STOCKHEAD | Special Report | 12 Aug 2022

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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.

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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.

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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)

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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.