Hot Chili’s Cortadera copper discovery delivers strong copper results ahead of resource upgrade
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.
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.
Hannam and Partners: Hot Chili is deeply discounted despite quality project
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.
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.
Hot Chili’s latest copper-gold drill hit adds certainty to Cortadera high-grade core
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.
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.