Productora Central Area Resource

The mineral resource estimate is confined within central lease area of the company's Productora project.  Hot Chili controls 12.5km of strike extent along the main mineralised trend at Productora through its own 100% landholdings, purchase-option agreements and a 65% earn-in agreement with CMP (Chile's largest iron ore producer) over its landholdings at the project.

The central lease contains the operating Productora underground copper mine which has been excluded from the resource estimate.    Hot Chili is currently preparing to exercise its 100% purchase option right with the owners of the central lease.  The company is committed to a cooperative relationship with the operators of the underground mine to ensure that mining is allowed to continue under a capped production arrangement during the company's development phase.

The independently calculated mineral resource estimate within the central area includes the results from all RC and diamond drilling completed to the end of July 2011.  The resource estimate also utilised a large underground drilling database and development models provided by the operators of the Productora underground.

The resource has been estimated in accordance with the guidelines of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2004).

 

 

 

Category	Tonnage	Grade(>0.3%Cu)				ContainedMetal(>0.3%Cu)
	(Mt)	Copper	Gold	Molybdenum	CopperEq*	Copper	Gold	Molybdenum	Copper Eq*
		%	(g/t)	(g/t)	%	(Kt)	(KOz)	(Tonnes)	(Kt)
Indicated	31.1	0.6	0.1	159	0.8	185	110	4,942	248
Inferred	54.0	0.6	0.1	138	0.7	298	180	7,476	395
Total	85.1	0.6	0.1	146	0.8	483	290	12,418	644

Note: Figures in the above table are rounded to one significant figure in accordance with Australian JORC Code 2004 guidance on mineral resource reporting.

Approximately 37% of the resource estimate comprises indicated material and 63% inferred material. The majority of the indicated resource lies within the first 200m from surface. The quantity of higher grade copper within the deposit with increasing cut-off grade is outlined in the grade-tonnage curve.

	Reporting	Grade					ContainedMetal
	CutOff	Tonnage	Copper	Gold	Molybdenum	CopperEq*	Copper	Gold	Molybdenum	CopperEq*
	%	(Mt)	%	(g/t)	(g/t)	%	(Kt)	(KOz)	(Tonnes)	(Kt)
INDICATED	0.1	33.1	0.6	0.1	153	0.8	188	117	5,059	255
	0.2	32.8	0.6	0.1	154	0.8	189	112	5,057	257
	0.3	31.2	0.6	0.1	159	0.8	185	110	4,942	248
	0.4	26.1	0.6	0.1	170	0.9	167	100	4,427	225
	0.5	18.8	0.7	0.1	182	0.9	134	81	3,431	179
	0.6	11.5	0.8	0.2	199	1.1	94	57	2,285	125
INFERRED	0.1	56.4	0.5	0.1	136	0.7	304	181	7,666	406
	0.2	56.3	0.5	0.1	136	0.7	304	184	7,666	405
	0.3	54.0	0.6	0.1	138	0.7	298	180	7,476	395
	0.4	45.3	0.6	0.1	142	0.8	267	162	6,440	354
	0.5	31.6	0.7	0.1	151	0.9	207	125	4,774	271
	0.6	16.6	0.8	0.2	177	1.0	125	79	2,938	166
TOTAL	0.1	89.4	0.6	0.1	142	0.7	493	298	12,725	661
	0.2	89.1	0.6	0.1	143	0.7	493	296	12,723	662
	0.3	85.1	0.6	0.1	146	0.8	483	290	12,418	644
	0.4	71.4	0.6	0.1	152	0.8	433	261	10,867	580
	0.5	50.4	0.7	0.1	163	0.9	341	206	8,205	449
	0.6	28.1	0.8	0.2	186	1.0	218	136	5,223	291

A nominal +0.3% copper grade-shell model was utilised to constrain the block model resource estimation. The distribution of gold and molybdenum within the deposit only represents those metals in co-association with copper. It is important to note that significant quantities of molybdenum lie outside the current resource model.

The grade-tonnage curve shows the distribution of grade and tonnes within the resource estimate using increasing minimum copper cut-off grade. The average depth of the resource estimate base is approximately 400m from surface. The resource correlates well with the location and indicative production grade of the Productora underground mine. Underground assessment of mineralisation and geological controls provided valuable information which assisted in the interpretation of constraint models for the resource.

Mineralisation is associated with a series of vertical lodes and some minor sub-horizontal lodes (mantos zones) within a felsic volcanic country rock which has been extensively intruded by a tourmaline breccia along the main mineralised north-east trend.

Sulphide ore mineralogy comprises pyrite, chalcopyrite, bornite and molybdenite developed as breccia, vein and cavity fill, as well as disseminations within the brecciated host rocks. Within the oxide zone copper is dominantly associated with malachite. The resource extends from surface and the average oxidation depth across the resource is approximately 70m vertical depth.