ASX Announcement

Friday 4th September 2020

Cortadera Drilling and Resource Update

Highlights

  • Infill mapping of the large “look-alike” Cortadera North target zone in Chile,identifies significant zones of outcropping copper oxides and copper-bearing veins
  • Cortadera North first-pass drill programme now expanded to nine deep Reverse Circulation holes across the 2km long target zone
  • Two drill rigs in operation, currently testing the Cuerpo 3 North target, located 500m north of the main porphyry at the Cortadera copper-gold discovery.
  • Rigorous cataloguing and assessment of historical drill assay certification (now complete) has pushed out the timeframe for the Cortadera maiden resource which is now expected within the coming weeks, subject to final validation and sign-off.

Hot Chili Limited (ASX code HCH) (“Hot Chili” or “Company”) is pleased to provide an update on its resource development workstreams as well as promising advances made in its exploration and drilling activities at its Cortadera copper-gold discovery in Chile.

Maiden Resource Estimate for Cortadera

Hot Chili has applied a strong degree of internal and external review to the Cortadera maiden resource to ensure the independent estimate is compliant, robust and able to be audited at a high standard.


Through this rigorous and comprehensive review process, Hot Chili has managed to secure all assay certification for historical diamond drill holes. Although retrieval of this information from laboratories in Chile has pushed out the timeframe for the Cortadera maiden resource, it has ensured a very robust resource estimation utilising all historical diamond drilling.

The Company expects to announce Cortadera’s maiden resource as soon as the final estimation is complete and has been approved by Hot Chili’s  resource audit committee in the coming weeks.

Drilling Update at Cortadera

Hot Chili has accelerated drilling at Cortadera with two drill rigs now in operation.


Drilling is currently focussed on testing for the presence of another high grade core below Cuerpo 2 and the potential for a major extension to the main porphyry (Cuerpo 3). Both targets have the potential to contribute significantly towards a second resource estimate for Cortadera that is planned to be undertaken in 1H 2021.


Reverse Circulation (RC) drilling is focussed on completing multiple pre-collars in advance of the commencement of RC drill testing across the Cortadera North target, located 2km north of then Cortadera discovery zone.


Diamond drilling is scheduled to return to double-shift drilling in the coming fortnight, with the first of the three planned diamond holes underway across the Cuerpo 3 North target, located approximately 500m north of the main porphyry at Cortadera.

Exploration Update at Cortadera North

Exploration mapping and infill soil geochemical programmes across the large “look-alike” Cortadera North target have been underway for the past four weeks in the lead-up to first drill testing.


This work has provided further encouragement across the 2km-long target zone, identifying multiple areas of outcropping copper oxides and copper-bearing, porphyry B-veins.


The additional surface mapping results have provided confidence to expand the initial first-pass RC drill programme to nine holes.


Road clearing to provide access to Cortadera North is expected to be complete in the coming ten days and the Company will then commence platform construction of prioritised locations for first drill testing.

Recent significant Option conversions from the Company’s July Placement and Entitlements Offer to shareholders has provided Hot Chili additional funds and confidence to accelerate its drilling activities.


Two drill rigs in operation and the commencement of double-shift diamond drilling is expected to significantly increase the rate of entire-hole drill completions and drilling news flow.


The Company looks forward to providing further updates on its drilling activities across its three high impact growth targets over the coming weeks and months. In particular, the Directors look forward to announcing the Cortadera maiden resource estimate, once all validation and independent sign-off has taken place in the coming weeks.

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

For more information please contact:

Christian Easterday +61 893159009

Managing Director Email: christian@hotchili.net.au

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

Figure 1 Plan view displaying the location of the Cortadera discovery zone in relation to the Cortadera North target. The plan displays the location of Cuerpo 1, 2, 3 and 4 tonalitic porphyry intrusive centres (represented by modelled copper envelopes, yellow- +0.1% Cu and majenta +0.4% Cu) in relation to surface molybdenum anomalism and IP chargeability response at 200m depth slice. Cortadera North, located 2km north of Cortadera displays “look alike” characteristics to the Cortadera discovery.

The images of grade shells do not represent an Exploration Target nor a Mineral Resource and should not be construed as such, in compliance with the JORC code. Please refer to ASX Announcement “Drill Results Expand High Grade Copper-Gold Core at Cortadera”, dated 11th August for further information related to Figure 1 above.

About Cortadera

Cortadera is a privately-owned, major copper-gold porphyry discovery located 600km north of Santiago along the Chilean coastal range, where historical world-class discovery drill results were only publicly released by
Hot Chili in February 2019.


Importantly, Cortadera lies 14km from the Company’s large-scale Productora copper development and adjacent to the high grade El Fuego satellite copper projects, as displayed in Figure 6 below.

Figure 2 Location of Productora and the Cortadera discovery in relation to the consolidation of new growth projects and coastal range infrastructure

On 22 February 2019, Hot Chili announced the execution of a formal Option Agreement to acquire a 100% interest in Cortadera. In early April, the Company commenced a confirmation drilling programme comprising 17 holes.


The drilling has confirmed and extended areas of surface enrichment and wide, higher-grade, copper-gold sulphide mineralisation at depth, which had not previously been closed off by 23,000m of historical diamond drilling.

Hot Chili’s recent drill holes at Cuerpo 3 (the largest of the four porphyries discovered to date) include some of the worlds’ stand-out copper-gold porphyry drill results reported in recent time. The Cuerpo 3 porphyry remains open to the north, south and at depth. Significant intersections include:

  • 972m grading 0.5% copper and 0.2g/t gold from surface(including 412m grading 0.7% copper and 0.3g/t gold)
  • 750m grading 0.6% copper and 0.2g/t gold from 204m down-hole depth (including 188m grading 0.9% copper and 0.4g/t gold)
  • 848m grading 0.4% copper and 0.2g/t gold from 112m down-hole depth (including 184m grading 0.7% copper and 0.3g/t gold)
  • 864m grading 0.4% copper and 0.1g/t gold from 62m down-hole depth(including 348m grading 0.6% copper and 0.2g/t gold),
  • 649m grading 0.4% copper and 0.1g/t gold from 328m down-hole depth (including 440m grading 0.5% copper and 0.2g/t gold),
  • 596m grading 0.5% copper and 0.2g/t gold from 328m down-hole depth (including 184m grading 0.7% copper and 0.3g/t gold), and
  • 542m grading 0.5% copper and 0.2g/t gold from 422m down-hole depth, (including 218m grading 0.7% copper and 0.2g/t gold)

Note: Please refer to ASX announcement “Another Record Step-Out Drill Result at Cortadera” 20th March 2020 for Table 1 information relating to the reporting of exploration results, data and sampling techniques.

Cortadera is shaping up as a globally significant standalone copper-gold project which can utilise the Productora project resources, and leverage from a central processing and combined infrastructure approach
along the coastline of Chile.


The Company’s recent discovery and definition of a higher grade bulk tonnage underground development  opportunity in combination with shallow, high grade bulk tonnage open pit sources – places Cortadera in a unique position amongst potential large-scale global copper-gold developments.

Qualifying Statements

JORC Compliant Ore Reserve Statement

Productora Open Pit Probable Ore Reserve Statement – Reported 2 nd March 2016

Note 1: Figures in the above table are rounded, reported to two significant figures, and classified in accordance with the Australian JORC Code 2012 guidance on Mineral Resource and Ore Reserve reporting. Note 2: Price assumptions: Cu price – US$3.00/lb; Au price US$1200/oz; Mo price US$14.00/lb. Note 3: Mill average recovery for fresh Cu – 89%, Au –
52%, Mo – 53%. Mill average recovery for transitional; Cu 70%, Au – 50%, Mo – 46%. Heap Leach average recovery for oxide; Cu – 54%. Note 4: Payability factors for metal contained in concentrate: Cu – 96%; Au – 90%; Mo – 98%. Payability factor for Cu cathode – 100%.

JORC Compliant Mineral Resource Statements

Productora Higher Grade Mineral Resource Statement, Reported 2nd March 2016

Reported at or above 0.25 % Cu. Figures in the above table are rounded, reported to two significant figures, and classified in accordance with the Australian JORC Code 2012 guidance on Mineral Resource and Ore Reserve reporting. Metal rounded to nearest thousand, or if less, to the nearest hundred.

Productora Low Grade Mineral Resource Statement, Reported 2nd March 2016

Reported at or above 0.1% Cu and below 0.25 % Cu. Figures in the above table are rounded, reported to two significant figures, and classified in accordance with the Australian JORC Code 2012 guidance on Mineral Resource and Ore Reserve reporting. Metal rounded to nearest thousand, or if less, to the nearest hundred. The Productora lower grade resource
directly informs the dilution model for the Productora Ore Reserve estimate.

Mineral Resource and Ore Reserve Confirmation

The information in this presentation that relates to Mineral Resources, Ore Reserve estimates and Production Targets on the Productora copper project was previously reported in the ASX announcement “Hot Chili Delivers PFS and Near Doubles Reserves at Productora” dated 2nd March 2016, a copy of which is available on the ASX website at www.asx.com.au and the Company’s website at www.hotchili.net.au. The company confirms that it is not aware of any new formation or data that materially affects the
information included in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in that announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement

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- Mineral Resources

The information in this Announcement that relates to the Productora Project Mineral Resources, is based on information compiled by Mr J Lachlan Macdonald and Mr N Ingvar Kirchner. Mr Macdonald is employed by AMC Consultants (AMC), and is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). 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). Both Mr Macdonald and Mr Kirchner have 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).

Competent Person’s Statement- Ore Reserves

The information in this Announcement that relates to Productora Project Ore Reserves, is based on information compiled by Mr Carlos Guzmán, Mr Boris Caro, Mr Leon Lorenzen and Mr Grant King. Mr Guzmán is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM), a Registered Member of the Chilean Mining Commission (RM- a ‘Recognised Professional Organisation’ within the meaning of the JORC Code 2012) and a full time employee of NCL Ingeniería y Construcción SpA (NCL). Mr Caro is a former employee of Hot Chili Ltd, now working in a consulting capacity for the Company, and is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and a Registered Member of the Chilean Mining Commission. Mr Lorenzen is employed by Mintrex Pty Ltd and is a Chartered Professional Engineer, Fellow of Engineers Australia, and is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr King is employed by AMEC Foster Wheeler (AMEC FW) and is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). NCL, Mintrex and AMEC FW have been engaged on a fee for service basis to provide independent technical advice and final audit for the Productora Project Ore Reserve estimate. Mr. Guzmán, Mr Caro,Mr Lorenzen
and Mr King have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity which they are 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’.

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.

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