The West Australian | Matt Birney | Aug 09, 2022

RC drilling at Hot Chili’s Valentina deposit in Chile. Credit: File

Copper explorer Hot Chili has recorded its highest-grade intersection to date at the company’s Costa Fuego copper project in Chile whilst also extending the strike of its Valentina deposit by 120m.

Assays returned from RC drilling at the historical Valentina copper mine recorded an 8m intersection at 5.9 per cent copper equivalent from 27m.

The company says the copper equivalent breaks down to 5.7 per cent copper and 24.1 grams per tonne silver.

A deeper 2m intersection from the same hole read 1.9 per cent copper equivalent from 46m whilst a 7m section from a separate drill hole recorded 2 per cent copper equivalent from 163m.

Of the nine holes that have returned assays from the latest round of drilling, four recorded significant intersections.

Hot Chili says the latest results confirm continuity of the mineralised structure 120m south of current underground workings at Valentina.

Assay results are pending for 17 holes at Valentina in addition to 16 drill holes from the neighbouring San Antonio high-grade copper resource.

A total of 13 RC holes and three diamond drill holes have been completed at San Antonio with the aim of upgrading the deposit’s resource to “indicated” ahead of a planned resource upgrade for the Costa Fuego project.

The company says one of the diamond holes at Valentina recorded a stunning 17m visual intersection with results awaiting ore grade analysis.

Earlier this year the resource at Costa Fuego was estimated at 725 million tonnes grading at 0.47 per cent copper equivalent for 2.8 million tonnes of contained copper and 2.6 million ounces of gold.

Costa Fuego is at low altitude, about 600km north of the country’s capital, Santiago and only about 55km from the coast and the Las Losas port.

Hot Chili considers its operation to be one of the few global copper projects with low economic hurdles to clear and without infrastructure or permitting hurdles preventing timely production.

The Valentina prospect is only a few kilometres from the company’s three existing copper orebodies at Cortadera, Productora and San Antonio.

Of the three deposits, Cortadera hosts the lion’s share of the greater project with an indicated resource of 471 million tonnes at 0.46 per copper equivalent.

Despite much of the resource drilling focusing on Cortadera and Productora, San Antiono has delivered an encouraging 4.2 million tonnes grading at 1.2 per cent copper equivalent utilising only 4922 metres.

The Perth-based explorer says drilling is now underway at its Santiago Z porphyry target.

A recent report by market intelligence group S&P Global expects world-wide copper demand to grow from 25 million tonnes in 2021 to about 50Mt by 2035.

If upcoming assays from Valentina continue to break records for Hot Chili, the company’s production plans will potentially be one step closer to fruition.

STOCKHEAD | July 19, 2022

Pic: Via Getty Images

Hot Chili’s drill focus may have switched to other targets but the final development study drill hole at Cortadera has not disappointed, delivering a better than expected result.

Diamond hole CORMET004 returned a 484m intersection grading 0.5% copper equivalent (0.4% copper and 0.1 grams per tonne gold) from a down-hole depth of 548m that includes higher grade zones of 56m at 1% copper equivalent from 644m and 206m at 0.l7% copper equivalent from 800m.

The last of six development study holes drilled as part of a hydrological and geotechnical testwork program also confirmed further down-plunge extensions of the high grade core at the main Cuerpo-3 porphyry, with the intersection of a 44m zone grading 1% copper equivalent from 878m outside of the current high-grade resource domain.

Results from the program will be included in the next resource upgrade, expected in late 2022.

Metallurgical testwork yields rewards

And if this stellar result isn’t enough to whet your appetite, Hot Chili (ASX:HCH) has more up its sleeves.

Four diamond holes completed for metallurgical testwork across the Productora resource – three in the Productora central pit area and one into the Alice satellite pit area) – have also returned some impressive results.

While only the intervals to be used in the metallurgical testwork program were assayed, every hole returned good intersections such as 45m grading 1.2% copper equivalent from 280nm including 8m at 3.6% copper equivalent in MET027, and 39m at 1.1% copper equivalent from 46m including 12m at 1.5% copper equivalent in MET028 (Alice).

The company noted that the intersection in MET028 is particularly interesting as it is located near-surface in the higher-grade Alice porphyry satellite pit.

Not bad for drill holes designed to confirm the processing flowsheet with a focus on material that will be extracted in the first three years of production at Productora.

Development drilling wrapped up

These results come as the company slows down its tempo with just one drill rig operating on a single shift each day from the previous three rigs following the completion of development drilling and a focus on the upcoming resource upgrade and pre-feasibility study for the broader Costa Fuego project.

Results are currently pending for drilling undertaken across the high-grade San Antonio and Valentina satellite deposits.

Hot Chili has drilled 22 holes to date at Valentina with another eight holes still to be drilled while 12 holes have been completed with another four holes to be drilled at San Antonio.

San Antonio already hosts a resource of 4.2Mt grading 1.2% copper equivalent (1.1% copper and 2.1g/t silver), though this is a (admittedly higher quality) drop in the ocean that’s the broader Costa Fuego resource of 725Mt at 0.47% copper equivalent.

The new holes at San Antonio are designed to upgrade the categorisation of the resource from Inferred to Indicated, as well as testing for down-plunge mineralisation extensions.

Both deposits will be included in the next resource upgrade and subsequent PFS open pit mine schedule, which is expected in the first quarter of 2023.

Maiden drilling is also poised to begin on the large-scale Santiago Z prospect target in early August.

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This article was developed in collaboration with Hot Chili, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

STOCKHEAD | April 29, 2022

Pic: Chris Ryan, OJO Images via Getty Images

Hot Chili’s Cortadera porphyry discovery has returned a whopping intersection of 552m grading 0.6% copper equivalent in hole CORMET003 at the Costa Fuego Copper-Gold hub in Chile.

Importantly, this development study drilling at Cortadera continues to demonstrate growth potential following the recent Costa Fuego resource upgrade.

Other high-grade hits were also returned in CORMET003 recorded 552m grading 0.6% copper equivalent (0.4% copper, 0.2g/t gold and 89ppm molybdenum) from 276m, including 248m grading 0.8% copper equivalent (0.6% copper, 0.2g/t gold and 179ppm molybdenum) from 574m.

Hot Chili (ASX:HCH) says high-grade indicated resources, which currently stand at 156Mt grading 0.79% copper equivalent for 1Mt copper, 0.85Moz gold, 2.9Moz silver and 24,000t molybdenum will be expanded in the next resource upgrade planned for 2023. 

Productora Central RC assay results

Assay results returned for the first 11 deep reverse circulation (RC) drill holes completed at the Productora Central target have provided HCH with encouragement and further drilling is planned.

Productora Central is a 1.2km by 1km geochemical target, located along the western flank of the planned Productora open pit.

The most encouraging result was returned from drill hole PRF003, close to the Serrano fault where clay zones mask the target along strike to the northwest.

PRF003 recorded an end of hole intersection of 36m grading 0.2% copper, 0.1g/t gold, 0.5g/t silver from 290m, including 12m grading 0.4% copper 0.1g/t gold and 0.4g/t silver.

Interestingly, the hole ended in copper mineralisation and a diamond tail is planned to extend the drill hole this quarter.

The next phase of drilling will aim to penetrate the clay zone which is masking an area of elevated molybdenum along the Serrano fault.

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This article was developed in collaboration with Hot Chili, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

STOCKHEAD | April 26, 2022

Hot Chili’s Costa Fuego project is a high-quality, sizeable project. Pic: Sebastian Leesch / EyeEm via Getty Images

Hot Chili is not restiHot Chili and its exciting Costa Fuego hub with multiple coppery porphyries are Hot Chili and its exciting Costa Fuego hub with multiple coppery porphyries are undervalued by the market, according to Hannam and Partners.

The independent investment bank has initiated coverage of the company with a price target of $8 per share, which is almost 400% higher than the current price of $1.61.

H&P noted that the addition of the Cortadera project several years ago to the existing Productora project, which already had a pre-feasibility study, significantly transformed Hot Chili’s (ASX:HCH) Chilean portfolio.

Cortadera has proven to be a true winner with many thick copper-gold porphyry drill intersections leading to the definition of a 725 million tonne Indicated resource grading 0.47% copper equivalent that has plenty of room to grow.

Small wonder then that H&P believes the company is deeply discounted despite its exposure to what it considers to be a high-quality, sizeable project that could play a crucial role in filling the looming global copper supply deficit over the coming decade.

“With a new blockbuster resource and TSX-V cross-listing, an updated PFS due in Q3 2022 will merge several deposits for the first time and leverage HCH’s significant permitting and site design work already completed,” H&P explained.

“Combined with its relative low altitude and existing infrastructure advantages, we expect this to offer a fast-track to production and act as a significant catalyst for the stock.”

1 billion tonnes makes for attractive comparisons

The combined Costa Fuego development has a current resource of 927Mt at 0.45% copper equivalent, three times higher than the Productora resource back in 2016.

Much of this is due to the addition of Cortadera and over 52km of drilling carried out since then.

It also makes for an attractive enterprise value to measured and indicated resource (EV/M&I) of US$0.01 per pound of copper equivalent, which H&P said is the lowest of its direct peers and significantly discounted to the US$0.03/lb copper equivalent median of late-stage copper porphyry projects.

The upcoming Costa Fuego PFS is also expected to really highlight the project’s scale and attractiveness.

H&P modelled a 25-year mine life at 23.3Mt throughput to generate net present value of US$1.7 billion and internal rate of return of 27%.

Capital intensity and cash costs are also expected to be low at US$11,490 per tonne and US$1.47/lb respectively.

“We believe Hot Chili is well poised to deliver significant catalysts this year and remains funded for the next 18 months following a strategic investment from Glencore as well as a TSX-V cross-listing in January this year,” H&P added.

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This article was developed in collaboration with Hot Chili, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

STOCKHEAD | April 14, 2022

Hot Chili newest drill intersection has added more weight to the Cortadera high-grade core.

Hot Chili is not resting on its laurels despite a recent, sizeable resource upgrade with drilling returning yet another outstanding intersection of mineralisation at Cortadera.

Drill hole CORMET006 demonstrated the strong continuity of high-grade resources with +0.6% copper equivalent at Cortadera with the intersection of a 206m zone grading 0.9% copper equivalent (0.7% copper and 0.3 grams per tonne gold) within a much broader 876m intercept at 0.5% copper equivalent from a downhole depth of 246m.

Such results are pretty much par for the course at Cortadera – as can be seen here, here and here – and provide greater confidence in the Indicated Resource of 725 million tonnes grading 0.47% copper equivalent.

CORMET006 is the first of five development study diamond holes that Hot Chili (ASX:HCH) has already completed to aid with hydrological and geotechnical modelling with a sixth hole being planned.

While assays are pending for the four other completed holes, visual observations have recorded wide, strongly mineralised, intersections.

Productora drilling

Hot Chili is also giving some love to the Productora project, the other major part of its Costa Fuego copper-gold hub, with two diamond rigs drilling development holes and a reverse circulation rig undertaking exploration drilling.

Assays from both the Productora drilling and remaining Cortadera development study holes are expected shortly.

Costa Fuego has already drawn considerable attention from the likes of Glencore, which inked an offtake agreement with the company in early March.

Glencore – also Hot Chili’s largest shareholder – agreed to take 60% of copper concentrate from Costa Fuego for eight years from start of commercial production at “arm’s-length commercially-competitive” benchmark terms.

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This article was developed in collaboration with Hot Chili, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The West Australian- October 12, 2020

Hot Chili has unveiled a massive resource inventory hike announcing a close to three-fold increase in total tonnage its Southern American Costa Fuego discovery. The 724 million tonne resource, at 0.48 per cent copper equivalent now hosts an incredible 2.9 million tonnes of copper, 2.7 million ounces of gold and 9.9 million ounces of silver.

Hot Chili’s bounty is made even sweeter by the current copper, gold and silver prices which are continuing to reach for 5-year highs. Gold is trading at over US$1,900 an ounce, silver is sitting above US$25 an ounce, whilst copper is continuing its stellar march higher currently demanding more than US$6,600 per tonne.

The large-scale resource for Costa Fuego has been bolstered by the addition of the maiden resource for the record-breaking Cortadera discovery. Cortadera captured the markets attention late last year after delivering six world-class drill intercepts including 972m at 0.5 per cent copper and 979m at 0.4 per cent copper.

Cortadera is now more than likely to set tongues wagging once again with the maiden resource coming in at 451 million tonnes at 0.46 per cent copper equivalent.

The company says that Costa Fuego rates as the world’s largest new copper discovery in the recent years, muscling out Rio Tinto’s eye-catching Winu discovery from the top spot, with a higher overall grade and nearly 50 per cent more tonnes – not bad for a Perth-based junior with a market cap still sub $100m.

Generating a 451Mt maiden Resource for Cortadera a mere 14km away from our established Productora deposit (273Mt Resource) demonstrates the sheer scale of Hot Chili’s Coast Fuego copper hub.

Cortadera has a high-grade core of 104Mt grading 0.74% copper equivalent and this has strong potential to continue growing rapidly with further drilling.

Our first resource for Cortadera is particularly significant when considering it is one of just two major copper discoveries to have been reported in the world since 2016.

Not content to rest on their laurels, it would appear that Hot Chili is just getting started with the company also flagging the release of a maiden resource on its high-grade ‘satellite’ discovery at San Antonio and ongoing drilling set to trigger a resource upgrade for Cortadera during 2021.

Hot Chili’s resource inventory comfortably ranks its coastal copper hub as one of the largest overall resources in the terrane and one of the largest undeveloped copper resources in the world.

The company is currently utilising its in-house expertise to formulate a scoping study for the combined Costa Fuego resource and is assessing a combination of open pit and underground mining to supply ore to a central processing facility.

Metallurgical test work undertaken by Hot Chili indicates that the various ore types within the porphyry systems at Costa Fuego are amenable to a common processing methodology further supporting the model. The processing circuit is being designed around the use of saline water and conventional sulphide floatation to produce a marketable concentrate.

Hot Chili have also secured access to key infrastructure to the region, including surface rights, power, and the seawater pipeline easements, to support the processing facility in Chile.

The company has now stepped up its program across the project area, with continued drilling of the Cortadera North and Cuerpo2 targets at Cortadera. It is also looking to complete drilling at three growth targets within the environs of the new deposit to continue building its resource position.

Hot Chili’s Costa Fuego porphyry copper-gold project is located in the coastal region of Chile, around 600km north of the capital of Santiago and 50km inland from the port of Los Lasas. The project area hosts three main porphyry ore systems including Cortadera, Productora and San Antonio discoveries.

The region hosting the Costa Fuego tenure boasts outstanding infrastructure including the nearby port, power, the Vallenar mineral processing facility and a seawater pipeline to supply much needed process water to milling and processing operations. The existing mill at Vallenar is owned by the Chilean Government’s ENAMI group and sits a mere 15 km north of Hot Chili’s Productora mine.

Hot Chili is now ramping up the mining and processing of the near-surface, high-grade ores from Productora, with the company making full use of the nearby ENAMI facility. This processing arrangement continues to provide ongoing cash flow to help fund the Hot Chili’s exploration and development program in the region.

With a headline-grabbing resource now firmly under its belt in one of the world’s best copper jurisdictions, Hot Chili is set to take the next step. No doubt the company is likely to attract more than a few admiring glances from the world’s largest mining companies as it continues to build its resource book and add to what has become one of the world’s largest, undeveloped copper-gold deposits.