By STOCKHEAD

Surfs up as Hot Chili signs options to acquire two previously producing copper mine areas near Costa Fuego. Pic: via Getty Images.

• Hot Chili is acquiring two previously producing copper mine areas that have never been drill tested
• The acquisition is in line with strategy to increase resources at Costa Fuego to underpin a copper production profile of 150,000tpa
• First pass RC drilling at the newly acquired Marsellesa and Cordillera tenements to begin in the coming week

Special Report: Flush with the ongoing success of its Costa Fuego development in Chile, Hot Chili is now moving to acquire two nearby copper mine areas that have never been drill tested before, despite previously reaching production.

With an indicated resource of 725Mt grading 0.47% copper equivalent underpinned by an attractive preliminary economic assessment (PEA) (a rough equivalent to a scoping study), Costa Fuego is rapidly emerging as one of the few projects in the world capable of delivering meaningful new copper supply that isn’t controlled by a major.

Under the PEA, Hot Chili (ASX:HCH) estimated the US$1.05bn project would be capable of producing 112,000t of copper equivalent (95,000t of copper and 49,000oz of gold) per annum over 14-years of a 16-year mine life.

Over this time, it would deliver revenue and free cash flow of US$13.52bn and US$3.28bn, respectively.

Post-tax net present value and internal rate of return – both measures of a project’s profitability – are estimated at US$1.1bn and 24% respectively.

While certainly attractive, the company is looking to increase its resource base to support an increase in Costa Fuego’s copper production profile to 150,000tpa ahead of its pre-feasibility study, which is expected to be delivered in the first half of 2024.

One of the first steps to achieve this objective was signing a binding letter of intent to acquire Bastion Minerals’ (ASX:BMO) ~56km2 Cometa project about 15km from Costa Fuego’s planned operating centre.

Historical producers offer “pipeline of opportunities” 

The new project options near Costa Fuego. Pic via Hot Chili

HCH’s latest option agreements to acquire the Marsellesa and Cordillera copper mine areas about 10km from the planned central processing hub at Costa Fuego are part of the company’s strategy to increase resources.

Both mine areas have been privately held and historically exploited for shallow copper oxide and copper sulphide material, but have never previously been drill tested.

Marsellesa measures 400x200m with mine workings exposing multiple zones of shallow-dipping, strata-bound (manto-style) copper mineralisation.

The smaller Cordillera mine workings expose outcropping porphyry copper mineralisation with well-developed stockwork and sheeted A and B style porphyry veining.

Along with Cometa, the new project additions provide the company with a pipeline of opportunities and additional optionality for the discovery of new mineral resources.

HCH will pay Marsellesa vendor Hermanos Pefaur up to US$1.35m and a 1% net smelter royalty (NSR) to acquire the project while Mr Arnaldo Del Campo – the holder of the concessions comprising Cordillera – could receive up to US$4m and a 1% NSR from underground operations and 1.5% NSR from open pit work if the option is exercised.

By STOCKHEAD

The expansion of Costa Fuego’s indicated resource is timely for Hot Chili ahead of the upcoming PFS. Pic via Getty Images

• Resources for the Costa Fuego project now total 798Mt @ 0.45% copper equivalent
• Over 59% of Costa Fuego’s resource is now classified as indicated
• Hot Chili has also completed a water supply concept study for the Huasco valley region of Chile, allowing it to develop a regional water business for the southern Atacama

Special Report: Hot Chili’s Costa Fuego copper-gold project in Chile has seen a 6% increase in copper equivalent contained metal and a 9% increase for the higher-grade component of the indicated resource.

Hot Chili’s (ASX:HCH) Costa Fuego project comprises the Cortadera, Productora (including Alice) and San Antonio deposits, all of which have updated resource estimates and lie proximal to one another, around 600km north of Santiago.

Over 85% of Costa Fuego’s resource estimate is now classified as indicated following 24 months of material investment and 24.5km of drilling across the project tenure.

This included a mix of development activities such as metallurgical, geotechnical, resource expansion and exploration drilling – all designed to progress the PFS on Costa Fuego towards completion in H2 2024.

Total indicated resources now sit at 798Mt @ 0.45% copper equivalent for 2.9Mt copper, 2.6Moz gold and 12.9Moz silver as well as 68,000t molybdenum, while inferred resources have now topped 203Mt @ 0.31% copper equivalent for 0.5Mt copper, 0.4Moz gold, 2.4Moz silver and 12,000t molybdenum.

Cortadera resource grows another 13%

At Cortadera, which has again delivered the majority of resource growth for Costa Fuego, Hot Chili completed 43 reverse circulation (RC) and diamond drillhole (DD) tails for 17,000m of additional exploration and resource extension drilling.

Cortadera’s indicated resource tonnage has grown by a further 13%, supporting the June 2023 preliminary economic assessment which outlined Costa Fuego as having the potential to be one of the world’s lowest capital intensity major copper developments.

It now contains an indicated resource of 531Mt @ 0.44% copper equivalent and an inferred resource of 149Mt @ 0.29% copper equivalent.

Meanwhile, the Productora resource has been re-estimated following an additional 16 RC and DD exploration drillholes for 5,000m with an additional 2.8Moz of silver metal at 0.35g/t, which has now been incorporated into the copper equivalent contained metal.

Indicated resources at San Antonio now total 3Mt @ 0.71% copper equivalent, while the inferred resource sits at 2Mt @ 0.41% copper equivalent.

Regional water supply opportunity

In other news, Hot Chili has completed a water supply concept study for the Huasco valley region of Chile, confirming the potential for a large, multi-user desalination water supply network.

While Costa Fuego’s mine development plan considers the use of raw seawater for future processing, the water supply concept study confirms potential to also develop a large, multi-user, desalination water supply business.

It outlines an opportunity to develop a potentially 100% renewable energy driven desalination water business to supply community, agricultural and new mining demand of up to 3,700 litres per second (L/s) over the long-term.

Staged development scenarios were assessed considering the initial development of a 300L/s desalination plant being supported by potential foundation off-take partners.

The company holds the only active granted maritime water concession and most of the necessary permits to provide critical water access to the Huasco valley region following over a decade of permitting for the Costa Fuego project.

‘The perfect marriage’

“One, single, desalination water supplier, with the potential to unlock several significant mining investments, is a blueprint for the future of responsible water supply in the Atacama,” HCH managing director Christian Easterday says.

“This is an exciting opportunity to surface value for Hot Chili, following over 10 years of investment to obtain the necessary water concession and permits.

“It brings together the perfect marriage of economic, environment and social benefits for a wide range of stakeholders.”

By Bulls N’ Bears

An aerial view over Hot Chili’s coastal site for its potential regional desalination water project. Credit: File

Hot Chili has unveiled a six per cent boost to the indicated copper-gold resource at its Costa Fuego project in Chile’s Atacama region, about 600km north of the Santiago capital, giving it an enhanced total of 3.62 million tonnes of copper-equivalent.

The company has also today confirmed that is has completed a concept study confirming the potential for a whopping long-term, regional multi-user desalination water supply network. Management believes such a move could trigger substantial mining investment in the area.

Hot Chili says 85 per cent of its mineral resource estimate now sits in the indicated category, with its proposed open pit development accounting for 93 per cent of the resource and seven per cent comprising the underground mining scenario.

The total Costa Fuego resource in the indicated category is 798 million tonnes grading 0.45 per cent copper-equivalent for 2.9 million tonnes copper, 2.6 million ounces gold, 12.9 million ounces silver and 68,000 tonnes of molybdenum. The total resource classified as inferred is 203 million tonnes at 0.31 per cent copper-equivalent for 500,000 tonnes copper, 400,000 ounces gold, 2.4 million ounces silver and 12,000 tonnes molybdenum.

The company says a high-grade component, classified as being more than 0.6 per cent copper-equivalent, has been increased by nine per cent and contains indicated resources of 173 million tonnes at 0.78 per cent copper-equivalent for 1.1 million tonnes copper, 1 million ounces of gold, 4.3 million ounces silver and 25,000 tonnes molybdenum.

High-grade inferred resources total 7 million tonnes grading 0.74 per cent copper-equivalent for 40,000 tonnes copper, 30,000 ounces gold, 100,000 ounces of silver and 1000 tonnes molybdenum.

The Costa Fuego project comprises the Cortadera, Productora, Alice and San Antonio deposits and management says all have updated mineral resource estimates. All deposits are in close proximity and sit at low altitude, about 800m to 1000m.

The company says most of the resource is within the Cortadera deposit, which contains about 64 per cent of total indicated resources and 69 per cent of total inferred estimates.

The Productera deposit has about 33 per cent of the indicated and 30 per cent of the inferred resources. The Alice and San Antonio deposits make up the remaining balance of the resource.

Management says the resources update follows 24,500m of drilling across the project, comprising a mix of resource expansion and exploration drilling, in addition to metallurgical and geotechnical work. Management says it has a strong platform to deliver a maiden mineral reserve in its upcoming prefeasibility study (PFS) that is expected to be completed in the second half of this year.

Meanwhile, the company’s now-completed concept study for a staged water network development is based on an initial 300 litres per second scale and is supported by a group of potential founding offtakers. The study is assessing a potential 100 per cent renewable energy-driven desalination water project with the potential to supply agricultural, community and new mining demand in the Huasco valley region, near the Costa Fuego project, of up to 3700 litres per second.

The opportunity to develop a regional water business for the southern Atacama is exciting. It brings together the perfect marriage of economic, environment and social benefits for a wide range of stakeholders.

Hot Chili managing director and chief executive officer Christian Easterday

Easterday said the company had spent more than 10 years of investment to obtain the necessary water concession and permits. The region contains six major undeveloped copper projects and two new, large-scale copper discoveries, with all projects requiring desalinated water supply.

The company says it holds the only granted maritime water concession and most of the necessary permits to provide much-needed critical water to the region. It says the Chilean Government is actively encouraging investment in multi-user water networks in the region, with water scarcity being one of the biggest obstacles facing new global copper supply.

Hot Chili is engaging with several potential infrastructure partners and reviewing the potential for direct government support to assist with driving the project forward.

With its copper resource growing bigger and with an expected high demand for the red metal due to the increased push for renewable energy in the future, Hot Chili could be poised to really heat up the mining sector.

By STOCKHEAD

Pic: via Getty Images.

• A 10,000m drilling campaign across 10 holes has kicked off at Costa Fuego
• Assays are back from four RC holes at the Marsellesa pit showing grades of up to 1% copper and six holes from Cordillera showing up to 0.4% copper
• Final stages of an upgrade to the mineral resource are being finalised

Special Report: The next phase of Hot Chili’s 30,000m resource growing expedition at its Costa Fuego copper-gold project in Chile has kicked off at seven large-scale targets adjacent to the Cortadera and Productora deposits.

Hot Chili’s return to drilling comes off the back of a landholding expansion of the project and a recent scoping study which estimated the >US$1 billion project can produce ~112,000tpa of copper equivalent (95,000t CU and 49,000oz Au) for an initial 14-year mine life.

Chile is renowned for its high-value copper deposits and is the largest producer of the red metal in the world, with heavy hitters such as BHP, Rio Tinto and JECO running the operations of world-class deposits.

Phased drilling

47 RC drill holes for 11,500m have been completed since Hot Chili (ASX:HCH) kicked off the extensive drill program in late July last year, and this round comprises 10 diamond holes to test four large-scale targets near Cortadera and three large-scale targets near Productora for a total of 10,000m.

Assays have come back from the late-2023 targets of Marsellesa, Cordillera and Correteo – all within 15km of Costa Fuego’s planned central processing hub showing grades of up to 1% copper across 500m of prospective strike length.

Four RC holes for 1,244m were completed and include:

• 25m @ 0.4% copper from surface, including 10m grading 0.8% copper from 7m depth
• 8m @ 0.8% copper from 1m depth downhole, including 4m grading 1.0% copper from 4m depth

HCH says the higher grade copper intersections are associated with both copper oxide and sulphide mineralisation and further work is being planned to assess mineralisation continuity.

The Marsellesa mine area is laterally extensive, measuring 400x200m, with historical open pit and underground mine workings exposing multiple zones of shallow-dipping, strata-bound (manto-style), copper mineralisation.

Six holes for 1,450m at Cordillera, 1km to the west of Marsellesa, showed up to 0.4% copper below and surrounding the historical small surface mine workings, including:

• 93m @ 0.3% copper from surface, including 14m grading 0.4% copper from surface
• 53m @ 0.3% copper from 19m depth, including 10m grading 0.4% copper from 44m depth

Eight RC holes for 2,324m were completed at the greenfield Corroteo exploration target, however, no significant intersections were recorded.

HCH is in the final stages of the resource upgrade for Costa Fuego, which is expected to be released this quarter.

By STOCKHEAD

The new El Fuego Option will also increase the company’s ownership from 90% to 100% at the San Antonio, Valentina and Santiago Z privately-owned landholdings. Pic via Getty Images

• Three options due for exercise in 2024 have now been terminated and replaced with one new option agreement
• Hot Chili’s new deal, named the ‘El Fuego Option’ covers the San Antonio, Valentina and Santiago Z privately-owned landholdings
• Updates on growth drilling, resource upgrades and water conceptual studies are expected in the near term

Special Report: Hot Chili has materially improved the terms of the El Fuego option agreement to acquire landholdings as part of the company’s Costa Fuego copper-gold project in Chile.

Hot Chili’s (ASX:HCH) 725Mt Costa Fuego project is rapidly emerging as one of the few projects in the world capable of delivering meaningful new copper supply that isn’t controlled by a major.

A recent PEA – the equivalent of a scoping study – estimated the US$1.05bn project would be capable of producing 112,000t of copper equivalent (95,000t of copper and 49,000oz of gold) per annum over 14-years of a 16-year mine life.

Over this time, it would deliver revenue and free cash flow of US$13.52bn and US$3.28bn, respectively.

HCH is now looking to increase its resource base to support an increase in Costa Fuego’s copper production profile to 150,000tpa ahead of its pre-feasibility study, which is expected to be delivered in the first half of 2024.

A new deal

HCH has now renegotiated terms over the El Fuego option which covers the San Antonio, Valentina, and Santiago Z privately owned landholdings along the eastern extent of the Costa Fuego project.

The new deal – originally due to exercise next year – will now be exercised in September 2026 with a revitalised agreement which comes with better terms for HCH.

Improvements to the deal include:

• A material reduction to HCH’s option payments due in 2024 from US$11m to US$1m;
• An increase to HCH’s ownership from 90% to 100%, subject to the exercise of the option;
• Extends the option expiry from 2024 to 2026 in exchange for payments of US$4.3m over the next three years

Strength of local partnerships in Chile

HCH managing director Christian Easterday says the option re-negotiation is further confirmation of the strength of the company’s local partnerships in Chile.

“Alignment of local partners has been a key element of our consolidation strategy for Costa Fuego,” he says.

“The El Fuego Option allows the company to focus its balance sheet on exploration and growth of our mineral resource as opposed to property payments.

“Our near-term focus on increasing value per share and leverage to future copper price for our shareholders centres around enhancing Costa Fuego’s mineral resource and potential economics in advance of a planned pre-feasibility study.”

Easterday says the company is “actively” evaluating the region for consolidation opportunities and expects to see further success on this front as it looks to up-scale Costa Fuego’s potential study scale towards a 150kt per annum copper development from its current 95kt per annum copper metal production scale.

Updates on growth drilling, resource upgrades and water conceptual studies are also expected shortly.

Acquisition delivers pipeline of opportunities

HCH announced the move to acquire two nearby copper mine areas that have never been drill tested before – despite previously reaching production – around 10km from the planned central processing hub at Costa Fuego.

The latest option agreements to acquire the Marsellesa and Cordillera copper mine areas are part of the company’s strategy to increase resources.

The new project options near Costa Fuego. Pic via Hot Chili

Both mine areas have been privately held and historically exploited for shallow copper oxide and copper sulphide material but have never previously been drill tested.

Marsellesa measures 400x200m with mine workings exposing multiple zones of shallow-dipping, strata-bound (manto-style) copper mineralisation.

The smaller Cordillera mine workings expose new, outcropping porphyry copper mineralisation with well-developed stockwork and sheeted A and B style porphyry veining.

Think and Act Differently: transforming our oldest industry with our newest technology

We hear the term ‘transformation’ a lot lately – because it is a time of great change in the world. The pace of change, driven and enabled by technology, is increasing. And so it’s appropriate that we’re here talking about transformations in mining. But what is it that we’re transforming to? What are we seeking to become?

The world is starting to wake up to the role of the resources sector to support the global trends that are changing the world.

These trends will feed demand for metals and minerals for decades to come.

But new deposits are harder to come by. 

What remains is deeper, harder to find, more difficult to access, or in more challenging locations.

And we have to produce those commodities in those locations with less – less energy, less water, less waste, less disruption – a fraction of the impacts traditionally caused by intensive mining activity.

I would ask us all to stand in the future for a moment – what do we see? 

I see people removed from the line of fire, reducing both the risk of both safety and health impacts as we automate the work we do.  

I see value chains with automated decision processes that lead to reduced power and water use and improve our productivity, contributing to responsible mining, and enhancing our ability to increase return on capital every day. 

I see the democratisation of data with citizen developers throughout the value chain making processes run more efficiently, and digital twins enabling accurate prediction of problems to allow better maintenance and operational upgrades.  

Under this vision, the processes we will be working on will be fundamentally different – we will have solved for in situ recovery, we will have eliminated energy hungry mill and float to use new and different ways to liberate the minerals we seek.  

In doing so, we will have the ability to produce the commodities we need with a fraction of the waste, and whatever waste we do produce, can be repurposed into useful products. 

Our power will have zero greenhouse gas emissions – and I believe nuclear energy will be a part of the baseload mix in the global elimination of carbon emissions rich energy.  

As more of our systems and decisions are automated, we will become the orchestrators of improvement and innovation – the skills we need for the future must embrace highly digital operational and project management as the way we deliver value and efficiency. 

We will fundamentally change what we consider to be an attractive resource. 

The sub 0.5% copper resources of tomorrow will be just as attractive as the 2% copper resources of yesterday, delivering the critical minerals the world needs to decarbonise at low cost.  

This means the mine waste of the past, will become some of the new resources of the future.

As we stand in the future I see an exciting, safe and automated sector, valued by society for the types of work it provides.

How do we set ourselves up to do this? At BHP we want to Think and Act Differently. But we also need to do it with urgency.  

So how do we build a solution?  What are we doing in BHP?

The solution

It’s been said before that data is the new gold – but we have to know how to use it.

Every mining operator generates reams of data. But it is how this information is captured, distilled, analysed, stored and used that makes the difference. You get out what you put in – quality outputs from quality inputs – or the alternative, garbage in, garbage out.

The opportunity – the prize – is clearly massive. 

But there is no change without innovation.

Building the ecosystem

Firstly, we need to expand the ecosystem of ideas that we are exposed to – we are not in every pool of expertise, but we must be more open to conversations and ideas than ever before.

We know that not every good idea is our own idea. 

I’m sure all the companies, universities, research groups represented here today have some very smart people working for them. We certainly do at BHP. But we know that the world of ideas is broader than our own company or our own industry.

And so we’re looking outwards to build an ecosystem of ideas, with a partnership mindset.  So what have we done…

We are changing the way we work…

BHP Innovation has adopted an open innovation model, we are transparent about the ambitious opportunities and challenges we are working on and invite collaborators from universities, industry peers, adjacent industries and start-ups to join us.

We work with expert scanning and scouting partners, as well as ecosystem collaborators, like Deloitte’s new GreenSpace Tech ecosystem or MIT’s Industrial Liaison Program including their Startup Exchange.

We want to accelerate the technology development roadmaps of our partners and share in their success, not lock up their IP or restrict their growth potential. 

We intend to Think and Act Differently in all our interactions.

We are also willing to invest.  

BHP Ventures, our own Venture Capital arm, has been in action now for about 3 years. It is focused on emerging technologies that can help grow and improve our existing operations, our resource base, and our value chain.

It has screened more than 1,200 opportunities and built a high-quality global portfolio of over 20 holdings and continues to go from strength to strength. 

We are thinking and acting differently about exploration. 

Our exploration accelerator, BHP Xplor, merges concepts from venture capital and early-stage accelerators. We announced BHP Xplor in August 2022 and had many applications from all around the world, focused on the discovery of copper, nickel and other critical minerals. We’ve worked with seven companies, to provide funding and support to accelerate their growth.  Wave 2 is coming soon…and I hope that all those from our first cohort can speak to this as a positive experience.

Operationally we also seek to be different, we have evolved our relationships with many of our vendors – we seek to partner to solve some of our biggest opportunities… this maybe quite tactical such as the partnership between Minerals America Technology, Escondida Operations and Microsoft to improve Escondida Concentrator recoveries… 

A program that uses artificial intelligence and machine learning, to combine real-time plant data from the concentrators and AI-based recommendations from Microsoft’s Azure platform to feed our operations team information so they can adjust variables that affect ore processing and grade recovery.
This is the building of an eco-system, the setting of a foundation of partnerships and ways of working that is different – so what is that making possible.

What it’s delivering

Using these ecosystems, we must use data to drive solutions to make systems run better.

Partnering on tech and innovation is making our sites safer and more sustainable as we think and act differently to deliver real results.

One of the best ways we can reduce safety risks is through removing people from the frontline. 

Where we have implemented truck automation at Jimblebar and Newman in Western Australia, there has been a 90% reduction in near miss events involving vehicles with a fatality potential.  

We have extended automation to our fleets in Western Australia and here in Queensland and we are in implementation at Spence and Escondida in Chile.

Decision automation using real time data feeds from on the board fleet management systems provides a more efficient and productive result, shift in and shift out, delivering more safe tonnes per truck per year.

The advance of autonomous haulage by OEMs like Komatsu, Caterpillar – delivered in partnership with companies such as BHP are the first stage for decarbonisation…

The next stage is zero emission trucks…and at BHP we are investing in electric – even as we watch the hydrogen journey like hawks. We have a great partnership with Caterpillar and have a prototype truck running about in Arizona.  We have advanced plans that consider trolley assists, recharging station distribution and dynamic charging as a part of the mine design of the future.  Anna Wiley has presented BHPs vision of the electrified future here this week.

We can only create future value by through strong partnerships with our OEMs.

The other side of the equation is the need for sensible, innovative solutions to be shared for the collective benefit of the sector.

Our Operation and Technology teams at our Newman operation recently won their category at the Safety Excellence Awards run by the Western Australian government, for a remotely operated thermal lance for removing debris jams in crushers. It connects to a boom, meaning no more handheld thermal lances, removing people from potential harm from uncontrolled energy release.

BHP is licensing the design on a royalty-free basis so it can be used across the industry, worldwide – so please do get in touch with us if you want more information.

Tech and innovation supports better exploration.

Over the last couple of years BHP has re-organised our exploration team to seek out new deposits located across four global regions.  We recognise that the old ways in which we approached exploration will not serve us as well in a new deeper, under-cover type of world.

We have leveraged the systems thinking of the petroleum industry and seek to understand the dynamic system required to emplace a new ore deposit – we aim to look at the earth in a different way.

I have to acknowledge the many BHP Petroleum colleagues who worked with the mineral geologists to develop and mature a minerals systems model using the extensive BHP datasets. 

They have built a new way of thinking of the accumulations and concentrations of metals in given regions to inform our exploration search spaces. Those interested in more deeply understanding this can refer to the paper presented yesterday in this conference by Dr Cam McCuaig.

We also partner with those who bring new eyes, a different way of thinking and challenge to our process – the AI/ML partnerships such as those with DeepIQ/SRK, and Kobold are such examples.  

And as we home in on our new targets we recognise the importance of new ways of using and collecting data.  BHP Innovation, the Resource Centre of Excellence and Olympic Dam geologists and geometallurgists, have applied the first sparse 3D Hardrock Seismic Survey across the Olympic Dam deposit with very interesting results.

This work is an adaption of modern-day hard-rock seismic methodologies (again borrowed from the petroleum industry) and successfully applied across an ore deposit.  This will accelerate resource characterisation and the targeting of drillholes – ultimately reducing cost and time to production.  

If you are interested, check out a series of three papers presented at this year’s Australasian Exploration Geoscience Conference, led by Kathy Ehrig, Heather Schijns, and Jared Townsend, that explore these concepts more deeply. 

And so what is old, or known in one industry, is being refashioned, accelerated and innovated to deliver new and exciting results today.

Collaborating on tech and innovation changes production and reduces waste. 

At BHP, we have organised to have Digital Factories at all our operated assets, seeking to resolve problems through application of digital solutions using agile methodologies and strong asset sponsorship.

Let me give you an example. We all know product variability is a challenge across the industry. When we over or underestimate the quality of ore shipped to customers, it impacts the value we create.

So our digital factories got to work and came up with the Product Variability program, which we’ve been using at West Australian Iron Ore.

The technology used a Grade Adjustment Model that uses data sources to capture movements of ore across the supply chain in real time to map the grade coming from the mine.

We then use an application called StacksOn to maintain a 3D model of material in the stockyard, so we know what to load when.

The program addresses a fundamental issue in an innovative way. It is materially adding value to our operations, and we’re rolling it out across other commodities.

We have a Value Engineering team who work with operations to build dynamic models to answer questions about value chain performance and anticipated improvement options – able to define where capital spend, operational or improvement effort should be applied to maximise value, the team is in high demand across our business. 

From modelling capital spend at NiWest, to defining the improvement activities to maximise throughput in the Escondida Concentrators, to predicting maintenance in train loadout stations in the WAIO, we are using data to define, measure and solve for the production impacts of tomorrow through dynamic modelling and digital twins.

At all stages of production, whether in exploration, in trucking, or extraction, we seek ways to innovate or disrupt… but we can only do this by thinking and acting differently.

How to support it

The evolution of the new mine site – safer, smarter, more automated and less manual – means the capabilities we need to run these operations are changing

We’re moving to a world where we are less hands on. 

We increasingly need more people with digital skills right through our sector from the innovators to the front lines of production and maintenance. We need to bring workers with us on that journey. We simply don’t have enough of them.

The good news is that today’s generations of primary and secondary students are picking up digital skills as they learn coding etc at school; the base language of digital analysis is being engrained early. 

The concept of a ‘citizen developer’ is built on this growing familiarity and comfort with code – and it’s important that the industry recognises the opportunity in these new generations of future resource sector workers.

At BHP, we enable people to register as a citizen developer to work on BHP problems. They are formally onboarded, supported with access to resources like security groups and environment access, and provided with education and training. There are more than 300 registered citizen developers at BHP, working individually and in collaborative communities.

The outcomes are exciting – for example, an app that improves on a complex escalation process for safety and environment events within our integrated remote operating centre has been a game changer for that team. The app was built by a processing specialist with no coding experience – he just saw a process that could be improved and set about doing it. 

The industry needs more citizen developers. We need to train them now, and we need to make sure they see the mining industry as stable, attractive – dare I say exciting and future facing. 

Conclusion

In conclusion, to deliver what the world needs, means identifying, developing and implementing digital and technical innovations – some of it novel and maybe a little scary(!)… and investing now in the people we need to find, build and work the mines of the future.

We all need to be thinking about setting ourselves up to do this now; Build our ecosystems, be open to new partnerships and ways of working, and be organised to move faster – driving ourselves forward with data, with people close to the opportunity finding the solution and then sharing the outcome for us all to use. 

The data this industry can capture is increasing apace with the speed and quality of our capability to analyse it the only limiter. The opportunities to improve will be driven by our use of this data as much as by any other factor.

These mines of the future are vital to help to deliver the world of the future and a surer pathway to net zero. A transformation of mining, to deliver a global transformation by mining.

The Mining Journal | Paul Harris | 27 July 2023

Australian copper developer Hot Chili is looking to increase the scale of its Costa Fuego project in Chile as it advances towards a prefeasibility study (PFS), MD Christian Easterday told Mining Journal at the Rule Symposium in Boca Raton, Florida, US.

With the PFS 80% complete and due early in 2024, the company is looking to add to the mine life and production scale, with a 30,000m drilling programme to commence soon.

“Hopefully, we can take advantage of an upscale opportunity to scale this project up from around 100,000tpa of copper production for a 16-year life with 50,000oz of gold production towards a 22 or 23-year mine life and upscaling this towards 150,000tpa.

“This would make it not only one of the largest projects in the development pipeline outside of a major but would allow the cash costs to be reduced and sit within the first quartile for the industry,” Easterday said.

Easterday said the project has a lower-than-average capital intensity of $10,000/t of annual copper production capacity, compared with a $17,000-18,000/t average.

“The last cycle for copper was unfortunately littered with a number of projects which saw significant overruns on capital. It is about being able to build these with the correct economics that produces quick paybacks and, ultimately strong returns. [The project in Chile’s Coastal Belt] is about half the cost it would be if it were in the high Andes alongside our global peers,” said Easterday.

Last man standing

Hot Chili is listed on the ASX and uniquely positioned as the last copper developer standing following M&A transactions. Barrick Gold acquired Equinox Minerals for C$7.3 billion in 2011 at a 30% premium, Oz Minerals was acquired by BHP for US$6.4 billion in March and Newcrest is being taken over by Newmont.

“We are the largest resource on the ASX in copper outside of BHP, and now we are the largest project in the entire market for Australia by producer, developer or explorer class that is holding a project capable of 100,000tpa of copper production. We find ourselves in the very weird situation that one of the world’s leading venture capital markets for mining does not have a mid-tier copper space and Hot Chili being the only player in that space,” said Easterday.

Easterday is keen to emulate the success of some of those takeovers. With a market capitalisation of about US$130 million, he sees the development of Costa Fuego as the path the company needs to tread to derisk the project and potentially elicit a bid fully.

“From here to a financing decision in 2026 and potential production, to be one of the first of the 100,000 tonners to come to market this decade is not a long period of time to wait after building this company for 15 years. There is tremendous upside if by the end of the decade copper is around $8/lb, and that’s a pretty exciting equation on our share price,” said Easterday.

A US$15 million investment from Osisko Gold Royalties in early July appears to have added more than funding to the company, as its share price increased more than 50% to about C$1.30.

“The Osisko transaction has allowed us to put the asset value to work rather than the market capitalisation of Hot Chili. The addition of NPV (net present value) we add with these funds is extraordinary. It leverages the value equation but removes any overhang of a fundraising anytime in the future.”

“The significant endorsement from Osisko, one of the leading North American streaming-royalty groups, has an amplification effect, particularly following our dual listing into the North American market through the TSXV and the OTCQX,” said Easterday.

Rename rejected

The North American listings saw the company work on a rebrand and a new name, Costa Copper, but while the new brand image is being used, the name change was rejected at the company’s May shareholder meeting.

“We were getting negative feedback on the name, and we thought that was something the shareholders should vote on. I didn’t have an opinion either way as I believe that a company makes the name; the name doesn’t make the company,” said Easterday.

The Mining Journal | Paul Harris | 23 January 2023

The drive north along Ruta 5 from La Serena towards Vallenar is to drive through more than a century of mining history. From the silver mines of the 1800s, to the iron ore mines of the late twentieth century, and the almost continual small-scale production of high-grade copper oxide. The four-lane highway passes through a wide valley with desert scrub and cacti, in parts reminiscent of Nevada or Arizona in the US, particularly with the cobalt blue sky and beating sun.

The drive passes a wind farm funded by Barrick Gold and various solar generation facilities but tucked away to the east of the Coastal Range and the Pacific Ocean, it also runs along part of the 2,000km-long north-south Atacama Fault in central Chile, which hosts iron, copper-iron and copper-gold deposits including IOCG, porphyry and vein deposits.

It also holds promise for Chile’s future copper developments, such as with companies like Hot Chili and Tribeca Resources, and further north, Capstone Copper’s Santo Domingo project, looking at bringing forward affordable projects which benefit from the rich regional infrastructure endowment, which includes access, high-tension power lines, local mining culture and port facilities. This should be music to the ears of mining investors who are still beating the capital discipline drum and nervous about development cost blowouts, which has made the greenlighting of new mine developments noticeable by their absence despite the copper price being notionally above the US$4 per pound incentive price. No wonder diversified miner Glencore and royalty company Osisko Royalties are interested.

Within this context, the long-overlooked coastal range in Chile is drawing increasing attention from copper explorers and developers who believe viable and economic deposits can be found, which, while smaller than the mega porphyries in the high cordillera which have powered the country’s copper production, can potentially be brought to market with less permitting, development and financing risk.

Costa Fuego

Hot Chili and its Costa Fuego project is growing into a strong development candidate south of Vallenar, with exploration bringing the project ever closer to the magical threshold of 1 billion tonnes of resources. While its Productora deposit has been around for a number of years, the more recent definition and integration of the Cortadera deposit 14km away into Costa Fuego via a 2022 resource update has increased the scale and attractiveness of the project. The continual fall in the average production grade in Chile adds shine to the project, which with each passing year, sees it get closer to and equalling production grade.

Diversified miner Glencore certainly sees the possibilities, having invested in the company and provided an offtake agreement in 2022. Glencore invested as Hot Chili debuted on the TSXV in 2022, participating in the C$30 million capital raise to take a 9.99% stake. “The Glencore investment gives us a solid endorsement and provides a good rubber stamp on what we’re doing and the asset we have,” Hot Chili chief executive Christian Easterday told Mining Journal at the time.

Glencore’s influence can be seen in the current drill programme at the Las Cañas target (body #1, Cortadera), to rapidly add further tonnes to its overall resource, with a prefeasibility study postponed until this drilling and the next resource update has been completed.

The consolidated March 2022 Costa Fuego resource featured an indicated resource of 725Mt grading 0.47% copper equivalent for 2.8Mt of copper, 2.6Moz of gold, 10.5Moz of silver and 67,000t of molybdenum, and inferred resources of 202Mt grading 0.36% copper equivalent. It also featured a high-grade indicated component of 156Mt grading 0.79% copper equivalent for 1Mt of copper, 850,000oz of gold, 2.9Moz of silver and 24,000 of molybdenum.

Hot Chili and Productora were widely dismissed by the market as being too small and too low-grade. That is no longer the case with the company looking at 100,000tpa of copper production for 20 years, and possibly more, although the market view perhaps still languishes in its past perception judging by the slow uptick of its share price. However, Costa Fuego is rapidly taking its position on the relatively short list of development stage projects that can be developed.

While Hot Chili’s star is starting to rise, the years spent in the investor doldrums saw the company use the time to advance low-cost but equally important work to derisk the project and make it a more robust and viable development proposition. “During the downturn in the market, we held onto Productora but stopped drilling and instead focused on the infrastructure we would need, such as obtaining the surface rights and easements we will need for access, power, a water pipeline and the maritime concession,” country manager Jose Ignacio Silver told Mining Journal during a site visit.

Cortadera has been a game-changer for the company, bringing high-grade outcropping material into the picture and almost quadrupling the resource base. The area has seen small-scale mining from local miners targeting high-grade copper oxide exposures on the mountain tops, with material containing 3% copper or more sent to the processing plants of state mineral company Enami. Their workings with the outcropping bluish-green chrysocolla mineral provide an obvious visual clue for explorers like Hot Chili to start their exploration efforts.

At Cortadera, which the company obtained in 2019, it has defined three ore bodies and an indicated resource of 471Mt grading 0.46% copper equivalent and an inferred resource of 108Mt grading 0.36% CuEq. The mineralisation outcrops at body #1, with mineralisation getting deeper and larger volumes moving to the southeast for body #2 and then again for body #3. Body #3 is the biggest and deepest, and where the company completed an 1185m hole which showed high-grade at depth in hole 13D (750m grading 0.6% Cu and 0.2g/t Au from 204m depth down-hole, including 188m grading 0.9% copper and 0.4g/t gold).

The area has been picked over by larger companies in the past, but seemingly in a half-hearted manner and never consolidated, perhaps using exploration results as a reason to move on rather than as a reason to stay and grow a resource. “Explorers didn’t want the Coastal Range as they were looking for the mega porphyries in the high Andes. There was also the issue of consolidating the concessions and the surface rights, which not everyone wants to take on,” geology manager Andrea Aravena told Mining Journal.

Piecing the project together is a task that the relatively young and ambitious Hot Chili team relished, particularly Silva, a lawyer who studied international trade law in the UK and spent some time working with the UK Serious Fraud Squad. There is a palpable enthusiasm for the exploration opportunities this now provides, with various new drill targets being worked up and permitted around both deposits. Silva has a similar enthusiasm for obtaining the infrastructure easements and entering the permitting process in the future. “I love this because we are building a long-term company and something that will have real value,” he said.

The next piece of the puzzle, and the one which may push the company over the 1Bt of resources threshold (already 927Mt), is an earn-in agreement with Antofagasta Minerals (AMSA) on the ground between Productora and Cortadera called Las Cañas for $1.5 million and 6,000m of drilling in two phases. The first phase is underway and will see 3,000m drilled as part of Hot Chili’s 10,000m initial exploration drill plan for 2023. Following a joint review of the results with AMSA, the second 3,000m will be drilled. AMSA previously drilled five holes at Las Cañas, and so the first Hot Chili holes are twinning some of those holes seeking to confirm the high-grade results previously obtained.

The evolution of Productora and Cortadera into Costa Fuego, with a central processing plant planned to be located at Productora, has energised the exploration team to find more ore bodies nearby in the Huasco Valley which could potentially feed into this. This is a task helped by growing confidence in the geological model they have developed and refined. Zones carrying mineralisation are characterized by the presence of tightly packed parallel quartz veinlets, which carry the copper sulphide mineral chalcopyrite, gold, silver and molybdenum credits.

Consulting geologist Dr Steve Garwin, a key member of the SolGold team which discovered the Alpala deposit in Ecuador, is also the lead technical advisor to Hot Chili and has trained the exploration team on the key things to record in core logging, such as the alteration, the number of veinlets and the presence of a molybdenum halo. With accurate core logging of crucial importance, one or both of the principal project geologists Miguel Tapia and Cristian Vasquez, are always on-site to ensure this is done correctly and consistently. “What we see at the #1 ore body at Cortadera we see at Las Cañas, which means we can advance quicker because we have a good idea of what is happening,” Tapia told Mining Journal.

“We always start by looking at the regional context as we think about the potential of having a cluster of deposits. Most deposits are structurally controlled by the north-south Atacama Fault structure and NW trending faults. The intersection of these can be zones of interest,” said Aravena.

Productora is a different beast as it is a structurally-controlled tourmaline breccia hosted in volcanic rocks, although exploration has also been guided by where small miners previously worked.

While undertaking a PFS on Costa Fuego has been postponed pending the Las Cañas drilling, the company has a general idea of how it wants to develop the project, having previously completed a PFS on Productora, as well as the majority of a PFS for the combined project. Mining would start with open pits at Productora and high-grade material from body #1 at Cortadera, with the company targeting a multi-decade project to produce approximately 100,000tpa of copper and up to 70,000ozpa of gold.

Material from Cortadera is planned to be transported to Productora via a rope conveyor, one of three key elements to reduce the environmental footprint and lower operating costs for future operation. The tailings storage facility has been relocated down the valley to a site that will have greater storage capacity and be cheaper to build and operate. “This is not upstream of any river, so there should be no opposition from the Huasco Valley Agricultural Association. The rope conveyor towers have minimal surface disturbance, and the Project is being designed with all stakeholders in mind,” said Silva.

The company reported a key development in December about the award of a maritime concession from the government where it will build its seawater capture infrastructure, the culmination of eight years of work. Processing will use seawater, and not needing to build a desalination plant will save considerable capital and operating cost. “It also improves the copper recovery,” said Silva. Marimaca Copper, which is advancing its Marimaca project in the coastal range near Antofagasta, is also looking to use seawater for processing and also says this will improve recoveries.

With the wind in its sails, the coming milestones for Hot Chili are to complete a preliminary economic assessment during the first semester, a resource upgrade in the second semester, and then the PFS in the first half of 2024.

“Growth from the drill bit is very much Hot Chili’s focus in 2023, with the company confident of continued resource growth. This is underpinning the company and our shareholder Glencore’s view that Costa Fuego and our regional consolidation may support a long-life mine producing 150,000tpa of copper. This would put Costa Fuego toward the top-end of scale for new copper developments being advanced in the world,” said Easterday.

Silva also noticed a clear change in the government’s attitude towards mining following the rejection of a new draft constitution on September 4 last year. While the country will continue creating a new constitution, it will likely be a less radical and more centrist document than the rejected draft.

“After 4 September, everything felt more stable in Chile. The rejection of the new draft constitution was a defeat for the extreme Left and moved politics in Chile back into the centre. The new constitution will have limits as there are 12 basic aspects of the political structure which have been agreed upon and will not be changed,” said Silva. These include that Chile is one united nation with a separation of powers and the existence of an independent Central Bank, as well as an independent Prosecutor and Electoral Office.

Hot Chili is not alone in this new development thrust. Some 500km north near Antofagasta, Marrimaca Copper plans a feasibility study this year for its Marimaca coastal range deposit for a 50,000-60,000tpa operation from a measured and indicated resource of 140Mt grading 0.48% copper for 665,500t of contained copper. Capstone Copper’s permitted and shovel-ready Santo Domingo copper-iron-gold project near regional mining hub Copiapo is due to see a feasibility study update later this year, which will include additional processing circuits for cobalt and iron ore, and may see a lower capex than the $1.5 billion in the current feasibility through integration with its nearby Manto Verde mine.

Tribeca

Exploration spending in Chile has been increasing in recent years, amounting to US$713.2 million in 2022, according to state copper agency Cochilco, a 24.6% rebound from the low of $450 million in 2020, the lowest amount since before 2010. The majority of spending at $345 million is by miners around their mines, with large mining companies spending most on exploration at 74.6% of the total. Early-stage exploration accounted for $197.3 million in 2022, with the amount spent by junior explorers almost doubling from 2021 to 2022, increasing its share from 9% to 18%. Copper is the most sought mineral, accounting for 74% of spend, followed by gold at 21%.

A new crop of junior copper explorers in Chile includes Culpeo Minerals, Torq Resources, Atacama Copper, Pampa Metals, ATEX Resources, Solis Minerals, Rugby Resources, Alto Verde Copper, Great Southern Copper and Nobel Resources. The newest of all is Tribeca Resources, one of a new generation of copper exploration juniors in Chile’s IOCG belt whose La Higuera project, some 100km south of Costa Fuego echoes many of the attractions Hot Chili sees in the region.

Tribeca is also drawn by the fact the coastal region has been overlooked and under-appreciated in the past, even though it is possible to find a sizeable deposit. Lundin Mining’s Candelaria near Copiapo is the exemplar in this context. With infrastructure development being a key factor in development time and cost blowouts, the coastal zone and its proximity to existing infrastructure are very attractive.

I drove to the site, a few hundred metres off the Pan-American highway, with chief executive Paul Gow in a VW Gol. Having a four-wheel drive truck was unnecessary, which also attests to Gow’s frugal and parsimonious financial management, a habit carried over from when he and partner Thomas Schmidt funded the early days of the company from their own pockets. Both Gow and Schmidt worked for Xstrata Copper in their previous lives. The company doesn’t have a corporate office and has a monthly burn rate of just $40,000, excluding drilling, while its drilling costs are just $130/m before assays and geological team.

Tribeca was also attracted by the presence of high-grade small-scale operations in the district and is leveraging the experience of Gow exploring for IOCG deposits around the Olympic Dam mine in Australia. Olympic Dam has several hundred metres of barren sedimentary cover above its mineralisation. “We are looking for a sulphide copper-gold system containing hundreds of millions of tonnes of resources. We see opportunity under the gravel cover in areas where there have been high-grade oxides exploited from the mountain tops. Copper is present in outcrops, and we follow them under the gravel,” Gow told Mining Journal during the visit.

Like Hot Chili, the Atacama Fault is the main regional controlling structure, and the northwest cross faulting is also relevant. With up to 60m of gravel cover, soil geochemistry is not such a useful exploration tool, but the presence of magnetite and hematite in IOCG deposits means geophysical methods like magnetics and gravity are.

Gow says good targets are near high magnetic anomalies, although the highest copper grade is not necessarily where the highest magnetic anomaly is. “My experience in the Olympic Dam province, particularly with the Prominent Hill discovery by Minotaur Resources, is that the mineralisation is related to hematite and is commonly offset from the magnetic anomaly. The magnetic anomaly tells you there is a hydrothermal system present, but then you have to identify where the mineralisation is located within that system.”

The company is also picking up where a previous explorer called Peregrine Metals left off. Peregrine drilled some 4000m in 12 holes at Gaby, which is Tribeca’s main target and where drilling began in November 2022. “We are drilling step-out holes to the north of the Peregrine drilling and have drilled up to 600m to the north,” Gow said.

Tribeca expects to release its first drill results in the coming weeks and show whether or not it has been successful in its initial aim of expanding the mineralisation footprint. “What got me into exploration was the excitement of waiting by the fax machine for the drilling results to come in,” said Gow. With the company’s concessions extending for another kilometre to the north, there is potential to continue expanding the footprint further.

For its first programme, Tribeca uses reverse circulation drilling to pre-collar the holes and penetrate the gravels and weathered zone before switching to diamond drilling for the tail to a total depth of about 400m. It plans some 2200m at Gaby and will then look to drill 600m at its Chirsposo target, 3km to the south.

Luck plays a role in exploration, and Tribeca appears to have had some already. It is perhaps the youngest copper explorer in Chile, having completed a reverse takeover transaction in October 2022 to list on the Toronto Stock Exchange Junior board when at least two other Chile copper exploration hopefuls delayed their listing efforts. “We raised US$2.1 million in January 2022 from mainly experienced mining people, so we didn’t look to raise any money when we listed, so we didn’t encounter any adverse market reaction,” said Gow.

Shares in Hot Chili are trading at C95c, valuing the company at C$114 million.

Shares in Tribeca Resources are trading at C36c, valuing the company at C$19 million.

The West Australian | Matt Birney | 13 Jan 2022

Drilling at the Cortadera copper-gold discovery in Chile. Credit: File

ASX-listed Hot Chili has launched a 10,000m probe of a recently secured land package which straddles the western extension of its massive 417 million tonne indicated Cortadera copper-gold discovery in Chile, South America. The company plans to evaluate four porphyry targets in the drill campaign and has unleashed both a diamond and RC rig to complete its two-pronged plan of attack.

Both drill rigs are currently plugging away at Cortadera’s fourth porphyry target known as “Cuerpo 4” where earlier programs struck a host of shallow copper-gold porphyry mineralisation. The best of the previously scored strikes was a 128m intercept at 0.5 per cent copper equivalent from 28m downhole. The 128m hit was comprised of 0.4 per cent copper and 0.1 gram per tonne gold and also included a 16m parcel at 1.3 per cent copper equivalent.

Hot Chili has flagged Cortadera as the jewel in the crown of its low-altitude, Costa Fuego copper development and has cited the asset’s bumper indicated resource of 471Mt grading 0.46 per cent copper equivalent for 1.7Mt of copper and 1.8 million ounces of gold as key merits in its designation. Notably, Cortadera also hosts a 108Mt inferred resource base at 0.35per cent copper equivalent for an additional 0.3Mt of copper and 0.3Moz gold.

The inventory is hosted in three porphyry centres coined Cuerpo 1, Cuerpo 2 and Cuerpo 3 which sit within a 2.3km strike length of the company’s Cortadera trend. Importantly, Hot Chili’s recent land grab which extended the western tenements of Cortadera also more than doubled the prospective strike length of the discovery from 2.3km to 5.2km and swelled the site’s near-term hopes for potential resource growth

According to the company, it is well placed to bankroll a suite of drilling this year and has a number of milestones in its crosshairs including a preliminary economic assessment and a resource upgrade.

Management states the play could permit an upgrade to its future annual metal production rates and an extension to its current mine life. If all goes to plan, Hot Chili envisions an extra production output of 100,000 tonnes of copper and 70,000 ounces of gold each year along with 20 years of additional mine life.

The company also plans to deliver a pre-feasibility study associated to Costa Fuego next year and says the project is amongst only a handful of near-term production projects in the world able to deliver more than 100,000 tonnes of copper in the next five years.

Copper is tipped to play an integral role in the world’s low-carbon future and is employed across a host of clean energy applications including wind turbines, solar panels, electric vehicle or “EV” batteries and wide-scale energy storage facilities. In addition, copper is prevalent in the construction of EVs with about 38kg of the material finding its way into hybrid and roughly 60kg going into every plug-in hybrid.

A recent study by the International Copper Association predicts by 2027 demand for EVs will rise by 900 per cent, a tantalising proposition for companies with massive copper plays such as Hot Chili.

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.

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