#Australia #Hot Chili #Costa Fuego #Perth #Huasco Water

Hot Chili Limited Provides Clarifications on Huasco Water PFS and Seawater Supply MOU

Hot Chili Limited, a prominent player in the mining and resource sector, recently issued clarifications regarding its Preliminary Feasibility Study (PFS) for Huasco Water. This subsidiary, holding key water rights in the Huasco Valley in Chile, is positioning itself as a significant contributor to the mining industry by providing seawater supply. The corrections were essential due to discrepancies in figures that required alignment with previously disclosed versions on the Australian Stock Exchange.

Key Highlights of the Preliminary Feasibility Study (PFS)

The PFS outlines an ambitious framework for water supply, indicating a two-pronged approach:

• - Stage 1 estimates a seawater supply potential of 500 L/s, showcasing a post-tax NPV of $122 million and an IRR of 19%, with an estimated capital construction cost of $151 million and a payback period of just 4.5 years.
• - Stage 2 escalates this potential to 1,300 L/s of desalinated water, with a projected post-tax NPV of $977 million and similar IRR. The construction cost for this phase is estimated at $1.4 billion, with a payback projected at four years.

Furthermore, a comprehensive conceptual study for Stage 3 may further expand the desalination capacity up to 2,300 L/s.

Seawater Supply to Costa Fuego

A significant aspect of this PFS is the Memorandum of Understanding (MOU) executed for a twenty-year seawater supply to Hot Chili’s Costa Fuego Copper-Gold Project, ensuring up to 500 L/s of seawater. This foundational agreement is poised to support the project's operational water needs while reinforcing Hot Chili's competitive position following a ten-year regulatory approval process.

Development and Infrastructure Plans

Hot Chili has successfully secured long lead-time permits, including maritime water rights, coastal access, and pipeline easements, which are crucial for the project's infrastructure. By the end of the decade, the initial water supply is slated to commence, positioning Costa Fuego favorably in the region.

Market Potential and Strategic Partnerships

The Huasco Water project is set against a backdrop of significant demand, with more than 4,000 L/s of identified desalinated water needs, including numerous undeveloped mining projects yet to secure access. While agreements are still in negotiation for the expanded stages, Hot Chili is engaging actively with potential customers and is well-positioned to leverage its first-mover advantage in the region.

Environmental and Regulatory Considerations

As it stands, the environmental impact assessments for the seawater supply are advanced and incorporated within the Costa Fuego EIA baseline studies. In light of increasing environmental scrutiny, Hot Chili places significant emphasis on compliance and community engagement to address potential challenges while advancing its operational goals.

Conclusion

In summary, Hot Chili Limited’s clarifications on the PFS for Huasco Water underscore the company’s strategic vision for a sustainable water supply business in an area marked by burgeoning mineral exploration and environmental challenges. The established MOUs and robust engineering evaluations fortify the groundwork laid for future expansions and partnerships within this critical sector. As Hot Chili prepares to host investor briefings, the excitement around drilling results from the La Verde copper-gold discovery adds another layer of growth potential for its shareholder base.

For further insights into the company’s ongoing projects and future aspirations, stakeholders are encouraged to engage with the upcoming webinars that will delve into the implications of these developments financially and operationally for Hot Chili Limited.