Hot Chili (ASX:HCH) - 2Blbs of Copper is Achievable & Attractive

Feb 10, 2025

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Interview with Christian Easterday, Managing Director & CEO of Hot Chili Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/hot-chili-asxhch-advancing-low-cost-large-scale-copper-gold-project-in-chile-6048

Recording date: 10th February, 2025

Hot Chili Limited (ASX:HCH) is an emerging copper-gold developer that has consolidated a major land position along the Chilean coastal range. After years of diligent exploration and strategic acquisitions, the company is on the cusp of a transformational re-rating as it rapidly advances its Costa Fuego project towards development.

At the heart of the Hot Chili story is Costa Fuego - a cluster of large-scale copper-gold deposits that the company has systematically pieced together over the last decade. Costa Fuego already boasts a resource base of 724Mt grading 0.48% CuEq for 2.9Mt Cu, 2.7Moz Au, 9.9Moz Ag and 64kt Mo, putting it among the largest copper development projects globally. But recent exploration success suggests this is just the beginning.

The game-changer is the new La Verde discovery, situated just 30km from Costa Fuego's planned processing hub. Wide drill intersections like 320m @ 0.3% Cu, 0.1g/t Au and 202m @ 0.6% Cu, 0.3g/t Au confirm La Verde as a large-scale, bulk tonnage porphyry system in its own right. Importantly, mineralization begins from surface, making it ideal for open pit extraction. Eight of the first twelve holes drilled ended in mineralization, hinting at the depth potential yet to be unlocked.

La Verde looks to be a carbon copy of the company's Cortadera discovery, a neighboring porphyry that extends beyond 1.2km vertical depth. Cortadera underpins 70% of Costa Fuego's current resource base, so it's no wonder that the market is sitting up and taking notice of La Verde's early drill results. Hot Chili has already expanded the La Verde footprint to 550m by 400m and is now stepping-out to test a potentially much larger porphyry system masked by shallow gravel cover.

Aside from outstanding growth potential, Costa Fuego boasts many of the key attributes majors look for in a copper development project: scale, grade, by-product credits, access to infrastructure and a Tier-1 jurisdiction. The company is on-track to complete Pre-Feasibility Studies on both the copper-gold project and a related water asset this year, paving the way for an accelerated path to production.

One factor that sets Hot Chili apart is its partnership with Glencore. The commodities giant owns a 7.8% stake in Hot Chili and has offtake rights to 60% of Costa Fuego's first eight years of production. This is a strong endorsement of the project's technical and economic merits. As the La Verde discovery firms up, expect to see heightened M&A interest from other big names in the copper space.

With the copper market facing a multi-million tonne supply deficit by the end of the decade, Costa Fuego's importance as a strategic asset is only set to increase. Hot Chili offers a unique combination of near-term development potential, long-term resource upside and experienced management - all the ingredients to become a key supplier into a structurally tight copper market. If the drills continue to deliver, this is a story that could heat up very quickly.

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Learn more: https://cruxinvestor.com/companies/hot-chili-limited