Highlights
- 6% increase in copper-equivalent (CuEq) contained metal for the total Indicated Resource of the Costa Fuego Project.
- 9% increase in CuEq contained metal for the higher-grade component of the Indicated Resource¹-²
- Hot Chili will release a pre-feasability study in the second half of 2024, a key catalyst
Costa Feugo Resource Continues to Grow
- Total Mineral Resource¹-²
- Indicated -792 Mt grading 0.45% CuEq for 2.9 Mt Cu, 2.6 Moz Au, 12.9 Moz Ag & 68 kt Mo
- Inferred -203 Mt grading 0.31% CuEq for 0.5 Mt Cu, 0.4 Moz Au, 2.4 Moz Ag & 12 kt Mo
- High Grade Mineral Resource1,2 (Reported +0.6% CuEq)
- Indicated – 173 Mt grading 0.78% CuEq for 1.1 Mt Cu, 1.0 Moz Au, 4.3 Moz Ag & 25 kt Mo
- Inferred – 7 Mt grading 0.74% CuEq for 0.04 Mt Cu, 0.03 Moz Au, 0.1 Moz Ag & 1 kt Mo
- Over 85% of Costa Fuego’s Mineral Resource Estimate is now Classified as Indicated
- Strong platform to deliver a maiden Mineral Reserve for Costa Fuego Pre-feasibility study (PFS) expected to be completed in H2 2024
- Further updates expected (development, drilling, exploration, and commercial activities)
Hot Chili Limited (ASX: HCH) (TSXV: HCH) (OTCQB: HHLKF) announced another Resource increase for its Costa Fuego copper-gold project, located in the coastal range, 600 km north of Santiago, Chile.
Costa Fuego comprises the Cortadera, Productora (including Alice) and San Antonio deposits, all of which have updated Mineral Resource Estimates (“MRE” or “Resource”) and lie proximal to one another, at low altitude (800 m to 1,000 m), approximately 600 km north of Santiago (Figure 2).
The MRE update follows 24 months of material investment, totaling 24.5 km of drilling across Costa Fuego; a mix of development, metallurgical, geotechnical, resource expansion and exploration drilling, designed to progress the Costa Fuego project towards its Pre-feasibility Study (PFS) expected in H2 2024.
Figure 2. Location of the Costa Fuego Project Regionally in Relation to Key Infrastructure
At Cortadera, the Company completed 43 Reverse Circulation (RC) and Diamond Drillhole tails (DD) for 17,000 metres of additional exploration and Resource extension drilling at Cortadera, including six development drillholes. The Cortadera MRE (porphyry copper-gold deposit) has again delivered the majority of Resource growth for Costa Fuego. Cortadera is defined by over 108,000 metres of drilling and now contains an Indicated Resource of 531 Mt grading 0.44% CuEq (previously 471 Mt grading 0.46% CuEq) and an Inferred Resource of 149 Mt grading 0.29% CuEq (previously 108 Mt grading 0.35% CuEq); see Table 1 for
complete breakdown.
Cortadera’s Indicated Resource tonnage has grown by a further 13%, further supporting the Company’s June 2023 Preliminary Economic Assessment (PEA), which outlined Costa Fuego as having the potential to be one of the world’s lowest capital intensity major copper developments. The proportion of Indicated Resource now reported within the Open Pit Reasonable Prospect of Eventual Economic Extraction (RPEEE) constraints has also increased by 32%, with no change in the reported CuEq grade (0.44%). The higher-grade +0.6% CuEq Indicated material has also increased by 14%, at an average grade of 0.76% CuEq. This material sits largely within the Open Pit RPEEE constraints, with the balance of the Resource within the underground RPEEE constraints.
The Productora MRE (breccia hosted copper-gold deposit) has been re-estimated following an additional 16 RC and DD exploration drillholes for 5,000 metres (including four metallurgical drillholes), a large pulp resampling campaign for silver and soluble copper assays, and a new approach to estimating the oxide and transition weathering domains. The MRE was reported using RPEEE constraints, similar to those used at
Cortadera. Immaterial positive changes were reported for the Productora Indicated MRE copper and gold contained metal, as well as an additional 2.8 Moz of silver metal at 0.35 g/t, which has now been incorporated into the CuEq contained metal, in line with the approach at Cortadera.
The porphyry deposit Alice (previously included in Productora MRE reporting) has also been re-estimated. The previous historical MRE was completed in 2015 and has now been brought into line with the approach taken at Cortadera, which comprises a similar style of mineralization. An additional nine drillholes for 2,600 metres, including one DD metallurgical drillhole (800 m), completed in 2017 and 2022, respectively, were also included. These changes did not result in a material change to the overall MRE tonnage or grade, but improved confidence in the local variability of the estimation, which has been reflected in the updated Resource Classifications.
A San Antonio MRE update included an additional 16 drillholes (2,500 metres), including three DD metallurgical drillholes, designed to upgrade the Inferred Resource to Indicated Classification. Additional mapping and sampling were also completed to validate the higher-grade copper mineralization exposed at surface. This additional information resulted in 3 Mt grading 0.71% CuEq being converted to Indicated Classification, from the previously Inferred 4 Mt grading 1.15% CuEq.
The Company is encouraged by the further conversion of Inferred material to Indicated Classification, now standing at 85% of the total CuEq contained metal, following focused development drilling (metallurgical and geotechnical) designed to support a Pre-Feasibility Study (PFS) and targeted exploration and Resource extension drill programs. The expansion of Costa Fuego Indicated Resources, without material impact to reported metal grades, increases confidence in the reliability of the MRE and its ability to inform the
Company’s planned PFS.
Table 1. Costa Fuego Copper-Gold Project Mineral Resource Estimate, February 26th, 2024
1 Mineral Resources are reported on a 100% Basis – combining Mineral Resource estimates for the Cortadera, Productora, Alice 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 NI 43-101. Mineral Resource estimation practices are in accordance with CIM Estimation of Mineral Resource and Mineral Reserve Best Practice Guidelines (November 29, 2019) and CIM Environmental, Social and Governance Guidelines for Mineral Resources and Mineral Reserve Estimation (September 8, 2023) and reported in accordance CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014) that are incorporated by reference into NI 43-101.
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 Compañía Minera del Pacífico S.A (CMP).
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.
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 Frontera has an Option Agreement to earn a 100% interest.
5 The Mineral Resource Estimates in the tables above form coherent bodies of mineralization that are considered amenable to a combination of open pit and under ground extractionmethods 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.
6 All Mineral Resource Estimates were assessed for Reasonable Prospects of Eventual Economic Extraction (RPEEE) using both Open Pit and Block Cave Extraction mining methods at Cortadera and Open Pit mining methods at Productora, Alice and San Antonio.
7Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. Process recoveries:
Cortadera – Weighted recoveries of 82% Cu, 55% Au, 81% Mo and 36% Ag. CuEq(%) = Cu(%) + 0.55 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t) San Antonio – Weighted recoveries of 85% Cu, 66% Au, 80% Mo and 63% Ag. CuEq(%) = Cu(%) + 0.64 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0072 x Ag(g/t)
Alice – Weighted recoveries of 81% Cu, 47% Au, 52% Mo and 37% Ag. CuEq(%) = Cu(%) + 0.48 x Au(g/t) + 0.00030 x Mo(ppm) + 0.0044 x Ag(g/t)
Productora – Weighted recoveries of 84% Cu, 47% Au, 48% Mo and 18% Ag. CuEq(%) = Cu(%) + 0.46 x Au(g/t) + 0.00026 x Mo(ppm) + 0.0021 x Ag(g/t)
Costa Fuego – Recoveries of 83% Cu, 53% Au, 71% Mo and 26% Ag. CuEq(%) = Cu(%) + 0.53 x Au(g/t) + 0.00040 x Mo(ppm) + 0.0030 x Ag(g/t) 8 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, Alice and San Antonio deposits is 0.20% CuEq, while the cut-off grade for Mineral Resources considered amenable to underground extraction methods at the Cortadera deposit is 0.27% CuEq.
9 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 categorized 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. 10 The effective date of the estimate of Mineral Resources is February 26th, 2024. Refer to JORC Code Table 1 information in this announcement related to the Costa Fuego Mineral Resource Estimate (MRE) by Competent Person Elizabeth Haren, who is also a qualified person (within the meaning of NI 43-101), constituting the MREs of Cortadera, Productora, Alice 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.
11 Hot Chili Limited is not aware of political, environmental or other risks that could materially affect the potential development of the Mineral Resources.
Cut Off Grade and Reporting Copper Price Analysis
Following release of the Company’s PEA in June 2023, a review of MRE appropriate CuEq Cut-off Grades (COG) was completed, with revisions to long-term consensus copper price assumptions and breakeven grade assessments considered.
The long-term consensus copper price assumption changed from US$ 3.30/lb Cu in 2022, to US$ 3.85/lb Cu in 2024. The change in copper price, in combination with the latest costs, as informed by the Company’s PEA in June 2023, has reduced the breakeven grade for Costa Fuego.
The revised COGs reflect these changes in assumptions and have been set appropriately higher than the calculated breakeven grade.
These key assumptions in relation to COG’s are summarized in Table 2.
Table 2. Summary of Cut-Off Grades and Copper Price changes
*Refer to Table 1in Appendix for CuEq calculations
Cortadera Mineral Resource Increase
The Cortadera MRE increase follows an additional 17,000 m of DD and RC drilling since the March 2022 Mineral Resource Estimate. Samples used during the MRE update were obtained using both RC and DD and were analyzed using Inductively Coupled Plasma (ICP) techniques to quantify 33 elements along with fire-assay techniques to quantify gold. The update resulted in a 7% increase in total Indicated Resource tonnage at the same cut-off grade, for approximately 88 kt of additional CuEq contained metal.
Cortadera has maintained a proportion of 84% Indicated CuEq contained metal during this MRE update, with the spacing and location of drilling at Cortadera ranging from 80 m to 300 m. The selected drill spacing and orientation over the Resource area ensures that drilling is optimized where possible to intersect perpendicular to mineralization.
The additional drilling enabled improved delineation of low-grade copper across Cortadera, but particularly at Cuerpo 3 where the porphyry mineralization halo extends the furthest (Figure 2), following analysis during the Preliminary Economic Assessment (PEA). The economics of the low-grade sulphide leach presented in the PEA indicated processing material down to grades of 0.15% Cu at Costa Fuego would be profitable.
Drilling below Cuerpo 1 resulted in additional Resource material at depth, included largely within the underground RPEEE. Continuity of grade and geology is controlled by the emplacement of mineralized porphyry intrusions into shallow dipping host stratigraphy. While these porphyry intrusions have a reasonably consistent pipe-like geometry, grade distribution also extends into the host stratigraphy.
Mineralization models have been generated using over 109,000 m of drilling and continued increase in knowledge of the geological controls on mineralization. Each metal has been independently optimized following the completion of extensional drilling, resulting in improved continuity of copper, gold, silver, and molybdenum within each of Cortadera’s three porphyry bodies (Cuerpos). These models correlate well with higher A + B porphyry vein percentages and other key porphyry mineralization metrics.
Review of the late-stage dyke model was also completed following infill drilling of six diamond development drillholes, which resulted in additional narrow dykes being added to the geology model, particularly beneath the dyke-eye at Cuerpo 3. This improved geology model reduced dilution of the estimated porphyry mineralization and contributed to a 14% increase in Indicated CuEq contained metal above 0.6% CuEq.
Extensive test work was completed to determine an optimal estimation approach and ensure the model was representative of the underlying porphyry mineralisation controls. The updated Cortadera MRE continues to utilise a probabilistic estimation approach (Categorical Indicator Kriging or CIK) within each mineralisation domain. This approach enabled the spatial and chronological aspects of the multiple phases of
mineralization to be better represented.
Table 3, Figure 3, and Figure 4 below outline the upgraded Cortadera MRE. Table 3. Cortadera Deposit Mineral Resource Estimate, February 2
Table 3. Cortadera Deposit Mineral Resource Estimate, February 26th, 2024
1 Mineral Resources are reported on a 100% Basis. All figures are rounded, reported to appropriate significant figures and reported in accordance with the Joint Ore Reserves
Committee Code (2012) and NI 43-101. Mineral resource estimation practices are in accordance with CIM Estimation of Mineral Resource and Mineral Reserve Best Practice
Guidelines (November 29, 2019) and CIM Environmental, Social and Governance Guidelines for Mineral Resources and Mineral Reserve Estimation (September 8, 2023) and reported
in accordance CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014) that are incorporated by reference into NI 43-101.
2 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.
3 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. 3 All Mineral Resource Estimates were assessed for Reasonable Prospects of Eventual Economic Extraction (RPEEE) using both Open Pit and Block Cave Extraction mining methods
at Cortadera.
5 Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. Process
recoveries: Cortadera – Weighted recoveries of 82% Cu, 55% Au, 81% Mo and 36% Ag. CuEq(%) = Cu(%) + 0.55 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t). 6 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, Alice and San Antonio deposits is 0.20% CuEq while the cut-off grade for Mineral Resources considered amenable to underground extraction methods at the Cortadera deposit is 0.27% CuEq. 7 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 categorized 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. 8 The effective date of the estimate of Mineral Resources is February 26th, 2024. Refer to JORC Code Table 1 information in this announcement related to the Costa Fuego Mineral Resource Estimate (MRE) by Competent Person Elizabeth Haren, who is also a qualified person (within the meaning of NI 43-101), constituting the MREs of Cortadera, Productora, Alice 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.
9 Hot Chili Limited is not aware of political, environmental or other risks that could materially affect the potential development of the Mineral Resources.
Figure 3. Oblique Long Section of the Cortadera MRE displaying CuEq grade distribution in relation to drilling coverage and PEA pit shell
*Refer to Table 3 for CuEq calculation
Figure 4. Plan view at 470 mRL displaying the change in distribution of CuEq grade at Cuerpo 3, Cortadera, between March 2022 and February 2024 MREs. Resource blocks and Classification boundaries are shown at the RL intersection, while drillholes are displayed within +/-100 m of the RL.
*Refer to Table 3 for CuEq calculation
Productora Mineral Resource Update
The Productora MRE has been updated following an additional 16 RC and DD exploration drillholes (~5,000 metres), including four metallurgical drillholes. The drilling increased confidence in the previously developed probabilistic CIK technique used for estimation, with the model able to predict high- and low-grade zones within the structurally complex, breccia-hosted Productora mineralization. This increase in confidence
allowed for the lateral expansion of classification boundaries, converting material from Inferred to Indicated, before subsequent application RPEEE Open Pit constraint. These changes resulted in a minimal increase (2%) in Indicated CuEq contained metal above 0.20% CuEq.
Drillhole spacing at Productora varies from 40 m x 40 m to 160 m x 160 m and has provided a high level of support for the geological, mineralization and resource estimation models, with both Indicated and Inferred Resource Classification at Productora. Samples used during the MRE update were obtained using both RC and DD and were analyzed using ICP for 33-elements and fire-assay for gold.
A large pulp resampling campaign for silver, comprising approximately 3,000 samples, culminated in a maiden Indicated Resource of 2.8 Moz of silver at Productora. A smaller pulp resampling campaign (approximately 900 samples) was completed for soluble copper, which was also been included in the updated Productora MRE to allow for modelling of metallurgical recovery in the Company’s planned PFS later this year.
An updated approach to the modelling of weathering surfaces was also developed, utilizing a combination of quantitative (i.e. ratio of soluble copper to total copper) and qualitative (i.e. proximity to structures and logged regolith) data to model the oxide, transitional, and fresh weathering zones. This technique accounts for the impact of structural complexity on weathering at Productora and allows for the more accurate application of metal recoveries for calculation of CuEq%.
Table 4 and Figures 5 and 6 below show the upgraded Productora MRE.
Table 4. Productora Deposit Mineral Resource Estimate, February 26th, 2024
1 Mineral Resources are reported on a 100% Basis. All figures are rounded, reported to appropriate significant figures and reported in accordance with the Joint Ore Reserves Committee Code (2012) and NI 43-101. Mineral resource estimation practices are in accordance with CIM Estimation of Mineral Resource and Mineral Reserve Best Practice Guidelines (November 29, 2019) and CIM Environmental, Social and Governance Guidelines for Mineral Resources and Mineral Reserve Estimation (September 8, 2023) and reported in accordance CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014) that are incorporated by reference into NI 43-101.
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 Compañía Minera del Pacífico S.A (CMP).
3 The Mineral Resource Estimates in the tables above form coherent bodies of mineralization 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.
4 All Mineral Resource Estimates were assessed for Reasonable Prospects of Eventual Economic Extraction (RPEEE) using both Open Pit and Block Cave Extraction mining methods at Cortadera and Open Pit mining methods at Productora, Alice and San Antonio.
5 Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. Process
recoveries:
Productora – Weighted recoveries of 84% Cu, 47% Au, 48% Mo and 18% Ag. CuEq(%) = Cu(%) + 0.46 x Au(g/t) + 0.00026 x Mo(ppm) + 0.0021 x Ag(g/t).
6 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, Alice and San Antonio deposits is 0.20% CuEq while the cut-off grade for Mineral Resources considered amenable to underground extraction methods at the Cortadera deposit is 0.27% CuEq.
7 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 categorized 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.
8 The effective date of the estimate of Mineral Resources is February 26th, 2024. Refer to JORC Code Table 1 information in this announcement related to the Costa Fuego Mineral Resource Estimate (MRE) by Competent Person Elizabeth Haren, who is also a qualified person (within the meaning of NI 43-101) constituting the MREs of Cortadera, Productora,Alice 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.
9 Hot Chili Limited is not aware of political, environmental or other risks that could materially affect the potential development of the Mineral Resources.
Figure 5. Long Section of the Productora MRE displaying CuEq grade distribution in relation to drilling coverage and PEA pit shell shape, +/- 100 m clipping.
*Refer to Table 4 for CuEq calculation
Figure 6. Productora MRE Cross Sections of Habanero and CCHEN displaying CuEq grade distribution in relation to drilling coverage, PEA pit shell shape and Indicated and Inferred Classification boundaries, +/- 100 m clipping.
*Refer to Table 4 for CuEq calculation
Alice Mineral Resource Update
The Alice MRE has been updated following the addition of nine drillholes for 2,600 metres, including one DD metallurgical drillhole (800 m). Alice was previously reported as part of the Productora MRE due to its proximity (less than 300 metres). Drillhole spacing at Alice is on a nominal 80 m x 40 m spacing. This drillhole spacing has provided a high level of support for domaining of mineralization. Geological and grade continuity is sufficient for Mineral Resource estimation, with both Indicated and Inferred Resources being classified at Alice. Samples used during the MRE update were obtained using both RC and DD and were
analyzed using ICP (33 element) and fire-assay for gold.
Alice is an outcropping copper-mineralized porphyry, with minor gold and molybdenum. Significant work has been completed since the maiden MRE in 2015, including surface mapping for mineralization and structures, and relogging of RC chips and DD core. This culminated in the construction of an updated litho-structural model at Alice, which then informed the mineralized envelopes. Many of the lessons from Cortadera were able to be applied to Alice due to the similarities in deposit style.
While the estimation updates did not result in a material change to the Alice MRE tonnes and grade, they did improve confidence in the local variability of the estimation, which has been reflected in the Resource Classification. Open-pit RPEEE constraints have been applied for Resource reporting at Alice.
Table 5 and Figure 7 below show the upgraded Alice MRE.
Table 5. Alice Deposit Mineral Resource Estimate, February 26th, 2024
1 Mineral Resources are reported on a 100% Basis. All figures are rounded, reported to appropriate significant figures and reported in accordance with the Joint Ore Reserves Committee Code (2012) and NI 43-101. Mineral resource estimation practices are in accordance with CIM Estimation of Mineral Resource and Mineral Reserve Best Practice Guidelines (November 29, 2019) and CIM Environmental, Social and Governance Guidelines for Mineral Resources and Mineral Reserve Estimation (September 8, 2023) and reported in accordance CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014) that are incorporated by reference into NI 43-101.
2 The Productora deposit (including Alice) 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 Compañía Minera del Pacífico S.A (CMP).
3 The Mineral Resource Estimates in the tables above form coherent bodies of mineralization 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. 4 All Mineral Resource Estimates were assessed for Reasonable Prospects of Eventual Economic Extraction (RPEEE) using both Open Pit and Block Cave Extraction mining methods at Cortadera and Open Pit mining methods at Productora, Alice and San Antonio.
5 Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. Process
recoveries:
Alice – Weighted recoveries of 81% Cu, 47% Au, 52% Mo and 37% Ag. CuEq(%) = Cu(%) + 0.48 x Au(g/t) + 0.00030 x Mo(ppm) + 0.0044 x Ag(g/t). 6 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, Alice and San Antonio deposits is 0.20% CuEq while the cut-off grade for Mineral Resources considered amenable to underground extraction methods at the Cortadera deposit is 0.27% CuEq. 7 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 categorized 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. 8 The effective date of the estimate of Mineral Resources is February 26th, 2024. Refer to JORC Code Table 1 information in this announcement related to the Costa Fuego Resource Estimate (MRE) by Competent Person Elizabeth Haren, who Is also a qualified person (within the meaning of NI 43-101) constituting the MREs of Cortadera, Productora, Alice 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.
9 Hot Chili Limited is not aware of political, environmental or other risks that could materially affect the potential development of the Mineral Resources
Figure 7. Cross-section of Alice and Productora MREs displaying CuEq grade distribution in relation to drilling coverage, PEA pit shell shapes and Indicated and Inferred Classification boundaries. Drillholes are shown within a window of +/- 100 m of the cross-section plane.
*Refer to Table 4 and 5 for CuEq calculation
San Antonio Mineral Resource Update
The San Antonio MRE has also been updated with an additional 16 drillholes completed (2,500 metres), including four metallurgical drillholes. The aim of the drilling was to define along-strike and down-dip extents of the mineralization and aid conversion of the maiden MRE from Inferred to Indicated Classification.
Drillhole spacing at San Antonio is on a nominal 40 m spacing along strike and between 40-80 m spacing up/down dip of the mineralized diorite unit. Historic drilling includes underground channel and sludge drilling, providing high-density drill spacing down to 20 m in some areas. Drill spacing has the highest density around the old underground workings. Samples used during the MRE update were obtained using both RC and DD and were analyzed using ICP (33 element) and fire-assay for gold.
The San Antonio deposit is characterized by narrow mineralization along an NNE-SSW trending shear through the host rocks, which are a shallowly west-dipping sedimentary and volcanic sequence. An updated litho-structural model was informed by surface mapping (campaigns completed in 2018 and 2022), underground mapping (2018 and 2019), drillhole logging and assay data (2018 and 2022), and an RC chip relogging campaign (2022).
The reporting of an Indicated Resource at San Antonio is a significant outcome, primarily driven by infill drilling completed since the previous MRE and detailed surface mapping work culminating in a high confidence interpretation of the mineralization. Existing underground workings at San Antonio also assisted
in validating mineralization interpretations.
The San Antonio Indicated Resource totals 3 Mt grading 0.71% CuEq and the Inferred Resource totals 2 Mt grading 0.41% CuEq. The previous 2022 MRE for San Antonio was an Inferred 4 Mt grading 1.15% CuEq.
Table 6 and Figure 8 below outline the updated San Antonio MRE.
1 Mineral Resources are reported on a 100% Basis. All figures are rounded, reported to appropriate significant figures and reported in accordance with the Joint Ore Reserves Committee Code (2012) and NI 43-101. Mineral resource estimation practices are in accordance with CIM Estimation of Mineral Resource and Mineral Reserve Best Practice
Guidelines (November 29, 2019) and CIM Environmental, Social and Governance Guidelines for Mineral Resources and Mineral Reserve Estimation (September 8, 2023) and reported in accordance CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014) that are incorporated by reference into NI 43-101. 2 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 Frontera has an Option Agreement to earn a 100% interest. 3 The Mineral Resource Estimates in the tables above form coherent bodies of mineralization 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. 4 All Mineral Resource Estimates were assessed for Reasonable Prospects of Eventual Economic Extraction (RPEEE) using both Open Pit and Block Cave Extraction mining methods at Cortadera and Open Pit mining methods at Productora, Alice and San Antonio.
5 Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. Process
recoveries: San Antonio – Weighted recoveries of 85% Cu, 66% Au, 80% Mo and 63% Ag. CuEq(%) = Cu(%) + 0.64 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0072 x Ag(g/t). 6 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, Alice and San Antonio deposits is 0.20% CuEq while the cut-off grade for Mineral Resources considered amenable to underground extraction methods at the Cortadera deposit is 0.27% CuEq. 7 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 categorized 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. 8 The effective date of the estimate of Mineral Resources is February 26th, 2024. Refer to JORC Code Table 1 information in this announcement related to the Costa Fuego Resource
Estimate (MRE) by Competent Person Elizabeth Haren, who is also a qualified person (within the meaning of NI 43-101) constituting the MREs of Cortadera, Productora, Alice 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.
9 Hot Chili Limited is not aware of political, environmental or other risks that could materially affect the potential development of the Mineral Resources
Figure 8. Long section looking west of San Antonio MRE displaying CuEq grade distribution in relation to drilling coverage, +/- 100 m clipping.
*Refer to Table 6 for CuEq calculation
1 Reported on a 100% Basis – combining Mineral Resource estimates for the Cortadera, Productora, Alice and San Antonio deposits comprising the Costa Fuego project. Figures are rounded to nearest thousand, or if less, to the nearest hundred. Reported to appropriate significant figures and in accordance with the Joint Ore Reserves Committee Code (2012) and National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Mineral resource estimation
practices are in accordance with CIM Estimation of Mineral Resource and Mineral Reserve Best Practice Guidelines (November 29, 2019) and CIM Environmental, Social and Governance Guidelines for Mineral Resources and Mineral Reserve Estimation (September 8, 2023) and reported in accordance CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014) that are incorporated by reference into NI 43-101.Total Resource reported at +0.20% CuEq for open pit and +0.27% CuEq for underground.
2 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 Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. For Cortadera (Inferred + Indicated) the average Metallurgical Recoveries are Cu=82%, Au=55%, Mo=81%, and
Ag=36%. For San Antonio (Indicated + Inferred) the average Metallurgical Recoveries are 85% Cu, 66% Au, 80% Mo and 63% Ag. For Alice (Indicated + Inferred) the average Metallurgical Recoveries are 81% Cu, 47% Au, 52% Mo and 37% Ag. For Productora (Inferred + Indicated), the average Metallurgical Recoveries are Cu=84%, Au=47%, Mo=48% and Ag=18%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries are Cu=83%, Au=53%, Mo=71% and Ag=26%.
3 See announcement dated 6th September 2011 “First Resource at Productora” for details on historical MRE reporting.
4 See announcement dated 12th October 2020 “Costa Fuego Becomes a Leading Global Copper Project” for details on MRE reporting.
5 See announcement dated 31st March 2022 “Hot Chili Delivers Next Level of Growth” for details on MRE reporting
