Name of the Project
Costa Fuego copper project.

Location
Coastal range of the Atacama region, Chile.

Project Owner/s
Costa Fuego comprises the Productora, Cortadera and San Antonio mineral resources, situated within a 10 km radius.

The Productora deposit is 100%-owned by Chilean incorporated company Sociedad Minera El Aguila SpA (SMEA). SMEA is a joint venture company, 80%-owned by Sociedad Minera El Corazón Limitada (a 100% subsidiary of Hot Chili) and 20% owned by CMP Productora (a 100% subsidiary of Compañía Minera del Pacífico).

The Cortadera deposit is controlled by Chilean incorporated company Sociedad Minera La Frontera SpA (Frontera) – a subsidiary company 100% owned by Sociedad Minera El Corazón Limitada, which, in turn, is a 100% subsidiary of Hot Chili.

The San Antonio deposit is controlled by Frontera and has an option agreement with a private party to earn a 90% interest.

Project Description
The results of the preliminary economic assessment (PEA) outline a low-risk, long-life copper project benefiting from low startup capital and a high copper-equivalent metal production profile of more than 112 000 t/y over a 16-year mine life, including 95 000 t copper and 49 000 oz gold during primary production (first 14 years).

The PEA proposes a combined openpit truck-and-shovel operation and an underground block cave using centralised processing for a conventional large-scale copper mine producing concentrate and copper cathode.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
In the base case ($3.85/lb), the project has a pretax net present value, at an 8% discount rate, of $1.54-billion and an internal rate of return of 24%, with a payback from first production of 3.5 years.

Capital Expenditure
$1.05-billion.

Planned Start/End Date
Not stated.

Latest Developments
Hot Chili announced a A$40-million capital raising through a private placement to institutional, professional and other sophisticated investors on February 2.

The placement will issue up to 24.27-million new shares at A$1.65 each, representing a 15% discount to the company’s last closing price and a 13.6% discount to the five-day volume-weighted average price prior to the trading halt on February 2.

The raising will occur under Hot Chili’s existing ASX placement capacity and is expected to settle on February 12, subject to approvals.

The capital raising is aimed at supporting several growth initiatives at Hot Chili’s flagship Costa Fuego copper/gold project, including the accelerated development of the La Verde discovery, for which the company intends to establish a maiden mineral resource.

Proceeds will also fund the definition of a high-grade starter pit at Costa Fuego, progress the feasibility study, complete the environmental-impact assessment and support development of the Huasco water project.

The funds will also be used for ongoing exploration, strategic funding initiatives and general working capital.

Key Contracts, Suppliers and Consultants
Wood Australia (PEA).

Contact Details for Project Information
Hot Chilli, tel +61 8 9315 9009 or email admin@hotchili.net.au.