Hot Chili to Create New Water Company, Submits Multi-User Maritime Application

Hot Chili Limited (ASX: HCH) (TSXV: HCH) (OTCQX: HHLKF) has submitted a second maritime concession application to support a potential multi-user, water network for the Huasco valley area of the Southern Atacama region of Chile.

Importantly, Hot Chili’s second maritime concession application also includes brine discharge for potential seawater desalination operations on the Huasco coastline so that both raw seawater and desalinated water could be provided by a potential water network.

In addition, the Company is also preparing to transfer its water assets (maritime concession, costal land accesses and water pipeline easements etc) into a new stand-alone water company controlled by Hot Chili.

These next steps follow positive initial engagement with several potential desalinated water customers in the Huasco valley area as well as several suitable water infrastructure partners. The Company is pleased to be positioning its water assets to potentially generate significant value for Hot Chili’s shareholders.

Hot Chili is the only Company in the region holding a current granted maritime water concession for extraction, a current maritime application for extraction and desalinated discharge, and most necessary permits to provide critical desalinated water supply to the Huasco valley, following over a decade of permitting advance for the Company’s coastal range, Costa Fuego copper-gold project.

While Costa Fuego’s mine development plan considers the use of raw seawater for future processing, the Company’s recently announced Water Supply Concept Study (see announcement dated 26th February 2024) confirmed the potential to also develop a large, multi-user, desalinated water supply business in the Huasco valley area.

A Water Supply Business Case Study is underway, and the Company has been engaging with potential water customers, potential infrastructure partners and Chilean government regulators since announcement of the outcomes of the Water Supply Concept Study.

The second maritime concession application is a key next step to developing a potential desalinated water business to supply community, agricultural and new mining demand of up to 3,700 litres per second (l/s) over the long-term in the Huasco Valley.

Leveraging Hot Chili’s water assets to enable the development of multiple, nearby, large-scale mining projects, comes at a time where Chile’s government is actively encouraging investment in multi-user desalination water networks in the Atacama.

Water scarcity is THE critical issue for new mine developments in the Atacama on both the Chilean and Argentinean side of the Andes. Hot Chili is the only Company holding most of the necessary permits required to provide desalinated water to the Huasco valley – a prolific region for potential new global copper supply needed to support global electrification and decarbonation. Securing these assets has involved over a decade of commitment. Socially and environmentally, multiclient and multipurpose water infrastructure is the new reality. José Ignacio Silva, Executive Vice President, Hot Chili Ltd.

Figure 1: Location of conceptual water network and significant mines

The Company looks forward to providing further updates on its Costa Fuego copper-gold project and its Water Business Case Study for the Huasco valley of Chile.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Duane Hope is a Partner at Capital 10X, he brings over 15 years of communications and research experience to the firm. His research and writing have appeared in publications for North American, European and Asian audiences.

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