Costa Fuego Lifts Growth Horizon

ASX Announcement

Friday 17th September 2021

View looking SE across Productora – New, large 3D geochemical target set to be drilled in Q4 this year

Highlights
  • Advanced Three-Dimensional (3D) Geochemical targeting, using multielement surface geochemical data, has been applied for the first time across Hot Chili’s consolidated Costa Fuego copper-gold development hub in Chile
  • The 3D geochemical approach generated probability models which accurately mirrored existing copper resource models at both Cortadera and Productora
  • Two, large-scale, 3D geochemical targets have been identified as high probability for immediate drill testing– Productora Central and Santiago Z – both considered potential game changers for Costa Fuego’s growing resource base
  • Both new 3D geochemical targets are larger in size than the main porphyry (Cuerpo 3) at the Company’s Cortadera copper-gold discovery, where three drill rigs are currently operating to upgrade its maiden 451Mt resource
  • A fourth drill rig is being secured to commence exploration drilling at Productora Central in Q4 this year and regulatory approval for drilling at Santiago Z is expected in December. 
  • Next assay results from resource expansion drilling at Cortadera expected shortly

Hot Chili Limited (ASX: HCH) (OTCQB: HHLKF) (“Hot Chili” or “Company”) is pleased to announce that it is preparing to commence drilling a series of large-scale exploration targets in parallel with resource expansion drilling at its Costa Fuego copper-gold development hub in Chile.

Costa Fuego combined resource base (Cortadera and Productora) currently stands of 724Mt grading 0.48% CuEq for 2.9Mt copper, 2.7Moz gold, 9.9Moz silver and 64kt molybdenum.

Expansion drilling at Cortadera continues to deliver strong growth ahead of a planned major resource upgrade and the Company has accelerated exploration across its coastal range landholdings over the past year.

Exploration workstreams have included expanded surface geochemical surveys, detailed surface mapping, completion of ground magnetic surveys and the Company’s first-ever application of advanced three-dimensional (3D) geochemical targeting.

The Company plans to commence drilling its pipeline of large exploration growth targets in Q4 this year using a dedicated fourth drill rig.  Two of these targets have been recently generated by 3D geochemical modelling and represent potential game changers for the scale of Costa Fuego.

Two Large 3D Geochemical Targets Added to Costa Fuego Exploration Pipeline

The relatively new 3D geochemical technique was applied to the Company’s extensive multielement (48 elements) surface geochemical datasets collected across the Cortadera, Santiago Z and Productora landholdings within Costa Fuego.

Probability models of potential mineralisation were generated by Fathom Geophysics, using advanced algorithms developed from an extensive study of the spatial distribution of pathfinder element associations across the Yerrington copper-gold porphyry deposit in Nevada, USA (928Mt grading 0.51% Cu, 0.05g/t Au and 1.85g/t Ag – source USGS) (Cohen, 2011; and Halley et al, 2015).

In addition to confirming the techniques’ ability to locate Hot Chili’s existing copper-gold resources, two high-probability targets were generated which have larger dimensions than the main porphyry (Cuerpo 3) at the Company’s Cortadera copper-gold discovery:

 

1. Productora Central

Productora is a breccia-hosted copper-gold deposit located along the eastern flank of a 6km long porphyry lithocap.  Significant exploration efforts have previously been unsuccessful in locating the potential source for approximately 1.2Mt copper and 0.8Moz gold deposited into the Productora breccia fault corridor.

A high probability 3D geochemical target measuring 1.2km by 1km in dimension has been located along the western flank of the planned central pit area of the Productora resource (Productora Central). 

The location of the Productora Central target along the regionally important NW-trending Serrano fault zone, and its location with respect to the most well-endowed sections of the Productora resource is considered particularly encouraging.  Previous shallow exploration drilling over this target area failed to penetrate an extensive advanced argillic clay zone, which was believed to overlie a large-scale porphyry.

Several other large-scale 3D geochemical targets have also been identified within the Productora landholding.

2. Santiago Z

A recently completed ground magnetic survey has confirmed a large coincident magnetic low, in association with a 4km long, surface molybdenum anomaly earlier identified at Santiago Z (as reported to ASX 9th April 2021). 

3D geochemical modelling has confirmed a corresponding high probability target measuring +1.6km by +1km in dimension.

A regulatory application for first-pass drilling has been submitted and is expected to be approved in December.

Further extensional surface geochemistry and mapping programmes are currently underway across the Cortadera project to further resolve the Cortadera North growth target ahead of 3D geochemical modelling and next exploration drilling.  This work is part of a larger exploration rationalisation and prioritisation process underway across the Company’s landholdings.

Hot Chili looks forward to lifting its growth horizon over the coming twelve months by leveraging its regional consolidation strategy with new discoveries and potential acquisitions.

Further resource expansion drill results from Cortadera and development study updates are expected to be released shortly.

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

For more information please contact:

Christian Easterday
Managing Director Tel: +61 8 9315 9009
Email: christian@hotchili.net.au

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

Figure 1 Location of Productora and the Cortadera discovery in relation to the coastal range infrastructure of Hot Chili’s combined Costa Fuego copper project, located 600km north of Santiago 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

Figure 2  Plan view across the Cortadera discovery area displaying recent 3D Geochemical Modelling of surface geochemistry.  Note the high (pink) and very high (red) probability model location in relation to the existing copper resource outline (yellow).  The northwest-trending Serano fault corridor extends to Productora, located 14km to the northwest of Cortadera.

Figure 3  Plan view across the Productora central resource area displaying recent 3D Geochemical Modelling of surface geochemistry.  Note the high (pink) and very high (red) probability model location in relation to the existing copper resource outline (yellow).  A large very high probability target has been modelled along the northwest-trending Serrano fault and flanking the western margin of the central resource drilling coverage.

Figure 4  Plan views displaying recently acquired ground magnetic survey in addition to 3D Geochemical Modelling of surface geochemistry across the Santiago Z surface molybdenum anomaly.  Correlation of surface geochemistry, mapping, magnetics and 3D geochemical modelling outlines a compelling large-scale target for first-pass drill testing.  Santiago Z is located approximately 5km south of Cortadera

To read the full announcement click on the below link

http://www.hotchili.net.au/wp-content/uploads/2021/09/HCH_23_Costa-Fuego-Lifts-Growth-Horizon_17092021.pdf

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