Stockhead: Four Copper Stocks Poised to Ride the EV Boom

Stockhead

18th August 2021

Reuben Adams

The global economic recovery, coupled with the mass adoption of lithium batteries in the EV sector, has seen copper rally as much as 120 per cent from the crash of March 2020.

Copper is heavily used in the manufacturing of a wide range of goods, and the strong demand for the metal is perceived as a sign of economic health. Hence the nickname ‘Dr Copper’.

The outlook is extremely strong, says Barclay Pearce Capital equities trader, Joseph Raad.

“EVs contain approximately four times as much copper as conventional cars,” he says.

“2020 saw the global electric car stock reach 10 million units, a 41 per cent increase from 2019, and a conservative EV outlook by 2030 suggests that such stock will reach approximately 150 million vehicles and account for 7 per cent of the global vehicle fleet.”

The significant outpace in demand has left many analysts forecasting copper market deficits amid further declines in inventories over the coming years.

The price of copper could soar above $US20,000 per tonne, says Raad, up from a current price of ~$US9400/t.

That’s an incredible increase. Just look at the historic chart:

Here are four ASX copper stocks to watch from Barclay Pearce: one explorer, one project developer, and two producers.

HOT CHILI (ASX:HCH)

This copper project developer has locked in $40m of funding to acquire the Cortadera copper-gold porphyry discovery in Chile “and deliver rapid resource growth”.

This includes a $35m private placement cornerstoned by mining major Glencore, which will emerge as HCH’s biggest shareholder (9.99%).

Hot Chili’s managing director Christian Easterday says Glencore’s investment and involvement “is a strong endorsement of our future”.

HCH is now funded to deliver a major resource upgrade and pre-feasibility study for the wider ‘Costa Fuego’ project, which has a current resource of 2.9Mt copper, 2.7Moz gold and 9.9Moz silver and 64,000t molybdenum.

LOCKSLEY RESOURCES (ASX:LKY)

The 470km2 ‘Tottenham’ copper gold project in NSW is a historic site, largely underexplored by modern standards.

The recently listed stock has set an initial exploration target at the ‘Carolina’ and ‘Mount Royal’ deposits of 90,600 gold ounces and 86,100 tonnes of copper.

Early drilling priorities include upgrading this potential project resource to JORC 2012 standards and extending it with immediate exploration.

OZ MINERALS (ASX:OZL)

Strong copper prices in the first half of 2021 gave a nice sheen to OZ Minerals’ half year results.

Record copper prices helped drive revenues to $986 million in the first half, giving OZ around $134 million cash on hand with no debt.

$7.4 billion capped OZ is up more than 15% year to date and almost 60% over the past 12 months.

SANDFIRE RESOURCES (ASX: SFR)

Sandfire exceeded annual copper production guidance at its Degrussa mine in WA, producing 70,845 tonnes of copper and 39,459 ounces of gold for FY21.

Its revenue rose by 24 per cent to a record $813m thanks to surging copper prices.

DeGrussa’s reserves are set to run out in the third quarter of 2022, with Sandfire facing a brief period without production before it opens its Motheo copper mine in Botswana in early 2023.

The $1.2 billion market cap producer has secured the mining licence for Motheo, and is now ready for a full scale construction of the US$279 million ($364 million) project.

At Stockhead, we tell it like it is. While Hot Chili is a Stockhead advertiser, it did not sponsor this article.

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Four copper stocks poised to ride the EV boom – Stockhead

The West Australian: Hot Chili to move to full ownership of Cortadera with $40m raise

The West Australian, Bulls N Bears

2nd August 2021

Matt Birney

Hot Chili Managing Director, Christian Easterday and Senior Project Geologist, Cristian Vasquez

Nine years ago, Hot Chili won the prestigious Emerging Company Award at Diggers & Dealers in Kalgoorlie and this week the company is presenting there again as one of only two companies worldwide to have made a major copper discovery since 2016 which has now attracted the interest of a mega resource house that is no slouch when it comes to developing large projects.

Hot Chili’s new dance partner at its rapidly developing Costa Fuego porphyry copper-gold project in Chile is Glencore, one of the largest natural resource companies in the world.

Glencore has agreed to pump A$14.4m into Hot Chili in return for a 9.99 per cent equity stake and an offtake agreement that will see it pick up 60 per cent of Hot Chili’s substantial offtake over an 8-year period at market prices.

Glencore will also have the right to appoint a Director to the Hot Chili board and also to its technical steering committee.

Glencore’s rights are subject to it maintaining at least a 7.5 per cent equity position in Hot Chili.

Hot Chili’s world-class Cortadera copper-gold discovery in Chile is part of the company’s colossal Costa Fuego porphyry copper-gold project and lies within the coastal region of Chile, around 600km north of the capital of Santiago. Unlike many other South American mineral projects, it has a rare low altitude site, with good access to infrastructure and only 50km by road to the port of Los Lasas. The company has government mining and processing approvals in place and has been granted an essential water licence. Additionally, it gets the environmental green tick as it can access solar power and seawater processing technology projects.

The current copper-gold resource for the Costa Fuego porphyry copper-gold project is a whopping 2.9 million tonnes of copper, 2.7million ounces of gold, 9.9 million ounces of silver and a not-to-be-sniffed-at, 64000 tonnes of molybdenum. The company says the metallurgy of its resource is excellent, allowing good recoveries at minimum cost with an arsenic-free copper-gold concentrate product.

The Costa Fuego porphyry copper-gold project area now hosts five porphyry discoveries including the massive Cortadera, Cortadera North and Productora projects in addition to the more modest San Antonio and Valentina ore systems. Hot Chili’s share performance has benefited from the company’s serious discoveries and is now 300 per cent higher than it was when it made the Cortadera deal in 2019. The company has a market capitalisation of $115 million and approximately $3.5 million in the bank.

The Cortadera acquisition and development timeline is extraordinary with the deal struck in early 2019, world-class drill results delivered by mid-2019, a maiden resource announced just over a year later.

40,000m of drilling was then kicked off in January this year and a major resource upgrade is expected by the end of 2021.

Cortadera is one of two major global copper discoveries of the past five years or so – the other is Rio Tinto’s Revered Winu project in WA.

Hot Chili is fully funded to complete an aggressive drilling program this year aimed at extending the maiden JORC resource of 451 million tonnes grading 0.46 per cent copper equivalent reported for Cortadera last October. The company’s rival in the major copper discovery space Rio’s Winu has a maiden resource of 503Mt at 0.45 per cent copper equivalent.

Since landing the deal to acquire Cortadera, Hot Chili has featured regularly in compilations of the best drill intercepts from multi-metal programs around the globe, with some stunning, 500-950m-wide mineralised diamond drilling results that have underlined the scale of the system and the growing metal endowment from near-surface to depths beyond a kilometre. Recent results from the imposing copper-gold porphyry system indicate that the deeper roots of the deposit host higher-grade copper mineralisation which is always a good thing given the incremental cost increase in deep mining.

Hot Chili’s nest of porphyry copper-gold deposits at Costa Fuego already makes the project one of the most globally significant copper discoveries in the last decade and Glencore’s interest in the project underlines its potential to be a “tier-one” copper mineral resource – Glencore rarely gets out of bed for anything less.

Hot Chili management says it remains focussed on the expansion of the current global resource at Costa Fuego which it says is likely to host significantly more of the lucrative red metal than is currently showing on its resource statement. The company is already sitting on an impressive pile of saleable metal in what is only the formative stage of the exploration cycle for Cortadera and wider Costa Fuego area.

Hot Chili Managing Director and prime mover Christian Easterday is bullish about the project saying it is “one of the few low-altitude, no-arsenic, tier 1-location, infrastructure ready major copper resources” worldwide – and it would appear that he has convinced Glencore too.

To read the full news articles click on the link below:

Glencore to pump $14m into Hot Chili | The West Australian

Hot Chili heats up Cortadera’s open pit potential

Hot Chili Limited (ASX: HCH) has reported further drill results from the Cortadera copper-gold discovery in Chile. The results have expanded the deposit ahead of a global resource upgrade for the company’s Costa Fuego copper development.

Managing Director Christian Easterday commented:

“We commence the year with $34 million in treasury, 100 percent ownership of Cortadera, Glencore as a strategic investor and our Company now consolidated and dual-listed in Canada. It is pleasing to see further growth in Cortadera’s open pit potential with these new drill results.”

Full news click on the link below:

Market Index – Juniors on Radar: 5 ASX Explorers to Watch

By The Assay – TSX Edition 2022 | June 2022

Full news click on the link below:

Hot Chili Limited Big Cision in Big Copper – The Assay – TSX Edition 2022

Copper explorer ticks all the boxes key for successful large-scale-mine development

After battling to get market recognition on the Australia Stock Exchange, Hot Chili Ltd. has just completed a $34 million TSX.V initial public offering (TSXV: HCH, OTC: HHLKF) that will garner North American eyes on this evolving copper story.

There’s lots to like about Hot Chili. The company, which once traded at a high of A$37.00 on the ASX (2011), has plenty of good reasons for its stock to begin migrating back up toward historical highs. They’ve just announced a resource estimate that renders the flagship Costa Fuego project one of the world’s top 10 largest copper inventories not controlled by a major mining company and will have a pre-feasibility study in hand by the end of 2022, a definitive feasibility in 2024 and be producing copper by 2026.

The good news starts with the new resource estimate upgrade just announced that makes Hot Chili a standout copper resource holder on the TSX.V.  927Mt grading 0.45% CuEq for 4.1Mt of copper equivalent metal (3.3Mt copper, 2.9Moz gold, 12Moz silver and 81kt molybdenum).  Importantly, over 80% of Costa Fuego’s resource is classified as Indicated and over one third of the metal grades approximately 0.8%CuEq, and can be accessed by shallow open pit mining.

“The past year has been transformational in terms of reshaping the company. We’ve consolidated our capital structure and completed the exhaustive process of listing on the TSX.V and put ourselves amongst the senior copper developers in the world that have enjoyed significant appreciation with the copper prices going up,” says Christian Ervin Easterday, managing director and CEO of Hot Chili Ltd.

Hot Chili is developing the Costa Fuego project, a copper hub comprising two major deposits—the 100%-owned Cortadera porphyry deposit and neighbouring 80%-owned Productora porphyry-related breccia deposit. The most recent resource upgrade has also included the addition of the close-by, high grade, San Antonio deposit (4.2Mt grading 1.2% CuEq). While the company has been advancing Productora over the better part of the last decade (including a 2016 PFS), the resource potential took a step-change with the addition of the previously privately-owned Cortadera porphyry discovery in 2019.

“We have consolidated our copper deposits to form the Costa Fuego Copper Project – a major copper mining hub located on the Chilean coastal range. The centerpiece of our Chilean copper mining portfolio is the Cortadera porphyry deposit, regarded as one of the most significant copper-gold discoveries of the past decade in Chile,” says Christian Ervin Easterday, managing director of Hot Chili Ltd.

The Company’s profile is further bolstered by the location of the Costa Fuego project at low elevations (less than 1,000m elevation) in Chile’s coastal range, unique amongst senior copper developers in the America’s which are more used to high altitude locations – typically above 3,000m elevation in the high Andes.  Costa Fuego is situated almost 600 kilometres north of Santiago, next to the Pan American highway, with access to the power grid and 50 kilometres from the port of Las Losas.  Additionally, Hot Chili has surface rights and easements to establish a sea water pipeline and power transmission lines. Also unique is that Hot Chili has a maritime concession, water license, which was approved in December 2020 – a critical element of any project development in the world, not least of all in Chile’s Atacama region.

Global copper demand on the rise

Without new capital investments, Commodities Research Unit (CRU) predicts global copper mined production will drop from 20 million tonnes to below 12 million tonnes by 2034, leading to a supply shortfall of more than 15 million tonnes. Over 200 copper mines are expected to run out of ore before 2035, with not enough new mines in the pipeline to take their place.

Some of the largest copper mines are seeing their reserves dwindle; have to dramatically slow production due to major capital-intensive projects to move operations from open pit to underground. Examples include the world’s two largest copper mines, Escondida in Chile and Grasberg in Indonesia, along with Chuquicamata, the biggest open pit mine on Earth.

These cuts are significant to the global copper market because Chile is the world’s biggest copper-producing nation — supplying 30% of the world’s red metal. Adding insult to injury, copper grades have declined about 25% in Chile over the last decade, bringing less ore to market.

By 2020, the international industry’s head grade was 30% lower than in 2001, and the capital cost per tonne of annual production had surged four-fold during that time — both classic signs of depletion. According to the Goehring & Rozencwajg model, the industry is “approaching the lower limits of cut-off grades,” and brownfield expansions for many of the major copper miners are no longer a viable solution.

“Projects of the scale of Costa Fuego are hard to find. But they’re even harder to find at low altitude, sitting in the middle of infrastructure in one of the top three mining countries of the world. I think what most people don’t know is that over the past two decades head grades for copper have dropped to about half a percent from 1.6 percent copper and now it’s all about economy of scale and that’s the space we are in,” says Ervin Easterday.

Lower grades and increased demand shine a light on the importance of making new discoveries in establishing a sustainable copper supply chain. Over the past 10 years, greenfield additions to copper reserves have slowed dramatically, with tonnage from new discoveries falling by 80% since 2010—something that can’t be changed overnight.

Some of the world’s largest copper companies are doing everything they can to expand existing mines and acquire prospective new deposits, as they seek to replace their rapidly depleting copper reserves and resources.

But it takes many years to bring a copper deposit into production, even for the majors moving from open pit to underground. According to Bloomberg Intelligence, the average lead time from first discovery to first metal has increased by four years from previous cycles, to almost 14 years. In places like the United States and Canada, where miners face strict permitting regulations that can cause significant delays, it’s not unusual for a copper mine to take 20 years to develop.

“I guess you could say we are ahead of the crowd being 12 years into our journey already. There are few copper developers of our scale that have the near-term timelines to production we do,” says ErvinEasterday, who credits the recent Glencore investment on the Company’s advanced exploration and development, project scale and clean concentrate potential (no arsenic).

Vote of confidence from Glencore

Glencore became Hot Chili’s largest shareholder after a series of investments in 2021 where Glencore took a 9.96 percent stake. It also won a seat at the board in the form of Mark Jamieson and further management in the form of participation on the technical steering committee, positions it can hold onto as long as Glencore keeps a minimum 7.5 per cent stake in the company. The investment was backed up recently when Glencore agreed to an eight year off-take agreement to purchase 60 percent of the copper concentrate from Hot Chili’s Costa Fuego copper-gold project in Chile.

“We ensured project financing flexibility with 40 percent of our first eight years of concentrate production remaining uncommitted ahead of initiating project financing discussions in 2022, following completion of the Costa Fuego Pre-Feasibility Study. Glencore’s expertise and support is welcomed and is an important part of our strategy to transform the company into a material copper-gold producer.  It is unique to have one of the world’s largest miners as a major shareholder and off-take partner in advance of a PFS” says Ervin Easterday.

Boosting its international capability even further, Hot Chili recently appointed Dr Nicole Adshead-Bell as the company’s independent, non-executive chairman, after she joined the board in January. Residing in Canada, Dr Adshead-Bell has 25 years of technical and investment banking experience across the capital markets and resource sectors and sits on the boards of Toronto-listed Altius Minerals and ASX-listed Matador Mining.

Lots of exploration upside

Fresh with a world-class resource estimate, which is fast approaching 1 billion tonnes, and pre-feasibility in the works, there are no signs of Hot Chili resting on their laurels.

“Now that we have a strong treasury of $30 to $40 million, this year is also about growing our resources from within. We are moving with a series of drill holes on some of the larger scale un-drilled targets on the property,” says Ervin Easterday.

The last word

“I know there is some frustration with retail investors wondering just like myself, how a company holding an asset of the size, quality, location, infrastructure advantage and attracting the attention of one of the top three miners in the world would have a market capitalization at about a fifth of what it probably should be. That frustration is well understood, but we have not shied away from making important decisions. What we are doing her is putting together a 20-to-30-year mine plan on something that has the potential to produce upwards of $US1 billion in revenue annually on long-term copper prices. In addition, we are de-risking our project, and as we hit our catalysts and milestones over the next year, I’m sure the market will look after itself – value will always eventually rise to the top” says Ervin Easterday.

Hot Chili is determined to commission the Cortadera copper gold project by 2026, a time frame that would be the envy of most mining majors. Now with a locked in offtake agreement with Glencore and the further upside to its resource base, it appears Hot Chili will hit the ground running this year.

Full news click on the link below:

Hot Chili Ltd hits the ground running

Hot Chili Limited (ASX: HCH) (TSXV:HCH) (OTCQB: HHLKF) has released a major resource upgrade for its coastal range, Costa Fuego copper-gold project in Chile.

 Costa Fuego comprises the Cortadera, Productora and San Antonio deposits, all of which have updated Mineral Resource Estimates (MRE) and lie proximal to one another at low-altitude elevations (800m to 1,000m), 600km north of Santiago.

The resource upgrade follows 18 months of material investment, including completion of 52,000 metres of additional resource drilling at Cortadera, purchase of 100% of the Cortadera copper-gold porphyry discovery and execution of an offtake agreement with Glencore for future concentrate production (60% for the first eight years). The Cortadera MRE has delivered the majority of resource growth for Costa Fuego.

Cortadera is defined by over 92,000m of drilling and contains an Indicated resource of 471Mt grading 0.46% CuEq (previously 183Mt grading 0.49% CuEq) and an Inferred resource of 108Mt grading 0.35% CuEq (previously 267Mt grading 0.44% CuEq).

Cortadera’s Indicated resource has grown by 134% and is now able to be studied for conversion into ore reserves in the Company’s Pre-Feasibility Study (PFS), forecast for Q3, 2022.

The Productora MRE has been re-estimated following review of the 2016 MRE, completion of underground mine development and exploration drilling in 2021.

The review and subsequent resource re-estimation has resulted in a material increase in high grade Indicated resources reported above 0.6% CuEq.

 High grade open pit resources from Productora are a key focus for the combined PFS and are expected to feature prominently in the early mine schedule for Costa Fuego.

A maiden San Antonio MRE has also been added to the Costa Fuego Hub. San Antonio was historically exploited by small-scale underground mining of high-grade copper. The maiden resource estimate utilised an underground drone survey (increasing the spatial confidence of historic mining activities) and 4,922 metres of drilling undertaken by Hot Chili in 2018.

Managing Director Christian Easterday said the company is encouraged by the initial Inferred resource of 4.2Mt grading 1.2% CuEq.

The high-grade, shallow nature of San Antonio provides an additional open pittable deposit for Costa Fuego’s potential early mine schedule. Further resource upgrade drilling is planned at San Antonio and the nearby Valentina high-grade deposit in the coming months.

 “I would like to thank our entire team who have delivered this very strong result on-time and within guidance – elevating Costa Fuego’s position amongst the largest undeveloped copper projects in the world,” Mr Easterday said:

“The world is hungry for advanced, low-risk, senior copper developments with near-term production potential.

“Copper prices are driving higher and new meaningful copper supply is fast becoming a mirage.

“Hot Chili is well positioned to deliver into this forecast supply gap and contribute to the decarbonisation super cycle, particularly due to Costa Fuego’s lower economic hurdle resulting from its low elevation location and proximity to existing infrastructure; including abundant grid power with high renewables contributions.

“We are fully funded for 18 months and on-track to deliver our next resource upgrade and PFS later this year as we transform Costa Fuego into one of the world’s next material copper mines.”

Full news click on the link below:

Hot Chili Heating Up With Surge To Next Level Of Growth

Hot Chili has reinforced its Costa Fuego copper-gold hub’s position as a top tier development project after upgrading its higher confidence Indicated Resource by a massive 67%.

The upgraded Costa Fuego now features an Indicated Resource of 725 million tonnes grading 0.47% copper equivalent, or contained resources totalling 2.8Mt of copper, 2.6 million ounces of gold, 10.5Moz of silver and 67,000t of molybdenum.

This is more than 80% of its total resource and includes a higher grade Indicated Resource of 156Mt at 0.79% copper equivalent with contained resources of 1Mt of copper, 850,000oz of gold, 2.9Moz of silver and 24,000t of molybdenum – more than a third of the total contained resource.

The resource upgrade is another sign that Hot Chili’s (ASX:HCH) plans are coming together in a spectacular fashion, as it follows on the back of a key offtake agreement that will see Glencore buy 60% of the project’s copper concentrate production for an eight-year period at “arm’s-length commercially-competitive” terms.

Managing director Christian Easterday said the resource upgrade elevates Costa Fuego’s position amongst the largest undeveloped copper projects in the world.

“The world is hungry for advanced, low-risk, senior copper developments with near-term production potential. Copper prices are driving higher and new meaningful copper supply is fast becoming a mirage,” he noted.

“Hot Chili is well positioned to deliver into this forecast supply gap and contribute to the decarbonisation super cycle, particularly due to Costa Fuego’s lower economic hurdle resulting from its low elevation location and proximity to existing infrastructure; including abundant grid power with high renewables contributions.

“We are fully funded for 18 months and on-track to deliver our next resource upgrade and PFS later this year as we transform Costa Fuego into one of the world’s next material copper mines.”

Resource upgrade

The Costa Fuego upgrade is the culmination of 18 months of material investment, which included the completion of 52,000m of additional resource drilling at the Cortadera project – the main engine of growth for Costa Fuego.

Cortadera now has an Indicated resource of 471Mt grading 0.46% copper equivalent, a 134% increase over its previous estimate of 183Mt at 0.49% copper equivalent.

And there’s room for further growth with Costa Fuego hosting an Inferred Resource of 202Mt at 0.36% copper equivalent, or contained metals totalling 600,000t of copper, 400,000oz of gold, 2Moz of silver and 13,000t of molybdenum.

This includes a high-grade maiden resource of 4.2Mt at 1.2% copper equivalent at the San Antonio deposit, which represents an additional open pittable deposit for Costa Fuego’s potential early mine schedule.

Hot Chili is also planning to carry out further resource upgrade drilling at San Antonio and the nearby Valentina high grade deposit in the coming months.

Full news click on the link below:

Hot Chili resource upgrade launches Costa Fuego copper-gold to new heights

Hot Chili Ltd has backed up an investment by international trading house Glencore with an eight-year offtake agreement for the Swiss commodity trader to purchase 60 per cent of the copper concentrate from Hot Chili’s Costa Fuego copper-gold project in Chile.

Glencore became Hot Chili’s largest shareholder after a series of investments last year where Glencore took a 9.96 per cent stake in the ASX-listed venture. It also won a seat at the board in the form of Mark Jamieson and further management in the form of participation on the technical steering committee, positions it can hold onto as long as Glencore keeps a minimum 7.5 per cent stake in the company.

Hot Chili is developing the large-scale Costa Fuego project that is a copper hub comprising two major deposits the company has been proving up in recent years, Productora and Cortadera.

The deposits are 14 kilometres apart and within 50 km of the port of Huasco, making it one of the lowest altitude major developments in South America and one of the world’s largest undeveloped copper resources not controlled by a major mining company – hence the interest from Glencore.

Costa Fuego is projected by the company to be in production within five years. A preliminary feasibility study forecast annual production of 100,000 tonnes of copper and 70-80,000 ounces of gold.

The company boasts resources of almost four million tonnes of copper and 2.7 million ounces of gold at grades between 0.44 and 0.54 per cent copper equivalent. The Cortadera deposit, one of four, includes a high-grade core of 104 million tonnes grading 0.74 per cent copper equivalent.

Another round of drilling recently wrapped up ahead of an expected further resource upgrade. Final results from the drilling program that kicked off late 2021 have returned a number of significant intersections from the margins of the Cuerpo 2 and Cuerpo 3 orebodies at Cortadera.

One hole yielded 927m grading 0.3 per cent copper equivalent and 0.1 grams per tonne gold from just 14m depth. The results mean it now has the confidence to convert some of its resource from inferred to indicated and then progress to a pre-feasibility study, or “PFS”.

We ensured project financing flexibility with 40% of our first eight years of concentrate production remaining uncommitted ahead of initiating project financing discussions in 2022, following completion of the Costa Fuego Pre-Feasibility Study.

Glencore’s expertise and support is welcomed and is an important part of our strategy to successfully transform the company into a material copper-gold producer.

Hot Chili Managing Director Christian Easterday

Boosting its international capability even further, Hot Chili recently appointed Dr Nicole Adshead-Bell as the company’s independent, non-executive chairman, after she joined the board in January. Residing in Canada, Dr Adshead-Bell has 25 years of technical and investment banking experience across the capital markets and resource sectors and also sits on the boards of Toronto-listed Altius Minerals and ASX-listed Matador Mining.

Hot Chili is determined to commission the Cortadera copper gold project in a time frame that would be the envy of most mining majors. With a locked in offtake agreement with its major shareholder and further upside to its resource base it appears Hot Chili has hit the ground running this year.

Full news click on the link below:

Glencore doubles down on Hot Chili copper project

HOT Chili has confirmed it will sell 60% of its planned copper concentrate production from its planned Costa Fuego copper-gold development in Chile to Glencore.

The concentrate will be sold “on arms-length commercially competitive benchmark terms”.

The deal was flagged last year when Glencore acquired a 9.99% stake in Hot Chili for A$14.4 million.

While all relevant Costa Fuego development, production and financial metrics won’t be available till the completion of a prefeasibility study in the third quarter of this year, the possibilities with Glencore could involve 40,000t per annum of copper in concentrate.

That envisages the project being a 16-20 million tonne per annum processing operation producing in excess of 65,000tpa of copper equivalent metal in concentrate.

Costa Fuego has current resources of more than 700Mt grading 0.46% copper equivalent.

Last quarter Hot Chili dual listed on Canada’s TSX-V exchange, raising C$33.8 million in the process.

Shares in Hot Chili were up 17% to A$1.59 in midday trade, capitalising the company at $175 million.

Full news click on the link below:

Hot Chili confirms Glencore copper concentrate deal

Hot Chili and swiss-based resource company Glencore enter into an offtake agreement for future copper concentrate production at the Costa Fuego Project in Chile.

This offtake agreement covers 60% of copper concentrate from Costa Fuego for eight years from start of commercial production and is on ‘arm’s-length commercially-competitive’ benchmark terms.

Glencore is Hot Chili’s (ASX:HCH) largest shareholder (9.96%) following their strategic investment in August 2021 and have the right to board representation and participation in a technical steering committee.

Transformation into copper-gold producer

HCH managing director Christian Easterday said the quality of Costa Fuego continues to be “externally validated” with Glencore’s 2021 investments and now, with this offtake agreement.

“We ensured project financing flexibility with 40% of our first eight years of concentrate production remaining uncommitted ahead of initiating project financing discussions in 2022, following completion of the Costa Fuego pre-feasibility study,” he said.

“Glencore’s expertise and support is welcomed and is an important part of our strategy to successfully transform the company into a material copper-gold producer.”

Full news click on the link below:

Hot Chili and Glencore shake on giant eight-year copper offtake agreement