ASX Announcement Tuesday 2nd March 2021

4km Long Copper Porphyry Footprint Secured Next to Cortadera – Santiago Z


Highlights

  • A new landholding named Santiago Z has been consolidated by Hot Chili, 5km south of its world-class Cortadera copper-gold discovery in Chile
  • Santiago Z contains a large historical soil molybdenum anomaly that is more than twice the size and four times the tenor of Cortadera’s soil molybdenum footprint
  • Exploration efforts by Hot Chili over the past 6 months have confirmed Santiago Z as a large-scale copper porphyry footprint, which has never been drill tested
  • Copper-bearing hydrothermal breccias and porphyry intrusive stocks have been mapped in several locations coincident with the Santiago Z soil molybdenum anomaly
  • Detailed mapping and geophysics (IP/MT) is planned for the first half of 2021 in advance of first-pass drilling later in 2021
  • Assay results are pending for a large surface mapping and soil geochemical programme already completed in December and January across Santiago Z
Figure 1. Location of the Santiago Z footprint, 5km south of the Cortadera Cu-Au discovery

Hot Chili Limited (ASX code HCH) (“Hot Chili” or “Company”) is pleased to confirm the addition of an exciting new land holding, named Santiago Z, to the Company’s Costa Fuego copper development in Chile.

Importantly, Santiago Z contains a large historical soil molybdenum anomaly that is approximately twice as large as the soil molybdenum anomaly related to the Cortadera copper-gold porphyry discovery, located just 5km to the north.

Santiago Z adds an additional 20 per cent (5,468ha) to the Company’s Costa Fuego landholdings.

Exploration by Hot Chili across Santiago Z has confirmed the 4km-long soil molybdenum anomaly is associated with a zone of hydrothermal brecciation related NS regional-scale Las Cañas-El Torito reverse faults and to a corridor of porphyries which have intruded the shallowly dipping local volcano-sedimentary sequence, similar to the Cortadera porphyry deposit setting.

During December and January, Hot Chili undertook a mapping and soil geochemical sampling programme at Santiago Z.  Assay results from the geochemical programme are expected to be received in the coming weeks.  Initial XRF analysis at each soil site has replicated and confirmed the size and grade of the historical soil XRF molybdenum anomaly.  

Hot Chili’s XRF soil molybdenum data correlates very well with soil molybdenum assay results in all campaigns undertaken by the Company.

Molybdenum is a key pathfinder element used to identify copper porphyry systems in leached soil profiles and the Company is encouraged by the size (4km x 2km in dimension) and tenor (+10ppm Molybdenum) of the Santiago Z anomaly in relation to the discovery footprint of Cortadera as displayed on Figure 2 below.

Figure 2. Side-by-side soil molybdenum footprints of Cortadera and Santiago Z at the same scale.
Figure 3 Location of Santiago Z landholding in relation to the Company’s Costa Fuego copper project and coastal range infrastructure in Chile
Refer to ASX Announcement “Costa Fuego Becomes a Leading Global Copper Project” (12th October 2020) for JORC Table 1 information related to the Cortadera JORC compliant Mineral Resource estimate by Wood and the Productora re-stated JORC compliant Mineral Resource estimate by AMC Consultants
* Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery)+(Mo ppm × 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). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,550 USD/oz, Mo=12 USD/lb, and Ag=18 USD/oz. For Cortadera (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=51%, Mo=67% and Ag=23%.
** Reported on a 100% Basis - combining Cortadera and Productora Mineral Resources using a +0.25% CuEq reporting cut-off grade


Santiago Z Landholding Consolidation

 

Hot Chili’s 100% owned subsidiary Sociedad Minera Frontera SpA (Frontera) has consolidated a significant landholding across Santiago Z over the past six months, as outlined in Figure 3 above.

The Santiago Z historical surface soil molybdenum anomaly is primarily contained within exploration leases privately held by the same Chilean landowner with which the Company has an Option agreement in-place across the San Antonio high grade copper mine.

The private Chilean landowner has agreed to include these key leases into the San Antonio Option agreement (as announced to the Australian Securities Exchange 8th November 2017) at no cost and has also agreed to a 24-month extension of term to the original 90% earn-in Option agreement.

Since rationalising the Option agreement for San Antonio and Santiago Z, the Company has also applied for and secured several exploration applications (100% interest) immediately surrounding the privately held Santiago Z leases.

The revised Option timetable provides Hot Chili sufficient time to assess both Santiago Z and San Antonio and is as follows:

  1. Oct 2020 – first extension fee payment – US$100,000 (already satisfied)
  2. April 2021 – second extension fee payment US$100,000
  3. Nov 2022 – first Option instalment payment US$300,000
  4. Nov 2023 – final Option instalment payment – US$6,700,000

Figure 4 below outlines the various leases controlled by Hot Chili through its active Option agreements and direct ownership.

Figure 4. Consolidation map of the Cortadera, El Fuego and Santiago Z landholdings

The Company is focussed on the rapid growth of Cortadera toward a major resource upgrade later this year and the advancement of combined development studies for Costa Fuego. 

The Directors of Hot Chili are pleased with the addition of Santiago Z to its exploration pipeline and the cooperation of its partners in Chile to further consolidate and strengthen the potential scale of the combined Costa Fuego copper development.

Further updates and new assay results from the Company’s 40,000m drilling programme at Cortadera are expected to be released shortly.

Santiago Z – Surface mapping rock specimens from November 2020. Top left -Hydrothermal breccia (hematite boxwork & brochantite), Top right – chrysocolla, Bottom left & right – Hydrothermal breccia

This announcement is authorised by the Board of Directors for release to ASX.

For more information please contact:

Christian Easterday Tel: +61 8 9315 9009

Managing Director Email: christian@hotchili.net.au

or visit Hot Chili’s website at www.hotchili.net.au

Qualifying Statements

Independent JORC Code Costa Fuego Combined Mineral Resource (Reported 12th October 2020)
Reported at or above 0.25% CuEq*. Figures in the above table are rounded, reported to appropriate significant figures, and reported in accordance with the JORC Code - Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Metal rounded to nearest thousand, or if less, to the nearest hundred. * * Copper Equivalent (CuEq) reported for the resource were calculated using the following formula:: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery)+(Mo ppm × 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). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,550 USD/oz, Mo=12 USD/lb, and Ag=18 USD/oz. For Cortadera (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=51%, Mo=67% and Ag=23%.

** Note: Silver (Ag) is only present within the Cortadera Mineral Resource estimate

Competent Person’s Statement- Exploration Results

Exploration information in this Announcement is based upon work compiled by Mr Christian Easterday, the Managing Director and a full-time employee of Hot Chili Limited whom is a Member of the Australasian Institute of Geoscientists (AIG). Mr Easterday has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a ‘Competent Person’ as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code). Mr Easterday consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Competent Person’s Statement- Productora Mineral Resources

The information in this Announcement that relates to the Productora Project Mineral Resources, is based on information compiled by Mr N Ingvar Kirchner. Mr Kirchner is employed by AMC Consultants (AMC). AMC has been engaged on a fee for service basis to provide independent technical advice and final audit for the Productora Project Mineral Resource estimates. Mr Kirchner is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM) and is a Member of the Australian Institute of Geoscientists (AIG). Mr Kirchner has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code 2012). Mr Kirchner consents to the inclusion in this report of the matters based on the source information in the form and context in which it appears.

Competent Person’s Statement- Cortadera and Costa Fuego Mineral Resources

The information in this report that relates to Mineral Resources for the Cortadera and combined Costa Fuego Project is based on information compiled by Elizabeth Haren, a Competent Person who is a Member and Chartered Professional of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Elizabeth Haren is employed as an associate Principal Geologist of Wood, who was engaged by Hot Chili Limited. Elizabeth Haren has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a
Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Elizabeth Haren consents to the inclusion in the report of the matters based on her information in the form and context in which it appears.

Reporting of Copper Equivalent

Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery)+( Mo ppm × 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). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,550 USD/oz, Mo=12 USD/lb, and Ag=18 USD/oz. For Cortadera (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=51%, Mo=67% and Ag=23%.

Forward Looking Statements

This Announcement is provided on the basis that neither the Company nor its representatives make any warranty (express or implied) as to the accuracy, reliability, relevance or completeness of the material contained in the Announcement and nothing contained in the Announcement is, or may be relied upon as a promise, representation or warranty, whether as to the past or the future. The Company hereby excludes all warranties that can be excluded by law. The Announcement contains material which is predictive in nature and may be affected by inaccurate assumptions or by known and unknown risks and uncertainties and may differ materially from results ultimately achieved.

The Announcement contains “forward-looking statements”. All statements other than those of historical facts included in the Announcement are forward-looking statements including estimates of Mineral Resources. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, copper, gold and other metals price volatility, currency fluctuations, increased production costs and variances in ore grade recovery rates from those assumed in mining plans, as well as political and operational risks and governmental regulation and judicial outcomes. The Company does not undertake any obligation to release publicly any revisions to any “forward-looking statement” to reflect events or circumstances after the date of the Announcement, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. All persons should consider seeking appropriate professional advice in reviewing the Announcement and all other information with respect to the Company and evaluating the business, financial performance and operations of the Company. Neither the provision of the Announcement nor any information contained in the Announcement or subsequently communicated to any person in connection with the Announcement is, or should be taken as, constituting the giving of investment advice to any person

To download the announcement please click on the below link.

4km-Long-Porphyry-Footprint-Secured-Next-to-Cortadera_02032021

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