Hot Chili closes US$15m investment by Osisko Gold Royalties for Chilean copper-gold project
StockHead | 26 July 2023
The company is now fully funded for its 30,000m drilling program in the coming weeks. Pic via Getty Images.
Hot Chili has closed its transaction with Osisko Gold Royalties, receiving proceeds of US$15 million in exchange for the sale of a 1% Net Smelter Return (NSR) royalty on copper and a 3% NSR royalty on gold across its Costa Fuego copper-gold project in Chile.
Not only is the transaction a significant endorsement of the project from one of North America’s leading royalty-streaming groups, it’s also a nice boost to the company’s cash position to around A$26m – which means the upcoming 30,000m drill program is fully funded.
The deal also clearly highlights the value Osisko attributes to the project.
Hot Chili (ASX:HCH) MD Christian Easterday says that Osisko’s involvement, alongside Glencore’s strategic shareholding, demonstrates “Costa Fuego is globally relevant, being one of only a handful of projects with potential to deliver near-term, meaningful, new copper supply into a looming global copper supply shortage.”
“We are very pleased to have closed the Investment with Osisko Gold Royalties enabling the Company to advance the project without the dilution of a share issuance,” he said.
Near-term drilling and PFS in H2
The Costa Fuego project has a massive measured and indicated resource of 725Mt grading 0.47% copper equivalent.
And the recent scoping study flagged an estimated copper equivalent production rate of 112,000t per annum – consisting of 95,000t of copper and 49,000oz of gold over a 14-year period of a 16-year mine life – to the estimated revenue and free cash flow of US$13.52bn and US$3.28bn down to the post-tax net present value (a measure of profitability) of US$1.1bn.
For context, that’s the equivalent of bringing another Oz Minerals (ASX:OZL) into production.
The project also has an inferred resource of 202Mt grading 0.36% copper equivalent, meaning there’s still plenty of room to grow with Hot Chili targeting a potential increase in study scale towards 150,000tpa copper for a +20-year mine life.
Now the Osisko deal is wrapped up, Hot Chili is well-funded to kick off its 30,000m drilling program in the coming weeks which is targeting a resource expansion, and exploration targets ahead of an upcoming resource upgrade by late 2023.
Hot Chili is also aiming to deliver the Pre-Feasibility Study (PFS) – which is currently around 80% complete – in H2 2024.
Hot Chili closes $22 million deal to boost copper play
The West Australian | 26 July 2023
Hot Chili’s Costa Fuego copper project has got a timely cash boost. Credit: Claudia Aliste/File.
A cashed-up Hot Chili will ramp up a new exploration campaign at its Costa Fuego project in Chile after banking $22 million in a strategic deal with leading United States royalty streaming group, Osisko Gold Royalties.
Management says money from the deal – from which Osisko will get a 1 per cent net smelter return royalty on copper and a 3 per cent royalty on gold – will be used to fund the next steps in its project’s development, including a 30,000m drilling program.
It will also help fund the completion of the project’s resource upgrade and the delivery of its much-anticipated prefeasibility study (PFS). The company has pencilled in late this year for its resource upgrade and the second half of 2024 for unveiling its PFS.
We are very pleased to have closed the Investment with Osisko Gold Royalties enabling the Company to advance the project without the dilution of a share issuance. Costa Fuego is globally relevant, being one of only a handful of projects with potential to deliver near term, meaningful, new copper supply into a looming global copper supply shortage.
Hot Chili managing director Christian Easterday
Management sees Osisko’s involvement as a heavy-hitting endorsement for the operation. It argues that the group’s presence, alongside mining giant Glencore’s strategic lead shareholding in the company, demonstrates Costa Fuego’s global relevance and the project’s potential to deliver a near-term, meaningful, new copper supply.
The company recently revealed a preliminary economic assessment (PEA) showing the project will spit out a whopping $309 million a year on average in free cash across a 16-year mine life.
With the impressive set of numbers outlined, the project is emerging as one of the world’s biggest and lowest-cost copper plays, with an estimated post-tax net present value (NPV) of US$1.1 billion (AU$1.66 billion).
Despite the eye-watering US$1.05 billion (AU$1.57 billion) Hot Chili says it will cost to build its project, it says its payback period will be just three and a half years. Average annual operating costs clocked in at US$1.33 (AU$2) per pound of copper in the study, positioning the company at the low end of the cost curve among its industry peers.
Keys to the lower-cost estimates include the fact that at its relatively low altitude, it does not face the extraordinary costs of having to pump water up into the mountains, in addition to the fact it has proven better recoveries using salt water and does not need an expensive desalination plant. It is believed those factors alone save the company about US$1 billion (AU$1.51 billion).
The economic evaluation pegged a long-term average selling price at US$3.85 (AU$5.76) per pound of copper and US$1750 (AU$2620) per ounce of gold. But the company says that for every extra 10 cents added to that copper selling estimate – and at a time when global predictions of a significant price hike are growing by the day – it will add another US$100 million (AU$150.1 million) to its post-tax NPV.
An pre-tax internal rate of return of 24 per cent and a pre-tax NPV of US$1.54 billion (A$2.30 billion) were also predicted in the study.
Costa Fuego holds 725 million tonnes of measured and indicated resources grading 0.47 per cent copper equivalent for 2.8 million tonnes of copper and 2.6 million ounces of gold with molybdenum credits.
A PEA study is similar in nature to an Australian JORC scoping study. Hot Chili believes its cursory assessment at its Costa Fuego project suggests it could churn out about 112,000 tonnes of copper equivalent each year for the first 14 years of an initial 16-year mine life.
American investment bank Morgan Stanley has already predicted copper to have a strong quarter, largely on its central role in anything to do with electrification and decarbonisation. Key to its success in the next few months could be a meeting of the Chinese politburo next week, where a much-anticipated package of economic stimulus could be announced, especially if it boosts spending on electric vehicles and electronics.
A shortage in copper has been widely predicted as demand heats up. According to global consultancy firm McKinsey, the want for the red metal is expected to increase to 36.6 million tonnes by 2031, compared to the current demand of about 25 million tonnes.
However, the copper supply is forecast to be around 30.1 million tonnes, leaving a gap of 6.5 million tonnes by the start of next decade.
So with a hungry market baying for more copper, Hot Chili will be keen to get some to the table in double quick time and its latest cash boost should make that pursuit a little easier.
Hot Chili copper play to spit out $309 million a year
The West Australian | Helen Barling | 28 June 2023
Hot Chili’s drill rig at its picturesque Cortadera project on Chile’s copper coastline. Credit: File
Hot Chili says its Costa Fuego project in Chile will spit out a whopping AU$309 million a year on average in free cash across a 16-year mine life.
With an impressive set of numbers outlined in a freshly-minted preliminary economic assessment (PEA), the project is emerging as one of the world’s biggest and lowest-cost copper plays, with an estimated post-tax net present value (NPV) of US$1.1 billion (AU$1.66 billion).
And in a heavy-hitting endorsement for the operation, leading US royalty streaming group Osisko Gold Royalties has tipped US$15 million (AU$22.4 million) into Hot Chili’s till.That up-front investment for down-the-track royalty payments is destined to fast-track the company’s ongoing prefeasibility study and will also be used to fund resource growth drilling.
Hot Chili managing director Christian Easterday says Osiko’s involvement, alongside mining giant Glencore’s strategic lead shareholding in the company, demonstrates Costa Fuego’s global relevance and the project’s potential to deliver a near-term, meaningful, new copper supply.
Osisko’s funding comes in exchange for a 1 per cent net smelter return (NSR) royalty on copper and a 3 per cent NSR on gold from across the Costa Fuego copper-gold project, which sits in the low coastal range of the Atacama Region, 600km north of the Chilean capital of Santiago.
Despite the eye-opening US$1.05 billion (AU$1.57 billion) Hot Chili says it will cost to build its project, it says its payback period will be just three and a half years. Average annual operating costs have clocked in at US$1.33 (AU$2) per pound of copper in the study, positioning the company at the low end of the cost curve among its industry peers.
Keys to the lower-cost estimates include the fact that at its relatively low altitude, it does not face the extraordinary costs of having to pump water up into the mountains, in addition to the fact it has proven better recoveries using salt water and does not need an expensive desalination plant. It is believed those factors alone save the company about US$1 billion (AU$1.51 billion).
The economic evaluation pegged a long-term average selling price at US$3.85 (AU$5.76) per pound of copper and US$1750 (AU$2620) per ounce of gold. But the company says that for every extra 10 cents added to that copper selling estimate – and at a time when global predictions of a significant price hike are growing by the day – it will add another US$100 million (AU$150.1 million) to its post-tax NPV.
An pre-tax internal rate of return of 24 per cent and a pre-tax NPV of US$1.54 billion (A$2.30 billion) are also predicted in the study.
Costa Fuego holds 725 million tonnes of measured and indicated resources grading 0.47 per cent copper equivalent for 2.8 million tonnes of copper and 2.6 million ounces of gold with molybdenum credits.
A PEA study is similar in nature to an Australian JORC scoping study. Hot Chili believes its cursory assessment at its Costa Fuego project suggests it could churn out about 112,000 tonnes of copper equivalent each year for the first 14 years of an initial 16-year mine life.
Hot Chili is now one of a select group of companies with a copper development project of this scale of production that is not controlled by a major. The Company is also advantaged by its coastal, low elevation location and abundant existing infrastructure, reducing its economic hurdle and resulting in one of the lowest capital intensity of its global peer projects.
Hot Chili chairman Nicole Adshead-Bell
While copper prices have softened in recent months from this year’s high of US$4.27 (AU$6.39) per pound, demand for the red metal is set to skyrocket.
Billionaire copper juggernaut Robert Friedland, of Ivanhoe Electric, recently weighed in on the looming copper “train wreck”, predicting prices could increase tenfold amid expected global shortages.
Mr Friedland, who has been instrumental behind major copper discoveries in Mongolia and the Congo, believes the metal’s longer-term prospects will be supported by decarbonisation, ongoing Chinese demand, the emergence of India as a significant industry player and re-militarisation in the wake of Russia’s invasion of Ukraine.
Copper is yet to find a place on the critical metals lists of most developing nations. However, the metal is crucial in the global push towards net-zero carbon emissions due to its thermo-conductivity properties. The European Union recently proposed that both copper and battery-grade nickel be classified as critical raw materials key to the energy transition in a move designed to bolster its supplies.
Meanwhile, Hot Chili is warming up the drill rigs to start a 30,000m drilling blitz to target resource extensions, in addition to exploring additional priority prospects designed to feed into a resource upgrade later this year. The company has also completed the lion’s share of a prefeasibility study, which is due to be released next year.
Importantly, it still has only 119 million shares on issue, giving it a genuine opportunity to raise equity without blowing up its capital structure.
Timing, as the saying goes, is everything. With copper prices yet to reflect the dangerously low shortages of the critical metal, Hot Chili looks poised to develop its low-cost Costa Fuego project at precisely the right time.
It has been some ride for the company since it listed in 2010. It survived when the copper industry was largely decimated by a price downturn to build up to a billion-tonne resource after adding the Cortadera project to its original Productora play.
And while its project on an established Chilean copper coastline might sit in the shadows of the towering Andes mountain range, it appears to now be well on the way to putting other ASX-listed copper hunters in the shade.
Chilean Navy inks land deal for Hot Chili copper play
The West Australian | Matt Birney | 7 Dec 2022
The Chilean Navy and Hot Chili have come to a land use agreement Credit: File
Chile-focused copper player Hot Chili has put pen to paper on a land access deal with the South American country’s navy to extract sea water for its proposed Costa Fuego project processing plant.
The navy access deal grants Hot Chili access to the defence authority’s maritime concession 60km northwest of the Costa Fuego project in order to pump water from the ocean.
Hot Chili’s use of sea water will boost the project’s green credentials through negating the need to tap groundwater.
The Perth-based copper hopeful has spruiked the eco-cred of its project due to the fact it will be built on an existing infrastructure footprint, is close to some of Chile’s largest solar farms and will produce an arsenic-free concentrate.
Costa Fuego’s ore reserve currently sits at 166.9 million tonnes going 0.43 percent copper for 716,800t and grading 0.9 g/t gold for 470,000 ounces.
The company in September reported a total project mineral resource of 725Mt containing 0.38 per cent copper for 2.755Mt and grading 0.11 g/t for 2,564,000 ounces of gold.
That figure was nearly double the 2021 estimate achieved largely on the back of a 128Mt mineral resource expansion of the centrepiece Cordatera deposit.
Cordatera was acquired in 2021 from Chile’s SCM Carola and sits near two historic copper mines encompassed by Hot Chili’s third deposit, El Fuego.
The duo churned out high grade copper whilst active but have been shown little love by explorers in modern times.
Acquisition of what the company describes as a world-class resource was heralded as key to developing a long-life, large-scale copper mine by Hot Chili.
The deposit was expanded in November with the purchasing of adjacent tenements via a government auction.
As a result Cordatera now boasts a 5.2km prospective strike length and drilling on the new sites is expected by the company to begin imminently.
Chile produces some 28 per cent of the world’s copper, more than any other nation and like many others has set a bold climate change agenda to achieve net-zero emissions by 2050.
Targets set by Chilean government on industry include a 70 per cent reduction of greenhouse gas emissions on 2018 levels.
Hot Chili’s eagerness to become a clean green Chilean copper machine appears to sit well with the South American nation’s newfound environmental focus.
Hot Chili looks at fourth Chilean copper discovery
The West Australian | Matt Birney | 14 June 2022
Early drilling results from Hot Chili’s Valentina prospect has revealed a significant extension to the orebody with strong visual copper cores. Credit: File
Follow-up drilling on Hot Chili’s Valentina prospect, only a few kilometres from its three existing copper orebodies, has revealed a significant extension to the discovery with strong visual copper intersections. The discovery could beef up the numbers in the company’s pre-feasibility study on the low altitude, coastal Costa Fuego copper gold project.
Hot Chili has been driving the Costa Fuego deposits towards commercialisation for several years. The company says its low-cost overheads and proximity to local port export facilities make the project one of the most significant copper-gold discoveries of the past decade.
The explorer has been drilling out the Cortadera, Productora and San Antonio orebodies and the early indications from the Valentina drilling looks to be adding to the numbers associated with Costa Fuego.
The latest buzz has been generated from a 17m visual core of interesting copper mineralisation from 22m depth including malachite, copper clays, chalcopyrite, chalcocite and covellite.
An additional 8m visual estimate of interesting copper mineralisation from 28m depth shows chalcocite, cuprite, chalcopyrite, covellite, malachite, copper clays with cuprite, covellite and chalcocite all being all high-grade copper ore minerals.
The company says the visual estimates of sulphide and oxide minerals are not an accurate representation of final assay values and are provided for indicative purposes only.
It is expecting the lab results for the 10 drill holes Hot Chili has punched into Valentina in the coming weeks with another eight drill holes planned into the step-out target.
Hot Chili has two drill rigs currently spinning the bit at the Valentina and San Antonio deposits, 5km east of its Cortadera copper porphyry discovery.
Once the current round of drilling at Valentina and San Antonio is completed, Hot Chili is shifting to test several large growth targets including Santiago Z and porphyry extensions along strike from Cortadera.
A wider look at Costa Fuego so far has delivered an indicated resource of 391 million tonnes grading 0.52 per cent copper equivalent, containing 1.7 Mt of copper, 1.5 million ounces of gold, 4.2 Moz silver, and 37kt molybdenum as well as an inferred resource of 334Mt grading 0.44 per cent containing 1.2 Mt copper, 1.2 Moz gold, 5.6 Moz silver and 27 Kt molybdenum, at a cut-off grade of 0.25 per cent copper equivalent.
Hot Chili controls 80 per cent of the Costa Fuego operating company, Sociedad Minera La Frontera that wholly owns the project.
It says port access and associated services negotiations are progressing well with initial proposals under discussion.
Hot Chili gets a whole lotta love after visual copper intercepts at Valentina
STOCKHEAD | Special Report | 14 June 2022
Copper-gold love for Valentina. Pic: via Getty Images
The Cortadera porphyry deposit continues to deliver the high-grade goods for copper developer Hot Copper-gold prospectivity at Hot Chili’s Costa Fuego hub is not limited to its Cortadera and Productora projects as highlighted by strong visual copper from drilling at the Valentina deposit.
Diamond hole VALMET-002 recorded a 17m intersection of “interesting” copper mineralisation from a depth of 22m including 8m of “very interesting” mineralisation such as chalcocite, cuprite and covellite, which are all high-grade copper ore minerals by molecular weight.
Importantly for Hot Chili (ASX:HCH), the intersected zone is located about 120m south of existing underground mine workings at Valentina, which effectively extends the high-grade copper zone at the project by the same amount.
While visual observations are purely indicative and in no way a replacement for laboratory assays, they do provide a good idea of whether mineralisation has been intersected.
More to come
Two rigs are currently operating at the Valentina and San Antonio copper deposits about 5km east of the company’s outstanding Cortadera copper porphyry discovery.
10 holes have been completed to date at Valentina with a further eight holes planned, and assays from VALMET-002 are expected to be released in the coming weeks.
Once drilling at the two deposits is completed, further drilling is planned to test several large growth targets including Santiago Z and extensional porphyry targets along strike from Cortadera.
Hot Chili has also extended pre-feasibility studies to capture additional metallurgical test work opportunities across all deposits at Costa Fuego and preliminary mine planning is being extended to allow the incorporation of new resource growth from drilling in 2022.
Costa Fuego currently has a massive 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.
Other updates include imminent results on ongoing port negotiations and final development study drill results from Cortadera and Productora once all results have been received.
This article was developed in collaboration with Hot Chili, a Stockhead advertiser at the time of publishing.
Hot Chili’s best copper intercept highlights value of satellite drilling
STOCKHEAD | Special Report | 12 Aug 2022
Image courtesy Getty Images
Hot Chili has intersected its highest grade intersection at its Costa Fuego copper hub in Chile with the hole at the Valentina deposit returning 8m grading 5.9% copper equivalent.
The intercept of 8m at 5.7% copper and 24 grams per tonne (g/t) silver from a depth of 27m (VAP0009) also outlines the potential of Valentina to be the second high-grade satellite for Costa Fuego.
VAP0009 also extends high-grade mineralisation at the deposit by 120m to the south of the shallow historical mine development.
Hot Chili (ASX:HCH) is now looking forward to assays from diamond hole VALMET0002, a twin of VAP0009 which recorded a stunning 17m visual intersection.
Assay results are pending for a further 17 drill holes at Valentina as well as 16 drill holes from the neighbouring San Antonio high grade copper resource.
Drilling at Valentina is aimed at defining a maiden resource estimate while San Antonio drilling is designed to upgrade resources from Inferred to the higher confidence Indicated category while testing for down-plunge mineralisation extensions.
Both high-grade satellites will be included in the next resource upgrade and subsequent Pre-Feasibility Study open pit mine scheduling which is expected in the first quarter of 2023.
They are expected to provide valuable front-end ore which could make a positive material impact on the payback period and overall project economics of the Costa Fuego copper-gold development.
First drilling is underway at the large-scale Santiago Z target, part of a potential regional porphyry cluster south of the company’s Cortadera porphyry copper-gold discovery.
Valentina and San Antonio satellite deposits
First phase drilling at Valentina is focused primarily on proving continuity of the mineralised trend along strike of the successful 2018 drill campaign.
Mineralisation is interpreted to be fault-hosted, dipping steeply towards the east within a sequence of volcanic sedimentary units, similar to the deposit setting of the neighbouring San Antonio resource.
At San Antonio, the 13 reverse circulation holes have infilled and extended the mineralised trend along interpreted high-grade plunging shoots, with most of the drill holes supporting the current interpretation of structure and mineralisation at San Antonio.
Three diamond holes were also drilled to provide material for metallurgical testwork, which is essential for including the resource in the Costa Fuego PFS.
Scorching drill results for Hot Chili at Cortadera ahead of resource upgrade and PFS
STOCKHEAD | Special Report | 20 May 2022
Pic: Frantic00/iStock via Getty Images
The Cortadera porphyry deposit continues to deliver the high-grade goods for copper developer Hot Chili, with the latest drilling program from the development striking a massive hit of 658m at 0.6% copper equivalent.
That’s a good grade over a very wide width for a porphyry, where copper resources far lower in grade can be cash cows thanks to their incredible scale.
Cortadera is part of Hot Chili’s (ASX:HCH) Costa Fuego, one of the only low altitude copper developments globally with a near term development timeline.
The strike of 658m at 0.4% copper, 0.2g/t gold and 122ppm molybdenum came from just 232m downhole, with narrower intersections of 134m at 0.8% CuEq, and 130m at 0.9% CuEq from 470m and 662m depth at the main Cuerpo 3 porphyry.
Those results in hole CORMET005 are the latest example of Cortadera’s capacity to outperform expectations.
“The PFS in-fill drill programme across Cortadera has collected important geotechnical and hydrogeological information and has also continued to define and expand high grade resources,” HCH managing director Christian Easterday said.
“Upgrading our resources with wide drill intersections grading 0.8% to 1.0% copper equivalent is a great outcome, which demonstrates the quality and growth potential of Costa Fuego as one of the only low-altitude, material, copper developments in the world capable of near-term development.”
High grade continues to expand
Hot Chili, which has an offtake partnership with one of the world’s largest metals traders in Glencore to back its plans to enter production at the proposed Chilean mine, has an indicated and inferred resource at Cortadera of 451Mt at 0.46% CuEq including 2.086Mt of copper equivalent metal and 1.663Mt of copper and 1.9Moz gold in the ground.
That’s on top of a 273Mt resource at the nearby Productora at 0.52% CuEq for 1.215Mt Cu and 810,000oz Au.
But development study drilling at Cortadera ahead of a planned PFS continues to highlight opportunities to grow its high grade resource, with multiple wide and high grade strikes outside the existing resource.
That includes 30m at 1.4% CuEq (1.1% copper, 0.5g/t gold and 165ppm molybdenum) from 690m in hole CORMET005, which is outside the current high grade resource (anything above 0.6% CuEq).
It builds on recently reported drill results from Cuerpo 3 including 552m at 0.6% CuEq from 276m deep, including 248m at 0.8% CuEq, and 876m at 0.5% CuEq from 246m, including 206m at 0.9% CuEq.
Diamond drill hole CORMET002 has also returned 370m at 0.4% CuEq (0.3% Cu and 0.1g/t Au) from surface at the Cuerpo 2 porphyry, including 20m at 0.8% CuEq from 24m and 22m at 1% CuEq from 136m depth. The high grade intersections are both outside the current high grade resource at Cuerpo 2.
A final development study drill hole is still being completed at Cortadera, with four metallurgical diamond drill holes completed at the Productora orebody.
Productora also contains a probable ore reserve of 166.9Mt at 0.43% copper, 0.09g/t gold and 138ppm molybdenum for 716,800t of contained copper metal, 470,700oz of contained gold and 23,100t of molybdenum with payable metal of 562,900t Cu, 191,900oz Au and 11,200t Mo.
Satellite drilling under way
The scale of Costa Fuego is such that there are multiple deposits likely to be developed once the mining operation is under way.
Just 5km northeast of Cortadera, Hot Chili boasts the San Antonio and Valentina deposits, two high grade satellite orebodies where HCH plans to grow its resources through drilling.
Ten drill holes are planned at Valentina, where drilling is already under way, with another 13 to be sunk into San Antonio. Both are expected to be part of Costa Fuego’s next resource upgrade and its combined PFS open pit mine schedule this year.
San Antonio already boasts a maiden inferred resource reported in March of 4.2Mt at 1.2% CuEq (1.1% copper and 2.1g/t silver) for 48,000t of copper and 287,000oz of silver.
Meanwhile platform and access clearing is expected to be complete in the coming week at the Santiago Z exploration target, another high quality copper prospect at Costa Fuego.
Drilling will commence at Santiago Z after Hot Chili wraps up at Valentina and San Antonio.
Located immediately south of Cortadera, soil results and mapping have confirmed a large potential copper porphyry footprint at the Santiago Z measuring over 4km in length and 2km in width.
Hot Chili Hits 11.8% Copper And 53g/t Silver At Valentina
The Assay | Colin Sandell-Hay | 24 Aug 2022
Hot Chili Limited (ASX: HCH) (TSXV: HCH) has drilled a new, shallow high grade, copper-silver drill intersection from its Valentina copper deposit in Chile.
The new drill result represents exceptional near-surface grades, providing an exciting potential additional front-end ore source for the company’s Costa Fuego coastal range copper-gold development.
Assays results returned for VALMET0002, a twin Diamond Drill (DD) hole of Reverse Circulation (RC) drill hole VAP0009 recorded 3.0m grading 12.1% CuEq (11.8% Cu & 52.6g/t Ag) within a broader drilling intersection of 12m grading 4.6% CuEq (4.5% Cu & 16.5g/t Ag) from 25m depth down-hole.
The result confirms a significant 120m extension of high grade, copper-silver mineralisation to the south of the historical Valentina underground mine and provides material for development-related metallurgical testwork, key to the inclusion of the Valentina Resource in the Costa Fuego combined prefeasibility study (PFS) due in Q1 2023.
Copper soluble analysis has confirmed that mineralisation is principally sulphide (chalcocite, chalcopyrite, covellite) and amenable to flotation recovery, thus key to Valentina’s potential to contribute to early sulphide cash flow generation.
Valentina Shaping as a High Grade Ore Source Addition at Costa Fuego
Mineralisation at Valentina is now defined over approximately 300m strike, and is open at depth and along strike. In addition to VALMET0002, new significant intersections from the phase-2 drill programme also include:
• 5m grading 1.5% CuEq (1.5% Cu, 7.8g/t Ag) from 179m (VAP0017) including 2m @ 3.3% CuEq (3.2% Cu, 16.4g/t Ag)
• 2m @ 2.0% CuEq (1.9% Cu, 6.7g/t Ag) from 45m (VAP0016)
• 2m @ 1.5% CuEq (1.5% Cu, 9.3g/t Ag) from 68m depth (VAP0013)
• 3m @ 1.5% CuEq (1.4% Cu, 8.2g/t Ag) from 24m (VAP0015) Results have been returned for eleven of the seventeen phase-2 drillholes with assays pending for six drill holes.
Of the 11 drill holes returned, four drill holes recorded significant drill intersections (outlined above), three drill holes intersected the mineralised structure (0.2% to 0.5% Cu), one drill hole intersected historical workings (ineffective), and three drill holes did not intersect mineralisation.
Phase-two drilling at Valentina has focussed on proving continuity of the mineralised trend along-strike and at-depth below the historical shallow underground mine.
The results of VAP0017 (5m grading 1.5% Cu, 7.8g/t Ag, including 2m grading 3.2% Cu, 16.4g/t Ag) confirm continuity of the steeply dipping mineralised host-structure, 100m below historical mine workings.
Importantly, high grade results recorded in VAP0009 and VALMET0002 lie on the southern extent of drilling in an area previously masked at-surface by a shallow horizon of Atacama gravels. Significant extensional potential remains untested in this area.
Mineralisation is interpreted to be fault-hosted, dipping steeply towards the east within a sequence of volcanic-sedimentary units, similar to the deposit setting of the neighbouring San Antonio resource (Inferred resource of 4.2Mt grading 1.2% CuEq (1.1% Cu, 2.1g/t Ag) for 48kt Cu and 287koz Ag)