27 Billion will be required,
including pre-production and working capital and assumed financing
charges. Investors should note that there is no certainty that Hot Chili
will be able to raise that amount of funding when needed. One of the
key assumptions is that the funding for the Project will be available
when required and on acceptable terms. It is also possible that such
funding may only be available on terms that may be dilutive to, or
otherwise affect the value of, Hot Chili's existing shares. It is also
possible that Hot Chili could pursue other value realisation strategies
such as debt financing, a sale or partial sale of its interest in the Costa
Fuego Copper Project and/or Huasco Water, sale of further royalties
and/or streaming rights, sale of non-committed offtake rights, and sale
of non-core assets.
The Company cautions that there is no certainty that the results or
estimates contained in the PFS will be realised.
This Report contains forward-looking statements. Hot Chili has
concluded that it has a reasonable basis for providing these 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 PFS.
SUMMARY OF OPERATIONAL ACTIVITIES
Higher-Grade Starter Pit Firming as a Standout Feature of La
Verde
The Company's ongoing focus on shallow infill and step-out drilling
across the up-dip extension of La Verde's high-grade core, continued
to deliver more outstanding results from Reverse Circulation (RC) drill
holes DKP053, DKP054, DKP056, and DKP058 (Figure 1 and Figure
2) during the quarter.
Numerous drilling intersections returned across the up-dip portion of
La Verde's high-grade core, all contain broad zones of higher-grade
(+0.7% CuEq) mineralisation from shallow depths. Importantly, assay
results are pending for nearby up-dip drillhole DKP052 (Figure 3),
results expected soon (see announcement dated 5 May 2026).
These ongoing shallow RC drill results further expand the footprint of
near-surface, higher-grade mineralisation and continue to strengthen
the scale and continuity of a significant, near-surface, enrichment
zone - capable of delivering a higher-grade starter pit opportunity for
Costa Fuego (Figure 4).
Expansion Drilling Delivering Continued Success
Diamond (DD) drilling assay results for step-out holes DKD044,
DKD049 and DKP028D also confirmed additional bulk tonnage
extensions and delivered further expansion of La Verde's high-grade
core (Figures 2 and 3) during the quarter.
Assay results from DKD044 returned a significant intersection of 391
m grading 0.51% CuEq (0.42% Cu, 0.11g/t Au) from surface, (Figure
1), including several higher-grade intervals, confirming broad and
continuous high-grade copper-gold mineralisation on the western side
of the high-grade core
DD hole DKD049 was designed as a 175 m step-out from DKD039 -
which recorded the highest-grade and widest drilling intersection to
date at La Verde (725 m grading 0.42% CuEq (0.36% Cu, 0.07 g/t Au
from 18m depth). Results from DKD049 confirm a significant
expansion of La Verde's eastern flank at depth.
DKP028D successfully extended a previous RC drillhole (which ended
in mineralisation), recording a further 200m down-hole of
mineralisation across La Verde's western flank.
Advancing Toward Maiden Mineral Resource and Pre-Feasibility
Study (PFS) Integration
Hydrogeological, geotechnical, metallurgical, mine engineering and
environmental workstreams are all advancing well toward full
integration of La Verde into the Company's Costa Fuego production
hub. Additional mineralogical analysis activities were also carried out
during the quarter, including Terraspec data collection and drill core
scanning using LithologyIQ's hyperspectral instrument.
A maiden Mineral Resource Estimate (MRE) for La Verde is expected
to be released later this year followed by a revised PFS for Costa
Fuego and then finally culminating in the formal submission of an
Environmental Impact Assessment for Costa Fuego in Q2CY 2027.
The Company expects that La Verde's rapid integration will be
transformative for Costa Fuego's financial metrics and global
standing, already ranked amongst the world's top five by-scale1,
independent copper developments, not controlled by a major
mining company.
___________________________________
1 See Slide 20, Corporate Presentation Rule Symposium – July 2026
Additional ISO Accredited Assay Laboratory Engaged
During the quarter, delivery of assay results increased to over 10
weeks in some cases. Hot Chili took proactive measures and engaged
the services of an additional ISO accredited laboratory in the region, to
ensure reporting of outstanding assay results is fast tracked, and
assay turnaround times are accelerated. Improved turnaround times
have been noted from both laboratories since the addition of a second
laboratory.
Project Development Advances
Hot Chili has established a dedicated project development team, led
by experienced project director Mr David Bayona, to advance the
Costa Fuego Project through its critical development phase. Under a
single governance framework, the team is overseeing delivery of the
Environmental Impact Assessment (EIA) and the revised Pre-
Feasibility Study (PFS) programs, coordinating engineering,
permitting, social performance, infrastructure, technical studies,
project controls, key service providers, and third-party stakeholders.
This organisational transition marks an important step in Hot Chili's
evolution from an exploration-focused company to a project
development and delivery organisation, strengthening readiness for
permitting, financing, detailed engineering and project execution. The
integrated structure improves decision-making, maintains alignment
across workstreams and enhances schedule discipline, positioning
Costa Fuego for successful execution.
Environmental Impact Assessment (EIA) On-Track
The Costa Fuego Environmental Impact Assessment (EIA) continues
to advance, supported by a comprehensive schedule that enables
weekly and monthly monitoring of progress, critical path activities, and
milestones across all environmental workstreams.
A key strategic decision adopted during the quarter was the
separation of the environmental permitting process into two
independent EIAs:
• EIA 1A - Huasco Water seawater intake, pumping and
distribution system
• EIA 1B - Costa Fuego Development Project.
This approach provides greater clarity for regulators, establishes
independent areas of influence for environmental assessment,
reduces duplication of baseline and impact evaluation work, and
aligns the seawater supply system with the development of the mining
project.
Key workstreams advanced during the quarter included environmental
baseline studies, community and stakeholder engagement, indigenous
engagement program, and preparation of the formal EIA
documentation.
Revised Pre-Feasibility (PFS2)
In May 2026, Hot Chili commenced workstreams toward delivery of a
significant revision of its 2025 Pre-Feasibility Study (PFS), aiming to
incorporate the La Verde Cu-Au discovery into the Costa Fuego
development strategy. The study remains on track and is being
progressed in parallel with the Environmental Impact Assessment (EIA
1B) program under a common project governance framework.
The revised study is assessing development options to improve
project economics, reduce execution risk and simplify project
delivery. Key areas of assessment include the integration of La Verde
and the potential development of a large open-pit mining scenario at
Cortadera as an alternative to the previously defined open-pit and
underground block cave operation for the later years of Costa Fuego's
mine plan.
Results from the study will support selection of the preferred
development pathway for Costa Fuego and provide greater clarity on
project scope, mining strategy, infrastructure requirements and project
economics.
Huasco Water – Update on Second Maritime Licence Application