Hot Chili Locks up Preferred Port Access for Costa Fuego Copper Project

Highlights

• Hot Chili is proactively building key infrastructure advantages vs every other copper project in the region.
• Right of first refusal on use of the port and refund on feasability costs if port agreement does not go ahead. A win/win
• Contract covers at least 80% of production
• At first production, Hot Chili could have preferred port access and unique water rights that will cut more than $1 billion off operating costs at Costa Feugo.
• Developing one of the most cost efficient global copper projects not owned by a major miner.

Key Agreement Details

• Hot Chili has executed a Memorandum of understanding (MOU) with Puerto Las Losas SA (PLL) for the right to negotiate a binding Port Services Agreement for the Company’s nearby, Costa Fuego copper-gold project in Chile
• Hot Chili will fund 20% of an estimated two-year, US$4.6 million Feasibility Study for a bulk tonnage copper concentrate facility to be developed at Las Losas Port, 50km west of Costa Fuego
• In consultation with Hot Chili, PLL shall select and commission a top-tier independent engineering company to commence and undertake the port Feasibility Study
• Following completion of the port Feasibility Study, Hot Chili shall have a right of first refusal (ROFR) to ship copper concentrates through Puerto Las Losas facilities for three years, provided that a shipping solution is agreed at existing or potential infrastructure of PLL
• The Feasibility Study will include bulk loading alternatives for copper concentrates from existing facilities, potentially with or without modifying the existing infrastructure for the operating port

Hot Chili’s Managing Director and CEO Christian Easterday said the MOU with PLL is a significant step forward to securing one of Hot Chili’s last remaining potential infrastructure advantages for Costa Fuego port access.

Costa Fuego At Low Elevation and Only 50km From Port

The News

Hot Chili Limited (ASX: HCH) (TSXV: HCH) (OTCQX: HHLKF) (“Hot Chili” or the “Company”) is pleased to announce that the Company has entered into a MOU with Puerto Las Losas SA (“PLL”) to evaluate bulk tonnage loading alternatives for copper concentrates from the Company’s Costa Fuego Copper-Gold Project (“Costa Fuego” or “the Project”) in Chile.
Importantly, the MOU with PLL provides Hot Chili the right, for up to five years, to negotiate a binding Port Services Agreement for Costa Fuego.

The potential Port Service Agreement would include a “Take or Pay Volume” clause, based on at least 80% of Costa Fuego’s projected future annual concentrate production.

Under the terms of the agreement, Hot Chili and PLL will undertake a port Feasibility Study, which will be managed by PLL, and include Pre-Feasibility Engineering (FEL2), Feasibility Engineering (FEL3) and Environmental Studies.

Hot Chili will fund 20% of the port Feasibility Study, which is estimated to cost approximately US$4.6 million and take approximately two years to complete.

Upon completion of the port Feasibility Study, and provided that a shipping solution for loading copper concentrates is agreed at existing or potential infrastructure in PLL, Hot Chili will have a Right of First Refusal (the “ROFR”) to ship copper concentrates through PLL’s facilities in Huasco Bay for a three-year period.

PLL may terminate the ROFR by reimbursing Hot Chili’s port Feasibility Study costs.

The Company is well-funded and looks forward to providing further updates across its multiple activity streams.

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