- Hot Chili has entered into an MoU with the existing Las Losas port facility in Chile
- The two parties will work together to undertake a port feasibility study for a bulk tonnage copper concentrate facility to be developed
- Hot Chili plans to fund 20% of the US$4.6m study for two years
Special Report: Hot Chili has executed a five-year MoU deal with Puerto Las Losas SA (PLL) to evaluate bulk tonnage loading alternatives for copper concentrate from the Costa Fuego project in Chile.
The MoU with PLL provides Hot Chili (ASX:HCH) the right (for up to five years) to negotiate a binding port services agreement for Costa Fuego, which would include a ‘take or pay volume’ clause based on at least 80% of the project’s future annual concentrate production.
Under the terms of the agreement, HCH and PLL will undertake a port feasibility study, comprising pre-feasibility engineering (FEL2), feasibility engineering (FEL3) and environmental studies.
HCH will fund 20% of the port feasibility study, which is estimated to have a total cost of ~US$4.6m and will take roughly two years to complete.
Upon completion of the port feasibility study – and provided that a shipping solution for loading copper concentrates is agreed at existing or potential infrastructure in PLL – HCH will have a right of first refusal (ROFR) to ship copper concentrates through PLL’s facilities in Huasco Bay for a three-year period.
PLL may terminate the ROFR by reimbursing HCH’s port feasibility study costs.
Unlocking a significant copper infrastructure corridor
“Leveraging an existing port, 50km away, into a bulk concentrate export facility has the potential to unlock significant capital and operating savings for Costa Fuego and other potential mine developers in the Huasco region of Chile,” HCH managing director Christian Easterday says.
“Hot Chili plans to jointly develop a significant copper infrastructure corridor, enabling our own production and unlocking multiple projects within the region, which would benefit significantly from desalinated water supply and proximal bulk copper concentrate port facilities.”
Port feasibility study to begin shortly
Within the coming months, PPL will be responsible for selecting a suitably qualified, top-tier, independent engineering company to carry out a port feasibility study.
This study will evaluate bulk handling and loading alternatives for copper concentrates using the existing Las Losas port facilities, potentially with or without modifying the existing infrastructure for the port in operation.
Representatives from both PPL and HCH will form a technical committee to progress the studies and within the first month, aim to define key project deliverables, as well as a timetable for management of the completion of the feasibility study workstreams.