Costa Fuego

Costa Fuego is located 17 km south of the regional township of Vallenar (population approximately 52,000), approximately 600 km north of Santiago and 160 km north of the coastal city of La Serena, in the low-altitude, coastal range of the Atacama region of Chile.

The Project comprises three mineral resources situated within a 10 km radius: Productora, Cortadera and San Antonio. The resources are located along the Pan-American Highway with an average elevation of 740 m above sea level and in close proximity to existing infrastructure of the Huasco valley and the nearby Las Losas port facilities.

Over the past decade, the Company has secured permits and access to establish critical infrastructure, including surface rights for the proposed central processing facilities and associated infrastructure at Productora, electrical connection to the Maitencillo power substation, maritime concession and coastal land access rights for sea water extraction, and easements for sea water pipelines and power infrastructure.

Preliminary Feasibility Study

Hot Chili delivered the Costa Fuego Preliminary Feasibility Study (PFS) in March 2025.

PFS Site Layouts

Productora

Productora is the processing center of Costa Fuego and also includes open pit mining with the Productora and Alice pits. The RopeCon delivers both oxide and sulphide ore to the processing center from Cortadera. The power supply from Maitencillo, and seawater supply from Huasco Water, are connected at Productora and distributed across Costa Fuego.

Cortadera

Cortadera includes both open pit mining and underground mining below the Cuerpo 3 pit. Cortadera ore, along with ore trucked from San Antonio, is loaded upon the RopeCon for transport to Productora.

San Antonio

San Antonio is connected via haul road to Cortadera, and features open pit mining over the existing underground mine.

Mining Operations

Costa Fuego combines open pit mining methods at Produtora, Alice, Cortadera, and San Antonio, with additional underground block cave methods at Cortadera.

Mining at Productora is completed across 5 phases, with initial phases targeting high-grade, near-surface material in Stage 1 and Stage 2 starter pits.

Mining at Cortadera follows each open pit in turn begining with Cuerpo 1 as Stage 1, Cuerpo 2 as Stage 2, and Cuerpo 3 as Stage 3. Mining at Cuerpo 3 open pit is complete before opening of the block cave. Cuerpo 1 and 2 pits are used for waste backfill once complete.

Production Feed by Mining Location

The project produces a combination of sulphide concentrator, oxide heap leaching, and low-grade sulphide dump leaching processing feed. Concentrator feed is produced at each mining location, with additional leach circuit feed within the open pits.

Primary Production

A 14 year primary production mine life, within a broader 20 year project life span, gives optionality for growth across the project

 

Metallurgy and Mineral Processing

The Costa Fuego project includes a combination of sulphide and oxide material processing producing a copper concentrate and copper cathode.

The proposed processing facilities, located at Productora, are designed to process sulphide material and are suitable for all Costa Fuego Project deposits. The sulphide concentrator is the centrepiece of the facility and is designed to process nominally 20.7 Mtpa of sulphide feed and is capable of averaging 21.7 Mtpa across the project life. Concentrator capacity will vary by deposit based on comminution properties.

Processing also considers a 4 Mtpa of oxide leach facility, to be processed via a crushing-agglomeration-heap leach circuit coupled with a SX-EW plant producing up to 12 ktpa of copper cathode. Sulphide material below variable mill cut-off grade is considered to be stockpiled to be processed in the mid-term via a low-grade sulphide dump leach designed for 3.6 Mtpa.

Costa Fuego Copper Production

Annual metal production across the three processing streams averages 95 kt Cu, 48 koz Au, 158 koz Ag and 4.4 Mlb Mo for the primary production period (first 14 years). LOM annual metal production across the 20-year processing life averages 74 kt Cu, 37 koz Au, 128 koz Ag and 3.4 Mlb Mo.

The Project has a processing throughput ramp-up time of one year for both the sulphide concentrator and oxide heap leach.

Mineral / Ore Reserves

Probable Reserve of 502 Mt at 0.37% Cu, 0.09 g/t Au, 0.49 g/t Ag and 97 ppm Mo across sulphide concentrator, oxide leach and low-grade sulphide leach processing streams.

The Costa Fuego Mineral Reserve is reported in accordance with the Joint Ore Reserves Committee ( “JORC” ) Code (2012) and the Canadian Institute of Mining, Metallurgy and Petroleum ( “CIM” ) Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definition, as required by NI 43-101. References to “Mineral Reserves” mean “Ore Reserves” as defined in the JORC Code and references to “Proven Mineral Reserves” mean “Proved Ore Reserves” as defined in the JORC Code. There is no material difference between the definitions of Probable Ore Reserves under the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves and the equivalent definitions in the JORC Code (2012). Terms Mineral Reserve (CIM) and Ore Reserve (JORC) are equivalent, and this study uses Mineral Reserve for consistency.

The Costa Fuego Project at PFS stage envisages conventional open pit, truck and shovel operation from four mineral deposits (Alice, Cortadera, Productora, and San Antonio) and underground block caving from a single mine area (Cortadera, below Cuerpo 3 open pit). Ore would be processed either via heap leach (oxide only), concentrator (transitional and fresh only), or low-grade dump leach (all material classifications).

The Probable Mineral Reserve is based on Indicated Mineral Resources within resource block models regularised to 5 m (x) x 10 m (y) x 5 m (z). Only Indicated blocks have been considered for the Mineral Reserve estimate, with metal grades for Inferred blocks coded to zero before the first stage of model optimisation.

Costa Fuego Combined Mineral Reserves (Effective Date 27th March 2025)

^{1Mineral Reserves are reported on a 100% Basis – combining Mineral Reserve estimates for the Cortadera, Productora, Alice and San Antonio deposits, and have an effective date of 27 March 2025.}

^{2An Ore Reserve (declared in accordance with JORC Code 2012) was previously reported at Productora, a component of Costa Fuego, on 2nd March 2016 on the ASX. The Company was not subject to the requirements of NI 43-101 at that time.}

^{3Mineral Reserve estimation practices are in accordance with CIM Estimation of Mineral Resource and Mineral Reserve Best Practice Guidelines (29 November 2019) and reported in accordance CIM Definition Standards for Mineral Resources and Mineral Reserves (10 May 2014) that are incorporated by reference into NI 43-101.Mineral Reserve estimates are in accordance with the JORC Code.  References to “Mineral Reserves” mean “Ore Reserves” as defined in the JORC Code and references to “Proven Mineral Reserves” mean “Proved Ore Reserves” as defined in the JORC Code.}

^{4The Mineral Reserve reported above was not additive to the Mineral Resource. The Mineral Reserve is based on the 26 February 2024 Mineral Resource.}

^{5Tonnages and grades are rounded to two significant figures. 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. As each number is rounded individually, the table may show apparent inconsistencies between the sum of rounded components and the corresponding rounded total.}

^{6Mineral Reserves are reported using long-term metal prices of US$4.30/lb Cu, US$2,280/oz Au, US$27/oz Ag, US$20/lb Mo.}

^{7The Mineral Reserve tonnages and grades are estimated and reported as delivered to plant (the point where material is delivered to the processing facility) and is therefore inclusive of ore loss and dilution.}

^{8The 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), and 20% owned by Compañía Minera del Pacífico S.A (CMP).}

^{9The 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.}

^{10The San Antonio deposit is controlled through Frontera (100% owned by Sociedad Minera El Corazón SpA, which is a 100% subsidiary of Hot Chili) and Frontera is party to an Option Agreement pursuant to which it can earn a 100% interest in the property.}

^{11The Mineral Reserve Estimate as of 27 March 2025 for Costa Fuego was prepared by Anton von Wielligh, Fellow with the AUSIMM (FAUSIMM). Mr. von Wielligh fulfils the requirements to be a “Qualified Person” within the meaning of NI 43-101 and is the Competent Person under JORC for the Mineral Reserve.}

^{12Hot Chili Limited is not aware of political, environmental, or other risks that could materially affect the potential development of the Mineral Reserves other than those that will be disclosed in a technical report for the PFS. A detailed list of Costa Fuego Project risks is also included in Chapter 25.12 of the 2024 PEA.}

Mineral Resources

Costa Fuego Combined Mineral Resource (Effective Date 26th February 2024)

^{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.}

^{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).}

^{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.}

^{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.}

^{5 The Mineral Resource Estimates 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.}

^{6 All Mineral Resource Estimates 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 Productora, Alice and San Antonio.}

^{7 Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. Process recoveries:}

^{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)}

^{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)}

^{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)}

^{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)}

^{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)}

^{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.}

^{9 Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. These Mineral Resource estimates 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.}

^{10 The effective date of the estimate of Mineral Resources is February 26th, 2024. 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 Mineral Resource Estimates in the Resource Announcement continue to apply and have not materially changed.}

^{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.}