Half-Yearly Report: Hot Chili Limited and Controlled Entities Interim Financial Report for the Half-Year Ended 31 December 2024

PR Newswire

PERTH, Australia, March 14, 2025

PERTH, Australia, March 14, 2025 /PRNewswire/ -

Review of Operations

Highlights

   -- Hot Chili adds former La Verde Copper Mine (La Verde) to its Costa Fuego 
      coastal copper hub and confirms significant Cu-Au porphyry discovery. 
 
   -- Costa Fuego Cu-Au Pre-feasibility Study $(PFS)$: Final Stages Underway. 
 
   -- Huasco Water -- Water Supply PFS: Nearing Completion. 
 
   -- 31 December 2024 cash position A$19 million. 

Hot Chili Confirms Major Cu-Au Porphyry Discovery at La Verde

On 11 February 2025, the Company announced new drill results from ten Reverse Circulation $(RC)$ drill holes, confirming La Verde as a significant copper-gold porphyry discovery in low elevation coastal Chile, with broad, consistently mineralised intersections extending over 300 m vertically, commencing at shallow depths.

Drilling confirms scale & growth potential*

   -- Wide, shallow mineralisation -- current discovery footprint extends 550 m 
      by 400 m and remains open in all directions. 
 
   -- Deeper potential remains untapped -- Mineralisation commences from 
      shallow depths, extends to more than 300m below surface, and 8 of 12 
      drill holes reported to date end in mineralisation at the limit of RC 
      drilling depth capability. 
 
   -- Gravel cover masking potentially much larger porphyry system -- step-out 
      drilling underway. 
 
   -- Potential below the historical oxide copper open pit untested -- drill 
      testing yet to commence. 
 
   -- Major discovery in its infancy -- every drill hole has intersected 
      porphyry-style, copper-gold mineralisation (refer to Table 1 for details 
      on significant intercepts). 

As at 11 February 2025, Hot Chili had completed 19 RC drill holes (5,700 m) at La Verde, with assay results from 12 holes reported so far confirming a major copper-gold porphyry discovery* in Chile's coastal range, with assays pending for seven additional RC holes, with geological logging confirming the presence of porphyry host-rock featuring porphyry-style A- and B-type veining in each of the pending drill holes.

Diamond drilling being planned, targeting potential for deeper, higher-grade zones intersected at depth and to test potential for +1km vertical depth extent, typical of other recent major porphyry discoveries, such as Hot Chili's neighbouring Cortadera discovery, *La Verde Mineral Exploration/Exploration Target Area: Exploration targets and/or Exploration zones and/or Exploration areas are speculative and there is no certainy that any future work or evaluation will lead to the definition of a mineral resource.

 
Adjacent Properties: The Company has no interest in, or rights to, any of the 
adjacent properties mentioned, and exploration results on adjacent properties 
are not necessarily indicative of mineralization on the Company's properties. 
Any references to exploration results or mineral occurrences on adjacent 
properties are provided for information only and do not imply any certainty of 
achieving similar results on the Company's properties. 
 
 
 
 
Notes to Table 1: Significant intercepts for La Verde are calculated above a 
nominal cut-off grade of 0.2% Cu. Where appropriate, significant intersections 
may contain up to 30m down-hole distance of internal dilution (less than 0.2% 
Cu). Significant intersections are separated where internal dilution is 
greater than 30m down-hole distance. The selection of 0.2% Cu for significant 
intersection cut-off grade is aligned with marginal economic cut-off grade for 
bulk tonnage polymetallic copper deposits of similar grade in Chile and 
elsewhere in the world. 
(1) Previously released significant intercepts. See announcement dated 18(th) 
December 2024 
 

Hot Chili adds La Verde to its Costa Fuego Coastal Copper Hub

In November 2024, Hot Chili 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 (Figure 1).

La Verde encompasses 800m strike length of open pit workings, previously exploited by private interests for shallow copper-oxide mineralisation.

The La Verde Option Agreement, along with the recently executed Domeyko Option Agreement (see announcement dated 30(th) 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, based on geophysical surveys.

The material terms of the 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. 

Costa Fuego Cu-Au Pre-feasibility Study (PFS): Final Stages Underway

During the period, Hot Chili completed key workstreams for Costa Fuego's PFS and Environmental Impact Assessment $(EIA)$, achieving milestones in metallurgy, mining, infrastructure, and environmental planning.

Metallurgy

   -- Finalized metallurgical testwork using Nova Mineralis Novaminore$(R)$ 
      technology, which leverages saline water and regulated irrigation cycles 
      for enhanced chalcopyrite recovery from heap leaching of low grade 
      mineralisation. 
 
   -- Demonstrated reduced freshwater dependency, aligning with Costa Fuego's 
      planned seawater processing. 
 
   -- Results informed predictive models for copper recovery and acid 
      consumption, optimizing the mine schedule. 

Mining

   -- Mine scheduling finalised using advanced software, incorporating feed 
      from four open pits (Productora, Cortadera, Alice, and San Antonio) and 
      an underground block cave at Cortadera. 
 
   -- Multiple schedule iterations prioritized lower pre-start capital, faster 
      payback, and optimized production rates. 
 
   -- Initial capital and operating cost estimates were completed, with further 
      optimization underway for inclusion in the PFS financial model. 

Infrastructure

   -- Finalized site layout, including placement of heap/dump leach pads, waste 
      dumps, stockpiles, mill site, tailings storage, and support buildings. 
 
   -- Integrated surface water management systems, including diversion channels 
      and dewatering infrastructure. 
 
   -- Ongoing road optimization to align with the mining schedule. 

Environment

   -- Advanced EIA preparation with additional hydrogeological and geotechnical 
      investigations planned for 2025. 
 
   -- Completed collection of 122 rock samples for acid rock drainage $(ARD)$ and 
      metal leaching $(ML)$ tests to inform long-term infrastructure and mine 
      closure planning. 
 
   -- Conducted baseline environmental studies and integrated results into 
      design decisions. 

Huasco Water -- Water Supply PFS: Nearing Completion

During the quarter, Hot Chili's 80% owned subsidiary company Huasco Water continued to progress its PFS-level, water supply Business Case Study. Key deliverables finalised this quarter by international engineering firm ILF Group, include:

   -- Evaluation of marine works and the conveyance system to Costa Fuego and 
      other potential third-party off-takers 
 
   -- Completion of trade-off studies, including desalination plant (technology, 
      location, and sizing), and pipeline configuration (routing and location 
      of pumping stations) for potential third party off-takers. Note that 
      Costa Fuego does not require desalinated water for processing. 
 
   -- Optimisation of capital cost estimates for the initial stage of seawater 
      supply to Costa Fuego 
 
   -- Options for third party water supply, including desalinated water, 
      continue to advance 

Huasco Water controls the only active granted maritime water concession and most of the necessary permits to provide non-continental water supply to the Huasco Valley, following over a decade of permitting advancement for Hot Chili's coastal range Costa Fuego copper-gold project.

Uniquely, Huasco Water represents an opportunity for Hot Chili to potentially outsource its water infrastructure capital requirements in addition to providing significant additional funding optionality for Costa Fuego.

Hot Chili is continuing its discussions with potential water off-takers in the Huasco Valley and is also engaging with major water infrastructure groups in relation to potential partnership opportunities for financing and development of Huasco Water's future industrial water infrastructure.

Qualifying Statements

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March 14, 2025 07:00 ET (11:00 GMT)