Highlights
- Hot Chili has executed an Option Agreement to acquire a
100% interest in the historical La Verde
Copper Mine (La Verde), located 30 km south of the
Company's low-altitude, Costa Fuego copper-gold project in
Chile
- La Verde encompasses 800m
strike length of open pit workings, previously exploited by
private interests for shallow porphyry copper-style
oxide mineralisation
- The La Verde Option Agreement, along with the recently
executed Domeyko Option Agreement (see announcement dated
30th April 2024), for the first
time consolidates and provides access to, a much larger potential
porphyry copper deposit footprint measuring approximately 1.4km by
1.2km
- A first-pass, 4,000m drill
program commenced at La Verde on 30th
October 2024, with one drill rig in operation and two
drill holes already complete (assay results pending)
- Hot Chili has updated timing for the planned release of its
next key catalysts to accommodate additional
project optimisation and to align the outcomes of its copper
and water studies:
- Water Supply Business Case Study (Pre-feasibility Study level
(PFS)) for Huasco Water has been brought forward - now planned for
release in Q1 2025
- Costa Fuego PFS will be delivered in parallel with the
Huasco Water PFS – now also planned for release in Q1 2025
- Strong treasury of approximately A$25.7 million as of 30
September 2024
PERTH,
Australia, Nov. 11, 2024 /CNW/ - Hot Chili Limited
(ASX: HCH) (TSXV: HCH) (OTCQX: HHLKF) ("Hot Chili" or the
"Company") is pleased to announce the Company has entered into a
three-year Option Agreement to acquire a 100% interest in the
historical La Verde open pit copper mine ("La Verde").
La Verde is located in the core of the historical Domeyko mining
district and lies approximately 30 km south of the Company's Costa
Fuego copper-gold project ("Costa Fuego" or "the Project") planned
central processing hub in the coastal range of the Atacama region,
Chile.
La Verde comprises significant historical open pit workings,
where shallow porphyry copper oxide mineralisation was previously
exploited by private interests across a strike extent of
approximately 800m, widths of up to
200m and depths of up to 15m. Historical drilling was limited to the
surrounding leases, with little to no drilling undertaken across
the mine area.
Importantly, La Verde sits in the centre of Hot Chili's recently
consolidated and larger Domeyko landholding, secured in an Option
Agreement in April 2024 (Figures 1
and 2). The execution of the La Verde Option Agreement marks
the first time that the entire La Verde porphyry system has been
consolidated and controlled by a single party, allowing for drill
testing across a potentially much larger porphyry copper deposit
footprint, measuring approximately 1.4km by 1.2km (Figures 4 and
5).
The Company has undertaken several exploration programs (soil
geochemistry, mapping, magnetics surveys) across the Domeyko region
(see ASX announcement on 31 October
2024 of the Quarterly Report for period ending 30 September 2024) since April of this
year. These programs were extended over the La Verde copper
mine area as part of the Company's due diligence process, prior to
the Option Agreement execution.
Geological mapping of outcrop within the open pit has identified
copper oxide mineralisation associated with porphyry-style quartz
veins, fractures, and faults, as well as several porphyry intrusive
phases of similar age (late Cretaceous) and style to the Company's
Cortadera porphyry copper deposit located 30km to the north
(Figures 2 and 3).
Historical exploration undertaken by Hudbay Minerals Inc. across
surrounding tenements attempted to define continuations of La
Verde's mineralisation, outside of the privately held mining lease,
with several reverse circulation (RC) and diamond drill holes (DD)
completed.
Hot Chili commenced a first-pass drill program at La Verde,
comprising eleven RC drill holes for approximately 4,000 m, on 30 October
2024 with one drill rig in operation (Figure 5). Two
drill holes for 800m are already
complete, confirming wide intersections of porphyry-style copper
mineralisation in both holes, based on visual logging, with assay
results pending.
This latest project acquisition is an important step in Hot
Chili's ongoing consolidation and growth strategy for Costa
Fuego. The Company continues to evaluate opportunities to
secure additional advanced prospects within economic distance of
planned central processing facilities. This approach may
provide additional bulk tonnage and/or high-grade copper-gold
mineral resource additions for Costa Fuego.
The Company looks forward to the receipt of first assay
results and providing further updates as
exploration drilling activities progress at La Verde.
Hot Chili is well positioned with A$25.7 million
in cash (as of 30 September 2024) to
complete the Costa Fuego PFS, Environmental Impact Statement (EIA),
Huasco Water PFS, port upgrade studies and planned regional growth
drilling programs.
Updates to Timing of Next Company Catalysts
Hot Chili has updated the timing for delivery of its next key
milestones in order to allow for additional project optimisations
and to ensure alignment of the outcomes of each of the
following:
- Water Supply Business Case Study (PFS-level) for Huasco Water
has been brought forward - now planned for release in Q1 2025
- Costa Fuego PFS will be delivered in parallel with the
Huasco Water PFS – now planned for release in Q1 2025
All Costa Fuego PFS workstreams are on track for completion by
late 2024, laying the groundwork for integrating results into both
the Costa Fuego and Huasco Water PFSs in Q1 2025.
Accelerating the Huasco Water PFS aligns its release with Costa
Fuego's, enabling further project optimizations based on multiple
independent reviews. These refinements will be incorporated into
the Costa Fuego PFS in early 2025, ahead of the planned
simultaneous release of both studies.
The material terms of executed La Verde Option Agreement are
as follows:
- Hot Chili's 100% owned subsidiary Sociedad Minera La
Frontera SpA ("Frontera") has executed a definitive option
agreement with SLM Los Dominiceros una de la Sierra Los Chiqueros
("SLM Dominoceros"), the holder of a 100% interest in the
concession comprising La Verde, for the grant to Frontera of an
option to acquire a 100% interest in the La Verde concession ("La
Verde Option Agreement").
- Non-refundable cash payment of US$320,000 to SLM Dominoceros upon grant of
the La Verde Option Agreement.
- Non-refundable cash payment of US$680,000 within 12 months from the grant of the
La Verde Option Agreement.
- Non-refundable cash payment of US$1,000,000 within 24 months from the grant of
the La Verde Option Agreement.
- Option may be exercised within 36 months of the date of grant
of the La Verde Option for a final non-refundable cash payment of
US$6,890,000.
This announcement is authorised by the Board of Directors
for release to ASX and TSXV.
For more information please contact:
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Christian
Easterday
Managing Director – Hot
Chili
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Tel:
+61 8 9315 9009
Email: admin@hotchili.net.au
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Carol
Marinkovich
Company Secretary – Hot
Chili
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Tel:
+61 8 9315 9009
Email: admin@hotchili.net.au
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Graham
Farrell
Investor & Public
Relations
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Email:
graham@hotchili.net.au
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or visit Hot Chili's website at www.hotchili.net.au
Qualifying Statements
Qualified Person – NI 43-101
The technical information
in this news release has been reviewed and approved by Mr.
Christian Easterday, MAIG, Hot
Chili's Managing Director and a qualified person within the meaning
of NI43-101.
Competent Person – JORC
The information in this
announcement that relates to Exploration Results for the La Verde
project is based upon information compiled by Mr Christian Easterday, the Managing Director and a
full-time employee of Hot Chili Limited, who is a Member of the
Australasian Institute of Geoscientists (AIG). Mr Easterday has
sufficient experience that is relevant to the style of
mineralisation and type of deposits under consideration and to the
activity which he is undertaking to qualify as a 'Competent Person'
as defined in the 2012 Edition of the 'Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves' (JORC Code). Mr Easterday consents to the inclusion in
the report of the matters based on their information in the form
and context in which it appears.
Disclaimer
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 Report.
Forward Looking Statements
This announcement 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 report 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 "could",
"estimate", "expect", "may", "plan", "potential", "project",
"should", "will", "would" and similar expressions are intended to
identify forward-looking statements.
The forward-looking statements within this announcement are
based on information currently available and what management
believes are reasonable assumptions. Forward-looking statements
speak only as of the date of this report.
In this Report, forward-looking statements relate, among other
things, to: prospects, projections and success of the Company and
its projects; the ability of the Company to expand mineral
resources beyond current mineral resource estimates; the results
and impacts of planned drilling to extend mineral resources and to
identify new deposits; the Company's ability to convert exploration
potential in mineral resources; the Company's ability to explore
effectively and execute drilling operations in a timely manner; the
Company's ability to fulfill obligations and exercise the La Verde
and Domeyko Option Agreements; the Company's ability to convert
mineral resources to mineral reserves; the timing and outcomes of
current and future planned economic studies including the planned
PFS for the Costa Fuego copper-gold project; the potential to
develop a water business in the Huasco valley and the future
economics thereof; the timing and results of the PFS level Water
Supply Business Case Study; the timing and outcomes of regulatory
processes required to obtain permits for the development and
operation of the Costa Fuego Project, including the EIA, as well as
for the Huasco Water business; whether or not the Company will make
a development decision for the Costa Fuego Project and/or Huasco
Water and the timing thereof; and estimates of planned exploration
costs and the results thereof.
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 announcement,
including, but not limited to, the following material factors:
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 report and elsewhere
in the Company's public disclosure record.
Although the forward-looking statements contained in this
announcement 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
announcement, the Company has made assumptions regarding: future
commodity prices and demand; availability of skilled labour; timing
and amount of capital expenditures; future currency exchange and
interest rates; the impact of increasing competition; general
conditions in economic and financial markets; availability of
drilling and related equipment; effects of regulation by
governmental agencies; future tax rates; future operating costs;
availability of future sources of funding; ability to obtain
financing; and assumptions underlying estimates related to adjusted
funds from operations. The Company has included the above summary
of assumptions and risks related to forward-looking information
provided in this announcement 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 announcement
are expressly qualified by the foregoing cautionary statements and
are made as of the date of this announcement. 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 announcement 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 report 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.
Mineral Resource Statement
Costa Fuego Combined
Mineral Resource (Effective Date 26th
February 2024)
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1 Mineral Resources are
reported on a 100% Basis - combining Mineral Resource estimates for
the Cortadera, Productora, Alice and San Antonio deposits. All
figures are rounded, reported to appropriate significant figures
and reported in accordance with the Joint Ore Reserves Committee
Code (2012) and NI 43-101. Mineral Resource estimation practices
are in accordance with CIM Estimation of Mineral Resource and
Mineral Reserve Best Practice Guidelines (November 29, 2019) and
reported in accordance CIM Definition Standards for Mineral
Resources and Mineral Reserves (May 10, 2014) that are incorporated
by reference into NI 43-101.
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2 The Productora
deposit is 100% owned by Chilean incorporated company Sociedad
Minera El Aguila SpA (SMEA). SMEA is a joint venture (JV) company –
80% owned by Sociedad Minera El Corazón SpA (a 100% subsidiary of
Hot Chili Limited), and 20% owned by Compañía Minera del Pacífico
S.A (CMP).
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3 The Cortadera deposit
is controlled by a Chilean incorporated company Sociedad Minera La
Frontera SpA (Frontera). Frontera is a subsidiary company – 100%
owned by Sociedad Minera El Corazón SpA, which is a 100% subsidiary
of Hot Chili Limited.
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4 The San Antonio
deposit is controlled through Frontera (100% owned by Sociedad
Minera El Corazón SpA, which is a 100% subsidiary of Hot Chili
Limited) and Frontera has an Option Agreement to earn a 100%
interest.
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5 The Mineral Resource
Estimates (MRE) in the tables above form coherent bodies of
mineralisation that are considered amenable to a combination of
open pit and underground extraction methods based on the following
parameters: Base Case Metal Prices: Copper US$ 3.00/lb, Gold US$
1,700/oz, Molybdenum US$ 14/lb, and Silver US$20/oz.
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6 All MRE were assessed
for Reasonable Prospects of Eventual Economic Extraction (RPEEE)
using both Open Pit and Block Cave Extraction mining methods at
Cortadera and Open Pit mining methods at the Productora, Alice and
San Antonio deposits.
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7 Metallurgical
recovery averages for each deposit consider Indicated + Inferred
material and are weighted to combine sulphide flotation and oxide
leaching performance. Process recoveries:
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Cortadera – Weighted
recoveries of 82% Cu, 55% Au, 81% Mo and 36% Ag. CuEq(%) = Cu(%) +
0.55 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t)
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San Antonio - Weighted
recoveries of 85% Cu, 66% Au, 80% Mo and 63% Ag. CuEq(%) = Cu(%) +
0.64 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0072 x Ag(g/t)
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Alice - Weighted
recoveries of 81% Cu, 47% Au, 52% Mo and 37% Ag. CuEq(%) = Cu(%) +
0.48 x Au(g/t) + 0.00030 x Mo(ppm) + 0.0044 x Ag(g/t)
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Productora – Weighted
recoveries of 84% Cu, 47% Au, 48% Mo and 18% Ag. CuEq(%) = Cu(%) +
0.46 x Au(g/t) + 0.00026 x Mo(ppm) + 0.0021 x Ag(g/t)
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Costa Fuego –
Recoveries of 83% Cu, 53% Au, 71% Mo and 26% Ag. CuEq(%) = Cu(%) +
0.53 x Au(g/t) + 0.00040 x Mo(ppm) + 0.0030 x Ag(g/t)
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8 Copper Equivalent
(CuEq) grades are calculated based on the formula: CuEq% = ((Cu% ×
Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t ×
Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm
× Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu
recovery). The base case cut-off grade for Mineral Resources
considered amenable to open pit extraction methods at the
Cortadera, Productora, Alice and San Antonio deposits is 0.20%
CuEq, while the cut-off grade for Mineral Resources considered
amenable to underground extraction methods at the Cortadera deposit
is 0.27% CuEq. It is the Company's opinion that all the elements
included in the CuEq calculation have a reasonable potential to be
recovered and sold.
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9 Mineral Resources are
not Mineral Reserves and do not have demonstrated economic
viability. The MRE include Inferred Mineral Resources that are
considered too speculative geologically to have economic
considerations applied to them that would enable them to be
categorised as Mineral Reserves. It is reasonably expected that the
majority of Inferred mineral resources could be upgraded to
Measured or Indicated Mineral Resources with continued
exploration.
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10 The effective date
of the MRE is February 26th, 2024. The MRE were previously reported
in Hot Chili's ASX announcement released February 26th, 2024 "Hot
Chili Indicated Resource at Costa Fuego Copper-Gold Project
Increases to 798 Mt" (Resource Announcement). Hot Chili confirms it
is not aware of any new information or data that materially affects
the information included in the Resource Announcement and all
material assumptions and technical parameters stated for the MRE in
the Resource Announcement continue to apply and have not materially
changed.
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11 Hot Chili Limited is
not aware of political, environmental, or other risks that could
materially affect the potential development of the Mineral
Resources other than as disclosed in this Report. A detailed list
of Costa Fuego Project risks is included in Chapter 25.12 of the
Technical Report "Costa Fuego Copper Project – NI 43-101 Technical
Report Mineral Resource Estimate Update" dated April 8th,
2024.
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SOURCE Hot Chili Limited
