PERTH,
Australia, Aug. 3, 2023 /CNW/ - Hot Chili Limited
(ASX: HCH) (TSXV: HCH) (OTCQX: HHLKF) ("Hot Chili" or the
"Company") is pleased to announce that drilling has re-commenced
across the western extension of the Cortadera porphyry resource,
part of the Company's Costa Fuego Copper-Gold Project ("Costa
Fuego" or "the Project") located 600 km north of Santiago, at low elevation (<1,000 m) in the coastal range of the Atacama
Region, Chile.
Drilling operations have been underway for five
days with one reverse circulation rig in operation and further
diamond drill rigs to be added as the Company ramps up its
fully-funded 30,000m expansion
drilling programme across Costa Fuego.
Initial drill testing is focussed on satisfying
the Company's remaining 3,000m drill
commitment with Antofagasta Minerals (see announcement dated
28th November 2022) to acquire key
leases lying along the western extension of Cortadera.
Drilling is also planned to test several porphyry
targets at Cortadera and within the Company's consolidated
landholdings, in addition to remaining required development study
drilling.
Given the Company's significant advance on its
Pre-Feasibility Study for Costa Fuego (over 80% complete) and high
Indicated categorisation of the current Mineral Resource (82%
Indicated), the majority of planned drilling is being directed
toward exploration and mineral resource growth.
Cortadera is the centre-piece of Costa Fuego,
with the Indicated Mineral Resource for Costa Fuego currently
standing at 725 Mt grading 0.47%
CuEq1 for 2.8 Mt copper (Cu) and 2.6 Moz gold (Au) and
the Inferred Mineral Resources comprising 202 Mt grading 0.36% CuEq1 for 0.6 Mt
Cu and 0.4 Moz Au (see page 9 for
complete mineral resource disclosure, including breakdown by
metal).
Costa Fuego is one of the world's lowest capital
intensity major copper developments (see announcement dated
28th June 2023, entitled
"Hot Chili Announces
PEA2 for Costa Fuego"),
and is one of only a handful of projects
outside of the control of major miners that is capable of
delivering meaningful new copper supply this decade.
The Company's recently announced Preliminary
Economic Assessment ("PEA")2 establishes Costa Fuego as
a low-risk, long life copper project benefiting from a low start-up
capital and a high annual copper equivalent metal production
profile of over 100 kt for a 16-year mine life, including 95
kt Cu and 49 koz Au during primary
production (first 14 years) at C1 Cash Cost3 of
US$1.33/lb (estimated net of
by-product credits).
Hot Chili is focussed on up-scaling Costa Fuego's
resource base and potential study scale towards a 150,000 tpa
copper production profile ahead of the delivery of the Costa Fuego
Pre-Feasibility Study ("PFS"), expected in H2 2024.
A mineral resource update for Costa Fuego is
planned to be completed in H2 2023 and will include drilling from
the current 30,000m programme as well
as significant drilling undertaken across Costa Fuego since the
beginning of 2022.
The Company is well funded with approximately
A$26 million in treasury following
closing of its recent investment agreement with Osisko Gold
Royalties for US$15 million (as
announced 26th July
2023).
A PEA technical report
prepared in accordance with NI 43-101
(as defined below)
will be filed on SEDAR+ by 11th
August 2023.
The Company looks forward to providing further
updates on results from drilling activities and ongoing development
study workstreams.
This announcement is
authorised by the Board of Directors
for release to ASX and TSXV.
Hot Chili's
Managing Director and Chief Executive Officer Mr Christian
Easterday is responsible for this announcement and has
provided sign-off for release to the ASX and TSXV.
_______________________
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1 CuEq
considers assumed commodity prices and average metallurgical
recoveries from testwork. See page 9 for complete mineral
resource disclosure of Costa Fuego.
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2 The PEA is
preliminary in nature and includes 3% inferred mineral resources
that are considered too speculative geologically to have the
economic considerations applied to them that would enable them to
be categorized as mineral reserves, and there is no certainty
that the PEA will be realized. Mineral resources that are not
mineral reserves do not have demonstrated economic viability.
See Page 9 for additional cautionary language.
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3 See page 8 for full non-IFRS measures
discussion.
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For more information please contact:
Christian Easterday
Managing Director – Hot
Chili
|
Tel:
+61 8 9315 9009
Email:
admin@hotchili.net.au
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Penelope Beattie
Company Secretary – Hot
Chili
|
Tel:
+61 8 9315 9009
Email:
admin@hotchili.net.au
|
Harbor Access
Investor & Public
Relations (Canada)
|
Email:
Graham.Farrell@harbor-access.com
Email:
jonathan.paterson@harbor-access.com
|
or visit Hot Chili's website
at www.hotchili.net.au
_______________________________________
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1 Refer to announcement dated
28th August 2019 for further
information regarding Induced
Polarisation (IP/MT– MIMDAS) Survey.
|
* Resource
Copper Equivalent (CuEq) considers assumed commodity prices
and average metallurgical recoveries for the Mineral Resource
from testwork. See Page 9 for complete Mineral Resource
disclosure of Costa Fuego.
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Qualifying Statements
Technical Report
For readers to fully understand the information
in this news release, they should read the PEA technical report
prepared in accordance with National Instrument 43-101
– Standards of Disclosure for Mineral Projects ("NI
43-101") (expected to be available on www.sedarplus.ca or at
www.hotchili.net.au by August 11,
2023) in its entirety, including all qualifications,
assumptions, limitations and exclusions that relate to the
information set out in this news release that qualifies the
technical information contained in the PEA. The PEA is intended to
be read as a whole, and sections should not be read or relied upon
out of context. The technical information in this news release is
subject to the assumptions and qualifications contained in the
PEA.
Qualified Persons – NI 43-101
The PEA was compiled by Wood Australia Pty Ltd
with contributions from a team of independent Qualified Persons
within the meaning of NI 43 -101. The scientific and technical
information contained in this news release pertaining to Coast
Fuego has been reviewed and verified by the following independent
qualified persons within the meaning of NI 43-101:
- Ms Elizabeth Haren (MAUSIMM
(CP) & MAIG) of Haren Consulting – Mineral
Resource Estimate
- Mr Dean David (FAUSIMM
(CP)) of Wood Pty Ltd – Metallurgy
- Mr Piers Wendlandt (PE) of Wood Pty Ltd – Market Studies
and Contracts, Economic Analysis
-
Farzard Kossari (PE) of Wood Pty Ltd – Cost Estimation
- Mr Anton von Wielligh
(FAUSIMM) of ABGM Consulting Pty Ltd – Mine Planning
and Scheduling
The independent qualified persons have
verified the information disclosed herein, including the
sampling, preparation, security, and analytical procedures
underlying such information.
Disclosure regarding mine planning and
infrastructure has been reviewed and approved by Mr Grant King, FAUSIMM, Hot Chili's Chief
Operations Officer, and a Qualified Person within the meaning of NI
43-101.
The technical information in this new release has
been reviewed and approved by Mr
Christian Easterday, MAIG, Hot Chili's Managing
Director and Chief Executive Officer, and a Qualified Person within
the meaning of NI 43-101.
Competent Persons – JORC
The information in this news release that relates
to Mineral Resources for the Costa Fuego Project is based on
information compiled by:
- Ms Elizabeth Haren (MAUSIMM
(CP) & MAIG) of Haren Consulting – Mineral
Resource Estimate
- Mr Dean David (FAUSIMM (CP)) of
Wood Pty Ltd – Metallurgy
- Mr Piers Wendlandt (PE) of Wood
Pty Ltd – Market Studies and Contracts, and Economic Analysis
- Mr Farzard Kossari
(PE) of Wood Pty Ltd
– Cost Estimation
- Mr Anton von Wielligh (FAUSIMM) of ABGM
Consulting Pty Ltd – Mine Planning and Scheduling
Ms Haren, Mr David, Mr Wendlandt, Mr Kossari and
Mr von Wielligh have sufficient
experience, which is relevant to the
style of mineralisation and types of deposits under
consideration and to the activities undertaken, to qualify
as a Competent Person as defined in the 2012 Edition of
the 'Australasian Code of Reporting of Exploration Results, Mineral
Resources and Ore Reserves' and as Qualified Persons under
NI43-101.
Disclaimer
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release.
Cautionary Note for U.S. Investors
Concerning Mineral Resources
NI 43-101 is a rule of the Canadian Securities
Administrators which establishes standards for all public
disclosure an issuer makes of scientific and technical information
concerning mineral projects. Technical disclosure contained in this
news release has been prepared in accordance with NI 43-101 and the
Canadian Institute of Mining, Metallurgy and Petroleum
Classification System. These standards differ from the requirements
of the U.S. Securities and Exchange Commission ("SEC") and resource
information contained in this news release may not be comparable to
similar information disclosed by domestic United States companies subject to the SEC's
reporting and disclosure requirements.
All amounts
in this news release are in U.S. dollars unless
otherwise noted.
Non IFRS Financial Performance Measures
"Total Cash Cost", "All-in Sustaining Cost",
"All-in cost LOM", "C1", and "Free Cashflow" are not performance
measures reported in accordance with International Financial
Reporting Standards ("IFRS"). These performance measures are
included because these statistics are key performance measures that
management uses to monitor performance. Management uses these
statistics to assess how the Costa Fuego Project compares against
its peer projects and to assess the overall effectiveness and
efficiency of the contemplated mining operations. These performance
measures do not have a meaning within IFRS and, therefore, amounts
presented may not be comparable to similar data presented by other
mining companies. These performance measures should not be
considered in isolation as a substitute for measures of performance
in accordance with IFRS.
Forward Looking Statements
This news release contains certain statements
that are "forward-looking information" within the meaning of
Canadian securities legislation and Australian securities
legislation (each, a "forward-looking statement"). Forward-looking
statements reflect the Company's current expectations, forecasts,
and projections with respect to future events, many of which are
beyond the Company's control, and are based on certain assumptions.
No assurance can be given that these expectations, forecasts, or
projections will prove to be correct, and such forward-looking
statements included in this news release should not be unduly
relied upon. Forward-looking information is by its nature
prospective and requires the Company to make certain assumptions
and is subject to inherent risks and uncertainties. All statements
other than statements of historical fact are forward-looking
statements. The use of any of the words "believe", "could",
"estimate", "expect", "may", "plan", "potential", "project",
"should", 'toward", "up-scale", "will", "would" and similar
expressions are intended to identify forward-looking
statements.
The forward-looking statements within this news
release are based on information currently available and what
management believes are reasonable assumptions. Forward-looking
statements speak only as of the date of this news release. In
addition, this news release may contain forward-looking statements
attributed to third-party industry sources, the accuracy of which
has not been verified by the Company.
In this news release, forward-looking statements
relate, among other things, to: prospects, projections and success
of the Company and its projects; the ability of the Company to
expand mineral resources beyond current mineral resource estimates;
the results and impacts of current and planned drilling to convert
inferred mineral resources to indicated, to extend mineral
resources and to identify new deposits; the Company's ability to
convert mineral resources to mineral reserves; opportunities for
growth in mineral projects; the timing and outcomes of this current
and future planned economic studies; the Company's ability to
up-scale the project to 150,000 tpa of copper production; the
timing and outcomes of regulatory processes required to obtain
permits for the development and operation of the Costa Fuego
Project as contemplated in the PEA and/or future planned economic
studies; whether or not the Company will make a development
decision and the timing thereof; the ability of the Company to
consolidate additional landholdings around its project; estimates
of cost; the ability of the Company to complete the PFS on the
timeline indicated or at all; and estimates of planned
exploration.
Forward-looking statements involve known and
unknown risks, uncertainties, and other factors, which may cause
the actual results, performance, or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. A number of factors could cause actual results to
differ materially from a conclusion, forecast or projection
contained in the forward-looking statements in this news release,
including, but not limited to, the following material factors:
operational risks; risks related to the cost estimates of
exploration; sovereign risks associated with the Company's
operations in Chile; changes in
estimates of mineral resources of properties where the Company
holds interests; recruiting qualified personnel and retaining key
personnel; future financial needs and availability of adequate
financing; fluctuations in mineral prices; market volatility;
exchange rate fluctuations; ability to exploit successful
discoveries; the production at or performance of properties where
the Company holds interests; ability to retain title to mining
concessions; environmental risks; financial failure or default of
joint venture partners, contractors or service providers;
competition risks; economic and market conditions; and other risks
and uncertainties described elsewhere in this news release and
elsewhere in the Company's public disclosure record.
Although the forward-looking statements contained in this news
release are based upon assumptions which the Company believes to be
reasonable, the Company cannot assure investors that actual results
will be consistent with these forward-looking statements. With
respect to forward-looking statements contained in this news
release, the Company has made assumptions regarding: future
commodity prices and demand; availability of skilled labour; timing
and amount of capital expenditures; future currency exchange and
interest rates; the impact of increasing competition; general
conditions in economic and financial markets; availability of
drilling and related equipment; effects of regulation by
governmental agencies; future tax rates; future operating costs;
availability of future sources of funding; ability to obtain
financing; and assumptions underlying estimates related to adjusted
funds from operations. The Company has included the above summary
of assumptions and risks related to forward-looking information
provided in this news release to provide investors with a more
complete perspective on the Company's future operations, and such
information may not be appropriate for other purposes. The
Company's actual results, performance or achievement could differ
materially from those expressed in, or implied by, these
forward-looking statements and, accordingly, no assurance can be
given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what
benefits the Company will derive therefrom.
For additional information with respect to these
and other factors and assumptions underlying the forward-looking
statements made herein, please refer to the public disclosure
record of the Company, including the Company's most recent Annual
Report, which is available on SEDAR+ (www.sedarplus.ca) under the
Company's issuer profile. New factors emerge from time to time, and
it is not possible for management to predict all those factors or
to assess in advance the impact of each such factor on the
Company's business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking
statement.
The forward-looking statements contained in this
news release are expressly qualified by the foregoing cautionary
statements and are made as of the date of this news release. Except
as may be required by applicable securities laws, the Company does
not undertake any obligation to publicly update or revise any
forward-looking statement to reflect events or circumstances after
the date of this news release or to reflect the occurrence of
unanticipated events, whether as a result of new information,
future events or results, or otherwise. Investors should read this
entire news release and consult their own professional advisors to
ascertain and assess the income tax and legal risks and other
aspects of an investment in the Company.
Mineral Resource Statement
1 Mineral
Resources are reported on a 100% Basis - combining Mineral Resource
estimates for the Cortadera, Productora and San Antonio deposits.
All figures are rounded, reported to appropriate significant
figures, and reported in accordance with the Joint Ore Reserves
Committee Code (2012) and the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) Standards on Mineral Resources and
Reserves, Definitions and Guidelines prepared by the CIM Standing
Committee on Reserve Definition, as required by National Instrument
43-101.
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2 The
Productora deposit is 100% owned by Chilean incorporated company
Sociedad Minera El Aguila SpA (SMEA). SMEA is a joint venture (JV)
company – 80% owned by Sociedad Minera El Corazón Limitada (a 100%
subsidiary of Hot Chili Limited), and 20% owned by CMP Productora
(a 100% subsidiary of Compañía Minera del Pacífico S.A
(CMP)).
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3. The
Cortadera deposit is controlled by a Chilean incorporated company
Sociedad Minera La Frontera SpA (Frontera). Frontera is a
subsidiary company – 100% owned by Sociedad Minera El Corazón
Limitada, which is a 100% subsidiary of Hot Chili
Limited.
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4 The San
Antonio deposit is controlled through Frontera (100% owned by
Sociedad Minera El Corazón Limitada, which is a 100% subsidiary of
Hot Chili Limited) and has an Option Agreement with a private party
to earn a 90% interest.
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5 The
Mineral Resource estimates in the tables above form coherent bodies
of mineralisation that are considered amenable to a combination of
open pit and underground extraction methods based on the following
parameters: Base Case Metal Prices: Copper US$ 3.00/lb, Gold US$
1,700/oz, Molybdenum US$ 14/lb, and Silver US$20/oz.
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6
Metallurgical recovery averages for each deposit consider Indicated
+ Inferred material and are weighted to combine sulphide flotation
and oxide leaching performance. Process recoveries: Cortadera and
San Antonio – Weighted recoveries of 82% Cu, 55% Au, 82% Mo and 37%
Ag. CuEq(%) = Cu(%) + 0.56 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x
Ag(g/t). Productora – Weighted recoveries of 84% Cu, 47% Au, 47% Mo
and 0% Ag (not reported). CuEq(%) = Cu(%) + 0.46 x Au(g/t) +
0.00026 x Mo(ppm). Costa Fuego – Recoveries of 83% Cu, 53% Au, 69%
Mo and 23% Ag. CuEq(%) = Cu(%) + 0.52 x Au(g/t) + 0.00039 x Mo(ppm)
+ 0.0027 x Ag(g/t).
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7 Resource
Copper Equivalent (CuEq) grades are calculated based on the
formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo
ppm × Mo price per g/t × Mo_recovery)+(Au ppm × Au price per g/t ×
Au_recovery)+ (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu
price 1% per tonne × Cu recovery). The base case cut-off grade for
mineral resources considered amenable to open pit extraction
methods at the Cortadera, Productora and San Antonio deposits is
0.21% CuEq while the cut-off grade for mineral resources considered
amenable to underground extraction methods at the Cortadera deposit
is 0.3% CuEq.
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8 Mineral
resources are not mineral reserves and do not have demonstrated
economic viability. These Mineral Resource estimates include
Inferred Mineral Resources that are considered too speculative
geologically to have economic considerations applied to them that
would enable them to be categorised as Mineral Reserves. It is
reasonably expected that the majority of Inferred mineral resources
could be upgraded to Measured or Indicated Mineral Resources with
continued exploration.
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9 The
effective date of the estimate of Mineral Resources is March 31st,
2022. Refer to ASX Announcement "Hot Chili Delivers Next Level of
Growth" ("Resource Announcement") for JORC Code Table 1 information
related to the Costa Fuego Resource Estimate (MRE) by Competent
Person Elizabeth Haren, constituting the MREs of Cortadera,
Productora and San Antonio (which combine to form Costa Fuego). Hot
Chili confirms it is not aware of any new information or data that
materially affects the information included in the Resource
Announcement and all material assumptions and technical parameters
stated for the Mineral Resource Estimates in the Resource
Announcement continue to apply and have not materially
changed.
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10 Hot Chili
Limited is not aware of political, environmental or other risks
that could materially affect the potential development of the
Mineral Resources.
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SOURCE Hot Chili Limited