ASX Announcement

7th December 2020

Water Rights Secured for Costa Fuego Copper-Gold Super Hub

Highlights

• Crucial water extraction rights granted for the Company’s Costa Fuego coastal copper development in Chile
• Water extraction rights represent a critical infrastructure requirement for Costa Fuego, securing sufficient water supply to support a large-scale conventional copper-gold operation
• Water extraction rights for sea water processing (no de-salination plant) adds to Costa Fuego’s growing credentials as one of the leading new “green” copper developments (existing infrastructure footprint, adjacent to largest solar projects in Chile and clean arsenic-free concentrate)

Hot Chili Limited, through its Chilean subsidiary company Sociedad Minera El Aguila SpA, is pleased to announce that it has been granted a Maritime Concession for extraction of sea water just 60 kilometres from the Company’s Costa Fuego coastal copper-gold development in Chile.

Costa Fuego has a combined Mineral Resource of 2.9Mt copper, 2.7Moz gold, 9.9Moz silver and 64kt molybdenum (released to ASX 12th October 2020) and is located at low altitude (800m to 1,000m), along the Pan American highway and adjacent to port facilities, 600km north of Santiago.

Following a rigorous seven-year application process, Hot Chili is now one of the few copper developers in Chile controlling a Maritime Concession for water. This adds significantly to critical infrastructure access requirements already secured including surface rights and water and electricity easements.

The water rights represent a major step forward in establishing an infrastructure-ready major coastal copper development which can leverage from a central processing and combined infrastructure approach.
Pre-feasibility studies completed in 2016 (contemplating Productora only) modelled the extraction of seawater via a 62km buried water pipeline from the coast to Productora (as announced to ASX 2nd March 2016). All metallurgical testwork results to date from Costa Fuego have achieved strong metal recoveries using sea water processing.

The seawater pipeline design is now planned to be increased and extended to Cortadera, as the new operating centre for the combined Costa Fuego development.

The maritime concession alone is considered a significant asset, and further enhances the Company’s social license to operate ensuring no ground water will be used and no de-salination plant is required.

The Directors of Hot Chili are pleased with advances being made with Chilean regulatory applications and growing local community support for Costa Fuego.

This announcement is authorised by the Board of Directors for release to ASX.
For more information please contact:
Christian Easterday
Managing Director
Tel: +61 8 9315 9009
Email: christian@hotchili.net.au
or visit Hot Chili’s website at www.hotchili.net.au

ASX Announcement

11th December 2020

Annual Ore Production Cap with ENAMI Increased by 50%

Highlights

• Hot Chili has expanded its agreement with Chilean government agency ENAMI for the mining and processing of ore from the Company’s Productora copper-gold project
• Concession for maximum annual production lifted by 50% to 180,000 tonnes per annum
• Ore supply from Productora planned to account for all remaining capacity at ENAMI’s nearby Vallenar oxide and sulphide processing facility
• New decline access being developed in the Productora underground mine

Hot Chili Limited, through its Chilean subsidiary company Sociedad Minera El Aguila SpA (SMEA), is pleased to announce a significant expansion to its lease mining and processing agreement with Chilean government agency ENAMI.

The Company has granted ENAMI a further concession for an additional 60,000 tonnes of oxide ore supply per annum to their Vallenar processing facility, located 15km north of Productora.

The concession for lease mining and processing now allows a maximum180,000 tonnes per annum of oxide and sulphide ore supply from Productora. The Increased production rate accounts for all remaining processing capacity at ENAMI’s oxide and sulphide processing facility.

The Productora joint venture company SMEA (80% Hot Chili) will be paid US$2 per tonne for ore purchased by ENAMI and a 10% royalty on the sale value of extracted minerals subject to ENAMI toll treatment conditions (as announced to ASX on 26th March).

Since the ENAMI agreement was first announced in late March this year, the royalty component has provided significant upside exposure to the copper price which has increased from US$2.15/lb to and eight year high of US$3.57/lb today.

Ramp-up of lease mining is underway following recent mine plan and permitting approval at Productora (as announced to ASX on 11th November 2020). The lease mining team is currently extending the existing decline to access new ore development below the Productora underground mine.

Once access to new development is In-place, the lease mining team expects to increase its production rate which has been limited to small-scale remnant ore extraction to date.

The Directors of Hot Chili are pleased with this next positive step forward in its local partnership with Chilean government agency ENAMI.

This announcement is authorised by the Board of Directors for release to ASX.
For more information please contact:
Christian Easterday
Managing Director
Tel: +61 8 9315 9009
Email: christian@hotchili.net.au
or visit Hot Chili’s website at www.hotchili.net.au

ASX Announcement

1st December 2020

$25.6M Institutional Placement to Secure Cortadera Copper-Gold Discovery and Accelerate Drilling

Highlights

• Successful A$25.6M private placement led and supported by several of Australia’s top resource funds
• New funds satisfy next acquisition payment of US$10M for the Cortadera copper-gold discovery in Chile, ensuring 100% control is maintained
• An aggressive 40,000m Phase-4 drill programme at Cortadera is now fully funded for 2021 and set to be significantly accelerated to five shifts of drilling per day using three drill rigs
• Expansion drilling at Cortadera has recorded a second 500m wide intersection of porphyry mineralisation – results pending
• Resource upgrades over the next 12 months expected to add significantly to the Company’s combined Costa Fuego development, currently standing at 2.9Mt copper, 2.7Moz gold, 9.9Moz silver and 64kt molybdenum (as announced to ASX on 12th October 2020)

Hot Chili Limited (ASX Code: HCH) (“Hot Chili” or the “Company”) is pleased to announce that it has successfully arranged a $25.6 million institutional-led private placement to sophisticated and professional investors through the issue of shares at 4.2 cent per share (the “Placement”). Veritas Securities acted as lead manager to the Placement.

Funds from the Placement will primarily be used for payment of the second instalment of US$10 million for the 100% acquisition of the Cortadera copper-gold discovery and commencement of a 40,000m Phase-4 drill campaign. Phase-4 drilling is scheduled to commence early in the New Year utilising two Diamond (DD) drill rigs and one Reverse Circulation (RC) drill rig based on five shifts of drilling per day.

The Placement clears the way for Hot Chili to maintain its control over the world-class Cortadera copper-gold discovery and fund an aggressive growth strategy at a time of resurgent copper and gold price conditions.
Ongoing expansion drilling has recorded further exceptional widths of porphyry mineralisation, continuing Cortadera’s strong run of results.
Hot Chili’s Managing Director Christian Easterday said “the institutional backing of the Placement was pleasing and a strong endorsement of Hot Chili’s growth strategy and continuing success at Cortadera.”

“This funding provides certainty over our ability to deliver multiple catalysts in the year ahead.”

“With copper price at seven-year highs, we are poised to accelerate our plans for Cortadera and position the Costa Fuego coastal copper project as one of the world’s leading new copper developments.”

Upcoming News Flow

The Company plans to provide several drilling and operational updates over the coming weeks following strong advancement across multiple work streams, including:

• Expansion DD drill results pending from Cuerpo 2 at Cortadera (CRP0053D). Preliminary details of a broad 500m intersection of porphyry mineralisation recorded in CRP0053D were reported to ASX on 11th November.
• The current DD drill hole from Cuerpo 3 at Cortadera (CRP0052D) is drilling to a planned down-hole depth of 1,200m, testing the south-east extension of the main porphyry. CRP0052D has also recorded a broad 500m intersection of porphyry mineralisation and still remains in mineralisation at its current depth of approximately 1,000m.
• Between 500m and 1,000m down-hole depth, CRP0052D recorded a visual estimate of 0.5% – 3.0% chalcopyrite contained as fine dissemination and in association with 1% to 10% B-vein abundance. Visual estimates of sulphide minerals are not an accurate representation of expected assay value and are provided for indicative purposes only.
• First pass RC drill results across the Cortadera North target. The first four holes across the large surface molybdenum anomaly at Cortadera North have been completed with results pending. Clearing is now underway to provide access to the remaining six planned drill holes which will target the large Induced Polarisation (IP) chargeability anomaly and areas of outcropping copper-bearing B-veins.
• Lease mining and processing of high grade ore at Productora. Ramp-up of production is continuing and the Company expects to provide an update shortly on ongoing discussions related to expansion of production with Chilean government agency ENAMI.

Details of the Placement

The Company has arranged a Placement of 609,800,000 new shares in two tranches to raise $25,611,600 with sophisticated and professional investors as defined by section 708 (8), (10) and (11) of the Corporations Act 2001.
The issue of 597,895,238 shares under Tranche 1 of the Placement will not be subject to shareholder approval and will be made within the Company’s 25% placement capacity under Australian Securities Exchange (ASX) listing rules 7.1 and 7.1A.

A total of 353,963,243 new shares will be issued within the Company’s 15% placement capacity under listing rule 7.1 and a total of 243,931,995 new shares will be issued within the Company’s additional 10% placement capacity under listing rule 7.1A.

Following the issue of the Placement shares, the Company’s remaining placement capacity under listing rule 7.1 and 7.1A will be 11,934,749 ordinary securities.

The issue of 11,904,762 shares to Blue Spec Sondajes Chile SpA, a Company associated with Hot Chili’s chairman Murray Black, under Tranche 2 of the Placement will be subject to shareholder approval.

Each new share will be issued at a price of 4.2 cents.
The Company will convene a general meeting seeking shareholder approval of the issue of Tranche 2 Placement shares, anticipated to be late-January 2021.

The issue price of 4.2 cents per new share represents a 14% discount to the Company’s last closing price and an 18% discount to the 15-day VWAP of Hot Chili shares prior to the trading halt announced on Monday 16th November 2020.

Shares issued under the Placement will be fully paid ordinary shares in the Company and will rank equally with shares currently on issue.
Settlement and issue of the Placement shares is expected to occur on or around Friday 4th December 2020.

This announcement is authorised by the Board of Directors for release to ASX.
For more information please contact:
Christian Easterday
Managing Director
Tel: +61 8 9315 9009
Email: christian@hotchili.net.au
or visit Hot Chili’s website at www.hotchili.net.au

Speaker: Steve Garwin, Hot Chili Chief Technical Advisor

Speaker: Steve Garwin, Hot Chili Chief Technical Advisor