PERTH, Australia,
Aug. 28,
2023 /CNW/ - 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 binding letter of
intent ("LOI") with Bastion Minerals Limited (ASX: BMO)
("Bastion") for the grant to Hot Chili of an option to acquire 100%
of Bastion's Cometa Project in Chile ("Cometa"),
located near Hot Chili's Costa
Fuego Copper-Gold Project ("Costa Fuego" or "the Project") in
the coastal range of the Atacama Region, Chile.
Cometa consists of exploration and mining concessions covering
approximately 56km2 in area located
approximately 15km southeast of Costa Fuego's
planned operating centre
(refer accompanying Figure 1) and contiguous with Hot
Chili's landholdings in the region.
The option
is another step in Hot Chili's consolidation strategy for the Costa Fuego copper project.
The Company's recently published Preliminary Economic Assessment
entitled Costa Fuego Copper Project – NI 43-101 Technical Report
Preliminary Economic Assessment with an effective date of
June 28, 2023 (the
"PEA")1 establishes Costa Fuego as a low-risk, long life copper project benefiting from a low
start-up capital and a high annual copper
equivalent2 metal production profile of over
100 kt for a 16-year mine life, including 95 kt copper
and 49 koz gold during primary production (first 14 years) at C1
Cash Cost3 of US$1.33/lb (estimated net of by-product
credits).
Hot Chili is focussed on up-scaling Costa Fuego's resource base
and potential study scale towards a 150,000 tpa copper production
profile ahead of the delivery of the Costa Fuego Pre-Feasibility
Study ("PFS"), expected in H2 2024. Cometa provides
additional optionality for the discovery of further mineral
deposits in the Costa Fuego Project area with the potential to
provide supplemental feed and/or a longer mine life to the project
laid out in the PEA.
The material
terms of the LOI are as follows:
- Exclusivity period of 60 days for Hot Chili to conduct due
diligence and for Hot Chili's subsidiary Sociedad Minera La
Frontera SpA ("Frontera") to enter into a definitive option
agreement with Bastion's subsidiary SCM Cornet Constelación, the
holder of a 100% interest in the concessions
comprising Cometa,
for the grant to Frontera of an option to
acquire a 100% interest in the Cometa concessions ("Option").
- Non-refundable cash payment of US$100,000 to Bastion upon grant of the
Option.
- Non-refundable cash payment of US$200,000 within 12 months from the grant of the
Option to keep the Option in good standing.
- Option may be exercised within 30 months of the date of
grant.
- If the Option is exercised, the consideration payable to
Bastion to purchase the Cometa concessions is:
-
- US$2,400,000 if the Option is
exercised by Hot Chili within 18 months from the date of grant of
the Option; or
- US$3,000,000 if the Option is
exercised by Hot Chili within 30 months from the date of grant of
the Option.
- Hot Chili may elect to satisfy the purchase consideration in
cash (100%), or in cash (50%) and ordinary shares of Hot Chili
(50%) issued at a price per share equal to the 15-day VWAP at
the date of exercise
of the Option, subject to applicable regulatory approvals, including the approval of
the TSX Venture Exchange ("TSXV").
The Company will provide
further updates on the grant and any exercise of the Option
in due course.
_______________
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1 The PEA is
preliminary in nature and includes 3% inferred mineral resources
that are considered too speculative geologically to have the
economic considerations applied to them that would enable them to
be categorized as mineral reserves, and there is no certainty that
the PEA will be realized. Mineral resources that are not mineral
reserves do not have demonstrated economic viability. See Page 6
for additional cautionary language.
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2 CuEq
considers assumed commodity prices and average metallurgical
recoveries from testwork. See page 9 for complete mineral resource
disclosure of Costa Fuego.
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3 See page 7
for full non-IFRS measures discussion.
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Cortadera Expansion
Drilling Update
Drilling operations at Cortadera
continue, with nine
Reverse Circulation ("RC") drillholes completed so far
for 2,010m.
Four of these drillholes have been completed across the western
extension of the Cortadera porphyry
resource, including one pre-collar in preparation for a deep diamond hole beneath Cuerpo
4. Following the drilling of RC pre-collars at Cortadera,
the RC drill rig will begin a hydrogeological program at Cortadera
commencing in mid-September.
One diamond drill rig is planned to commence double shift
drilling in September. Preparations are underway to bring a second
diamond drill rig online as the Company ramps up for its extensive
30,000m expansion drilling campaign
across multiple exploration targets.
This announcement is authorised by the Board of Directors
for release to ASX and TSXV.
Hot Chili's
Managing Director and Chief Executive
Officer Mr Christian Easterday is responsible
for this announcement and has provided sign-off for release to the
ASX and TSXV.
For more information please contact:
Christian Easterday
Managing Director – Hot
Chili
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Tel: +61 8
9315 9009
Email:
admin@hotchili.net.au
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Penelope Beattie
Company Secretary – Hot
Chili
|
Tel: +61 8
9315 9009
Email:
admin@hotchili.net.au
|
Harbor Access
Investor & Public
Relations (Canada)
|
Email:
graham.farrell@harbor-access.com
Email:
jonathan.paterson@harbor-access.com
|
or visit Hot Chili's
website at www.hotchili.net.au
Figure 1. Location of the Cometa
Project in relation to Costa Fuego
Figure 2. Location of Recently Completed
RC Drillholes across
Cortadera Porphyry Expansion Targets
Qualifying Statements
Technical Report
Certain scientific, technical and economic
information contained in this news
release is derived from the PEA.
For readers to fully understand such information, they should
read the PEA technical report prepared in accordance with National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects ("NI 43-101") (available on www.sedarplus.ca or at
www.hotchili.net.au) in its entirety, including all qualifications,
assumptions, limitations and exclusions that relate to the
information set out in this news release. The PEA is intended
to be read as a whole, and sections should not be read or relied
upon out of context. The technical information in this news release
is subject to the assumptions and qualifications contained in the
PEA.
Qualified Persons – NI 43-101
The PEA was compiled by Wood Australia
Pty Ltd with contributions from a team of
independent qualified persons (within the meaning
of NI 43-101).
The scientific, technical and economic
information contained in this news release
pertaining to Coast Fuego is based
on the PEA, which was prepared by the following independent qualified persons
(within the meaning of NI 43-101):
- Ms Elizabeth Haren
(MAUSIMM (CP) & MAIG) of Haren Consulting – Mineral Resource
Estimate
- Mr Dean David
(FAUSIMM (CP))
of Wood Pty Ltd – Metallurgy
- Mr
Piers Wendlandt (PE) of Wood Pty Ltd – Market
Studies and Contracts, Economic Analysis
- Mr Jeffrey Steven (PE) of Wood
Pty Ltd – Capital and Operating Costs
- Mr Anton von Wielligh (FAUSIMM)
of ABGM Consulting Pty Ltd
– Mine Planning and Scheduling
- Mr Edmundo Laporte
(PE) of GAC – Environmental Studies, Permitting and Social or Community Impact
- Mr Dave Morgan (PE) of
Knight Piésold – Project
Infrastructure (TSF)
The independent qualified persons have verified the information
disclosed in the PEA, including the sampling, preparation,
security, and analytical procedures underlying such
information.
Disclosure regarding mine planning and infrastructure has been
reviewed and approved by Mr Grant
King, FAUSIMM, Hot Chili's Chief Operations Officer, and a
qualified person within the meaning of NI 43-101.
The scientific and technical information in this new release,
other than such information derived from the PEA, has been reviewed
and approved by Mr Christian
Easterday, MAIG, Hot Chili's Managing Director and Chief
Executive Officer, and a qualified person within the meaning of NI
43-101.
Competent Persons – JORC
The information in this news release that relates to Mineral
Resources for the Costa Fuego Project is based on information
compiled by:
- Ms
Elizabeth Haren (MAUSIMM (CP) & MAIG) of Haren Consulting
– Mineral Resource Estimate
- Mr Dean David
(FAUSIMM (CP))
of Wood Pty Ltd – Metallurgy
- Mr
Piers Wendlandt (PE) of Wood Pty Ltd – Market
Studies and Contracts, and Economic Analysis
- Mr Jeffrey Steven (PE) of Wood
Pty Ltd – Capital and Operating Costs
- Mr
Anton von Wielligh (FAUSIMM) of ABGM Consulting Pty Ltd – Mine Planning
and Scheduling
- Mr Edmundo Laporte
(PE) of GAC – Environmental Studies, Permitting and Social or Community Impact
- Mr Dave Morgan (PE) of
Knight Piésold – Project
Infrastructure (TSF)
Ms Haren, Mr David, Mr Wendlandt, Mr Kossari and Mr von Wielligh have sufficient experience, which
is relevant to the style of mineralisation and types of
deposits under consideration and to the activities undertaken, to
qualify as a Competent Person as defined in the 2012 Edition of the
'Australasian Code of Reporting of Exploration Results, Mineral
Resources and Ore Reserves' and as Qualified Persons under
NI43-101.
Disclaimer
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
Cautionary Note for U.S. Investors Concerning Mineral Resources
NI 43-101 is a rule of the Canadian Securities Administrators
which establishes standards for all public disclosure an issuer
makes of scientific and technical information concerning mineral
projects. Technical disclosure contained in this news release has
been prepared in accordance with NI 43-101 and the Canadian
Institute of Mining, Metallurgy and Petroleum Classification
System. These standards differ from the requirements of the U.S.
Securities and Exchange Commission ("SEC") and resource information
contained in this news release may not be comparable to similar
information disclosed by domestic United
States companies subject to the SEC's reporting and
disclosure requirements.
All amounts
in this news release are in U.S. dollars unless otherwise noted.
Non IFRS Financial
Performance Measures
"Total Cash Cost", "All-in Sustaining Cost", "All-in cost LOM",
"C1", and "Free Cashflow" are not performance measures reported in
accordance with International Financial Reporting Standards
("IFRS"). These performance measures are included because these
statistics are key performance measures that management uses to
monitor performance. Management uses these statistics to assess how
the Costa Fuego Project compares against its peer projects and to
assess the overall effectiveness and efficiency of the contemplated
mining operations. These performance measures do not have a meaning
within IFRS and, therefore, amounts presented may not be comparable
to similar data presented by other mining companies. These
performance measures should not be considered in isolation as a
substitute for measures of performance in accordance with IFRS.
Forward Looking Statements
This news release contains certain statements that are
"forward-looking information" within the meaning of Canadian
securities legislation and Australian securities legislation (each,
a "forward-looking statement"). Forward-looking statements reflect
the Company's current expectations, forecasts, and projections with
respect to future events, many of which are beyond the Company's
control, and are based on certain assumptions. No assurance can be
given that these expectations, forecasts, or projections will prove
to be correct, and such forward-looking statements included in this
news release should not be unduly relied upon. Forward-looking
information is by its nature prospective and requires the Company
to make certain assumptions and is subject to inherent risks and
uncertainties. All statements other than statements of historical
fact are forward-looking statements. The use of any of the words
"believe", "could", "estimate", "expect", "may", "plan",
"potential", "project", "should", 'toward", "up-scale", "will",
"would" and similar expressions are intended to identify forward-
looking statements.
The forward-looking statements within this news release are
based on information currently available and what management
believes are reasonable assumptions. Forward-looking statements
speak only as of the date of this news release. In addition, this
news release may contain forward-looking statements attributed to
third-party industry sources, the accuracy of which has not been
verified by the Company.
In this news release, forward-looking statements relate, among
other things, to: the Company's timing and ability to enter into a
definitive agreement with respect to the Option; the completion of
the conditions to exercise the Option; receipt of all regulatory
approvals in respect of the Option, including the approval of the
TSXV; prospects, projections and success of the Company and its
projects; the ability of the Company to expand mineral resources
beyond current mineral resource estimates; the results and impacts
of current and planned drilling to convert inferred mineral
resources to indicated, to extend mineral resources and to identify
new deposits; the Company's ability to convert mineral resources to
mineral reserves; opportunities for growth in mineral projects; the
timing and outcomes of this current and future planned economic
studies; the Company's ability to up-scale the Project to 150,000
tpa of copper production; the timing and outcomes of regulatory
processes required to obtain permits for the development and
operation of the Costa Fuego Project as contemplated in the PEA
and/or future planned economic studies; whether or not the Company
will make a development decision and the timing thereof; the
ability of the Company to consolidate additional landholdings
around its Project; estimates of cost; the ability of the Company
to complete the PFS on the timeline indicated or at all; and
estimates of planned exploration, including the hydrogeological
program at Cortadera and the Company's planned 30,000m expansion drilling campaign across
multiple exploration targets.
Forward-looking statements involve known and unknown risks,
uncertainties, and other factors, which may cause the actual
results, performance, or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. A number of factors could cause actual results to
differ materially from a conclusion, forecast or projection
contained in the forward-looking statements in this news release,
including, but not limited to, the following material factors: the
ability of the Company to complete the conditions to exercise the
Option; obtaining all regulatory approvals for the completion of
the Option; operational risks; risks related to the cost estimates
of exploration; sovereign risks associated with the Company's
operations in Chile; changes in
estimates of mineral resources of properties where the Company
holds interests; recruiting qualified personnel and retaining key
personnel; future financial needs and availability of adequate
financing; fluctuations in mineral prices; market volatility;
exchange rate fluctuations; ability to exploit successful
discoveries; the production at or performance of properties where
the Company holds interests; ability to retain title to mining
concessions; environmental risks; financial failure or default of
joint venture partners, contractors or service providers;
competition risks; economic and market conditions; and other risks
and uncertainties described elsewhere in this news release and
elsewhere in the Company's public disclosure record.
Although the forward-looking statements contained in this news
release are based upon assumptions which the Company believes to be
reasonable, the Company cannot assure investors that actual results
will be consistent with these forward-looking statements. With
respect to forward-looking statements contained in this news
release, the Company has made assumptions regarding: future
commodity prices and demand; availability of skilled labour; timing
and amount of capital expenditures; future currency exchange and
interest rates; the impact of increasing competition; general
conditions in economic and financial markets; availability of
drilling and related equipment; effects of regulation by
governmental agencies; future tax rates; future operating costs;
availability of future sources of funding; ability to obtain
financing; and assumptions underlying estimates related to adjusted
funds from operations. The Company has included the above summary
of assumptions and risks related to forward-looking information
provided in this news release to provide investors with a more
complete perspective on the Company's future operations, and such
information may not be appropriate for other purposes. The
Company's actual results, performance or achievement could differ
materially from those expressed in, or implied by, these
forward-looking statements and, accordingly, no assurance can be
given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what
benefits the Company will derive therefrom.
For additional information with respect to these and other
factors and assumptions underlying the forward-looking statements
made herein, please refer to the public disclosure record of the
Company, including the Company's most recent Annual Report, which
is available on SEDAR+ (www.sedarplus.ca) under the Company's
issuer profile. New factors emerge from time to time, and it is not
possible for management to predict all those factors or to assess
in advance the impact of each such factor on the Company's business
or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in
any forward-looking statement.
The forward-looking statements contained in this news release
are expressly qualified by the foregoing cautionary statements and
are made as of the date of this news release. Except as may be
required by applicable securities laws, the Company does not
undertake any obligation to publicly update or revise any
forward-looking statement to reflect events or circumstances after
the date of this news release or to reflect the occurrence of
unanticipated events, whether as a result of new information,
future events or results, or otherwise. Investors should read this
entire news release and consult their own professional advisors to
ascertain and assess the income tax and legal risks and other
aspects of an investment in the Company.
Mineral Resource Statement
Costa Fuego Combined Mineral
Resource (Effective Date 31st March 2022)
1 Mineral
Resources are reported on a 100% Basis - combining Mineral Resource
estimates for the
Cortadera, Productora 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 the Canadian Institute of
Mining, Metallurgy and Petroleum (CIM) Standards on Mineral
Resources and Reserves, Definitions and Guidelines prepared by the
CIM Standing Committee on Reserve Definition, as required by
National Instrument 43-101.
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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 CMP Productora (a 100%
subsidiary of Compañía Minera del Pacífico S.A (CMP)).
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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.
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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 has an Option Agreement with a private party
to earn a 90% interest.
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5 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.
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6 Metallurgical recovery averages for
each deposit consider
Indicated + Inferred material
and are weighted to
combine sulphide flotation and oxide leaching
performance. Process recoveries: Cortadera and San Antonio –
Weighted recoveries of 82% Cu, 55% Au, 82% Mo and 37%
Ag. CuEq(%) = Cu(%) + 0.56 x Au(g/t) + 0.00046 x Mo(ppm) +
0.0043 x Ag(g/t). Productora – Weighted recoveries of 84% Cu, 47%
Au, 47% Mo and 0% Ag (not reported). CuEq(%) = Cu(%) + 0.46 x
Au(g/t) + 0.00026 x Mo(ppm). Costa Fuego – Recoveries of 83% Cu,
53% Au, 69% Mo and 23% Ag. CuEq(%) = Cu(%) + 0.52 x Au(g/t) +
0.00039 x Mo(ppm) + 0.0027 x Ag(g/t).
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7 Resource Copper Equivalent (CuEq)
grades are calculated based on the formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm
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× 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
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× Cu recovery). The base case cut-off grade for mineral
resources considered amenable
to open pit extraction methods
at the Cortadera, Productora and San Antonio
deposits is 0.21% CuEq while the cut-off grade for mineral
resources considered amenable to underground extraction methods at
the Cortadera deposit is 0.3% CuEq.
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8 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 categorised
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.
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9 The effective date of the estimate of Mineral Resources is March 31st, 2022. Refer to ASX Announcement "Hot Chili Delivers
Next Level of Growth"
("Resource Announcement") for JORC Code Table 1 information related
to the Costa Fuego Resource
Estimate (MRE) by Competent Person Elizabeth
Haren, constituting the MREs of Cortadera, Productora 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.
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10 Hot
Chili Limited is not aware of political, environmental or other
risks that could materially affect the potential development of the
Mineral Resources.
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SOURCE Hot Chili Limited