What are key updates from Hot Chili in 2023?

In 2023, the most significant update for Hot Chili was the PEA of the Costa Fuego project, issued in late June. The latest resource revealed an indicated resource of 798 million t grading 0.45% CuEq and an Inferred Resource of 203 million t grading 0.31%, totaling 3.4 million t of copper content (2.9 million t indicated and 0.5 million t inferred). The project boasts 3 million oz of gold (2.6 million oz indicated and 0.4 million oz inferred), 68 million lb of molybdenum (56 million lb indicated and 12 million lb inferred), and 15.8 million oz of silver (12.9 million oz indicated and 2.9 million oz inferred).

With more than 85% of its mineral content being copper, Costa Fuego is well-positioned for the looming structural shortage in copper supply. The project features a low start-up capital with a fast payback period, 16 years of mine life (both open pit and underground), and an average annual production of 95,000 t of fine copper (112,000 t of CuEq). 97% of the latest inventory is indicated, showing a high confidence level in the resource. For every US$0.1 cents increase in the copper price above US$3.85/lb, the post-tax NPV increases by US$100 million. What makes the Costa Fuego project unique?

This well-defined, low-risk ore body is located at a low elevation of less than 1,000 meters in the coastal range. Unlike high-altitude projects, Costa Fuego requires lower CapEx and faces fewer logistical challenges. Its proximity to infrastructure (about 55 km from the port, right on the side of the Pan American Highway), just 600 kilometers north of Santiago, enhances feasibility of construction. What are the benefits of the MOU with Las Losa Port for Hot Chili?

The MOU with Las Losas Port allows Hot Chili to negotiate a binding port service agreement. We will fund 20% of the cost over two years to develop a feasibility study for a bulk tonnage copper concentrate facility. Las Losas Port currently lacks such a facility. This collaboration aims to minimize OpEx for loading bulk copper. The agreement also involves selecting engineering companies to advance the project, ensuring that Costa Fuego will use Las Losas Port for exporting concentrates. How does Hot Chili plan to leverage the recent copper price highs?

Hot Chili aims to capitalize on this favorable market by advancing the Costa Fuego project quickly. The PEA was based on a copper price of $3.85/lb, but with current prices around $4.75/lb, the project's financial outlook is significantly improved. Hot Chili is focused on moving towards construction as fast as possible as copper price is the biggest sensitivity issue of the project. This strategy is supported by recent successful fundraising efforts, ensuring sufficient cash reserves to advance studies and avoid delays typically caused by funding constraints. Can you elaborate on the new water company and its collaboration goals?

Hot Chili is launching a new water company to tackle water scarcity in the Atacama region. Leveraging a process that took eight-years to get the water concession, we will supply desalinated water to industrial firms and communities in the El Huasco valley, aiming to foster collaboration, lessen environmental impact, and cut costs. Initially serving the Costa Fuego project, we are in talks with several potential off-takers. Why is the Domeyko project acquisition significant for Hot Chili?

This acquisition aligns with Hot Chili's strategy of thorough regional exploration in the Atacama region. This project offers significant exploration potential, and Hot Chili plans to evaluate it quickly through early exploration and drilling. If the results are promising, we will advance it; otherwise, we will drop the options. This approach aims to continually increase the metal resources and exploration footprint, enhancing the overall project portfolio and ensures a steady pipeline of projects to meet growing copper demand. What are Hot Chili's drilling plans and key objectives for the next couple of years?

Hot Chili is currently engaged in a 10,000-meter drilling campaign, focusing on technical geotechnical drilling, metallurgical drilling, and hydro drilling to support the PFS and environmental studies. While exploration drilling continues, the primary focus is on advancing the Costa Fuego project. The company aims to complete the PFS by year-end 2024 and to submit an EIA in the first semester next year.