#Hot Chili Limited #Australia #Costa Fuego #Perth #Copper Project

Hot Chili Limited Announces Its Pre-Feasibility Study Results for Costa Fuego

On March 27, 2025, Hot Chili Limited (ASX: HCH, TSXV: HCH, OTCQX: HHLKF) unveiled the results of its Pre-Feasibility Study (PFS) concerning the Costa Fuego copper-gold project, complying with the Canadian standards outlined in National Instrument 43-101. This announcement is a significant milestone for the company, showcasing robust economic potential for one of its key developments.

PFS Highlights

The findings of the Pre-Feasibility Study reflect the project’s global importance and its capability to operate over an extended period. Here are some of the compelling highlights:

• - Extended Project Life: The PFS supports a mine life of 20 years, with an average annual production increase to 116 ktpa of copper equivalent (CuEq), comprising 95 kt of copper and 48 koz of gold in the initial 14 years.
• - Cost Efficiency: Projected life of mine (LOM) average cash costs stands at US$1.38 per pound of copper, reinforcing a competitive cost structure within the industry.
• - Significant Production Output: An estimated total of 1.5 million tonnes of copper and 780,000 ounces of gold are expected to be produced throughout the lifespan of the project.
• - Robust Financial Returns: The PFS indicates a free cash flow after tax of approximately US$3.86 billion, highlighting the financial viability and attractiveness of the Costa Fuego project.
• - Market Sensitivity: With a post-tax Net Present Value (NPV) estimated at US$1.2 billion, this figure could rise to US$2.2 billion, assuming current copper prices remain favorable.

Development and Risk Management

Hot Chili’s approach incorporates extensive pre-project risk analysis, integrating an estimated increase of US$442 million to mitigate inflationary and scope change risks successfully. The study’s parameters to achieve ± 25% accuracy in its assumptions are testament to the project's well-strategized framework.

Managing Director Christian Easterday expressed optimism about the PFS, citing it as a tactical guide for moving forward and identifying areas for capitalizing on the current peak in copper and gold markets. The location’s low elevation and established permitting framework provide a rare advantage compared to peers in the copper production sector.

Maiden Mineral Reserve

A key development from the PFS is the declaration of a maiden mineral reserve, which includes:

• - 502 Mt @ 0.37% Cu
• - 0.10 g/t Au, 0.49 g/t Ag, and 97 ppm Mo across various processing streams.

This inaugural reserve reduces operational uncertainties, positioning Costa Fuego as a strategic asset in Hot Chili's portfolio and increasing investor confidence in the potential upside.

Additional Growth Prospects

The project also showcases an exciting growth engine characterized by the La Verde Cu-Au porphyry discovery, confirmed earlier this year. This finding is expected to contribute meaningfully to future resource estimates, enhancing the project’s economic milestone ahead of a planned Definitive Feasibility Study. Moreover, another Environmental Impact Assessment (EIA) is underway to integrate these new discoveries into Costa Fuego's operational framework.

Future Steps

The next phases for Hot Chili involve accelerating drilling activities and environmental assessments at La Verde to support expansion and integrating the new resources into their development strategy. This aggressive development plan aims to ensure the project can commence production by the end of the decade, reflecting a poised future in copper-gold mining.

In summary, Hot Chili Limited’s PFS for the Costa Fuego project indicates a viable, profitable operation with extended life, strong production capacity, and low operational risk. Through strategic partnerships and diligent exploration, the company looks set to enhance its footprint in the copper and gold mining industry.