#Australia #Hot Chili #La Verde #Costa Fuego #Perth

Overview of Hot Chili Limited

Hot Chili Limited is on an impressive trajectory with its Costa Fuego project located in the coastal regions of Chile, recently announcing a Preliminary Feasibility Study (PFS) that highlights the project's substantial economic viability. This period marks a pivotal phase for the company, as it aims to leverage its findings to bolster investor confidence and facilitate strategic investments.

Key Highlights of the Costa Fuego Project

The Costa Fuego project is designed for low-risk and long-term operations, boasting advanced permitting that underpins its expected multi-decade operational life. The PFS reveals robust financial metrics:

• - Post-tax Net Present Value (NPV): Estimated at US$1.2 billion, with a range spanning from US$786 million to US$1.62 billion.
• - Internal Rate of Return (IRR): Approximately 19%, indicative of attractive returns on investment.

The PFS also confirmed a maiden ore reserve of 502 million tons at an average grade of 0.37% Cu, positioning Costa Fuego within the top quartile of copper producers. This substantial reserve reduces operational risks and highlights the project's potential to yield approximately 1.5 million tons of copper over its estimated life of mine.

Exploration and Discovery at La Verde

In tandem with advancements at Costa Fuego, Hot Chili has been progressing its La Verde exploration project, located 30 km south of Costa Fuego. Recent drilling programs at La Verde have unearthed significant mineralization, confirming its status as a major copper-gold porphyry discovery. Noteworthy drill intersections include:

• - 320 meters grading 0.3% Cu and 0.1 g/t Au.
• - Additionally, other intersections exhibited grades above 0.5% Cu at various depths, further solidifying La Verde's potential.

These promising results suggest expansive mineralization and the potential to significantly enhance the operational life of the Costa Fuego project through innovative open-pit mining strategies.

Huasco Water Project Initiative

In a parallel initiative, Hot Chili has also been active in outlining a robust Huasco Water project, aimed at providing seawater supply to the Costa Fuego site. The water supply project aims to support both mining activities and local communities, fostering a sustainable water strategy that encompasses:

• - Stage 1: A potential supply of 500 liters per second.
• - Stage 2: Expansion to 1,300 liters per second of desalinated water supply.
• - The project showcases economic viability with a post-tax NPV of US$122 million for stage 1 and an impressive US$977 million for stage 2, backed by strong IRRs of 19% for both stages.

This supply plan reflects a forward-thinking approach to resource management, crucial for endeavors in water-scarce mining regions.

Financial Health and Future Outlook

As of the end of March 2025, Hot Chili has reported a cash position of A$7.5 million with expectations to receive an additional A$5 million from VAT refunds. Their strategic approach focuses on minimizing expenditures, projecting a 60-65% reduction in operating costs over the next six months. This reduction is vital as the company intends to proceed with its Definitive Feasibility Study (DFS), further refining its project plans without excessive financial burden.

Summary

Hot Chili Limited is poised for significant growth within the copper mining sector. The developments at Costa Fuego and La Verde, combined with strategic water supply initiatives and a solid financial footing, position the company favorably in a competitive market. With increased investor interest and proactive planning, Hot Chili exemplifies the potential for sustainable mining in Chile, promising both economic returns and community engagement.

In summary, the ongoing developments signify a robust future for Hot Chili and its stakeholders, reinforcing the importance of infrastructure in mining viability and profitability.