(Hot Chili Limited, 11.Nov.2024) — Hot Chili Limited entered into a three-year Option Agreement to acquire a 100% interest in the historical La Verde open pit copper mine.
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 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 Oct. 2024 of the Quarterly Report for period ending 30 Sep. 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 Oct. 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$25.7mn in cash (as of 30 Sep. 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 1Q:25
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 1Q:25.
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 has executed a definitive option agreement with SLM Los Dominiceros una de la Sierra Los Chiqueros, 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.
- 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.
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