Hot Chili Limited (ASX:HCH) Announces Costa Fuego PFS and Maiden Ore Reserve
Preliminary Feasibility Study and Ore Reserve
Hot Chili Limited has announced the completion of the Preliminary Feasibility Study (PFS) and the maiden ore reserve for its Costa Fuego Cu-Au Project. The PFS showcases a low-risk, coastal copper development in Chile with advanced permitting, a multi-decade mine life, top quartile copper production scale, and the lowest quartile capital intensity. The project has a post-tax Net Present Value (NPV8%) of approximately US$1.2 billion and a post-tax Internal Rate of Return (IRR) of 19%, demonstrating strong economics and leverage to rising copper prices. The maiden ore reserve consists of 502 Mt at 0.37% Cu, 0.10 g/t Au, 0.49 g/t Ag, and 97 ppm Mo, significantly lowering operational risk.
PFS for Huasco Water and Seawater Supply MOU
In addition to the Costa Fuego PFS, Hot Chili Limited announced a PFS for the Huasco Water project and a Memorandum of Understanding (MOU) for seawater supply to Costa Fuego. The Stage 1 PFS for a potential seawater supply of 500L/s has a post-tax NPV8% of US$122 million and an IRR of 19%. The project aims for staged growth, with Stage 2 proposing a desalinated water supply of 1,300L/s, expected to achieve a post-tax NPV8% of US$977 million and an IRR of 19%. Hot Chili holds a first-mover advantage with the only active maritime license in the Huasco Valley region of Chile.
Exploration Updates
Drilling operations at the La Verde copper-gold discovery, located 30km south of Costa Fuego, have continued to show promising results. The latest assay results from nineteen drill holes confirm La Verde as a major copper-gold porphyry discovery with significant mineralisation extending over 300m vertically. The Phase 1 drill programme was completed on 10 April 2025, with Phase 2 planned pending regulatory approval. Hot Chili is advancing deeper diamond drill testing and integrating La Verde into the Costa Fuego project to enhance overall project economics.
Corporate Activities
As of 31 March 2025, Hot Chili Limited reported a cash position of A$7.5 million with no debt. The company anticipates receiving approximately A$5 million from VAT repayments and joint venture recoup from its partner CMP. Operating expenditures for the quarter included A$7.9 million in exploration and evaluation, with plans to reduce monthly expenditures by 60-65% over the next six months. In board changes, Dr Nicole Adshead-Bell and Mr Stephen Quin have resigned, and Mrs Fiona Van Maanen has been appointed as an Independent Non-Executive Director. Further executive appointments are planned to strengthen the company’s capabilities.
Health, Safety, Environment and Quality
Hot Chili Limited reported zero Lost Time Injuries (LTI) during the quarter, underscoring its commitment to health and safety. The company continues to monitor and improve its health, safety, and environmental systems, aiming to ensure the safety of its workforce and the surrounding communities.
Motley Fool contributor Aaron Shaw has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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