ASX Announcement

Tuesday 11th August 2020

Drill Results Expand High Grade Copper-Gold Core at Cortadera

Drilling Set to Commence on Cuerpo 2


Highlights

New drill results have expanded the high grade core at Hot Chili’s Cortadera discovery in Chile, confirming continuity over an 800m vertical extent

Significant Drill Result for CRP0016D

190m grading 0.6% copper & 0.2g/t gold

from 392m down-hole depth

(plus additional silver and molybdenum credits)

  • Ongoing drilling continues with multiple pre-collars being completed ahead of first diamond drilling outside of the main porphyry (Cuerpo 3) at Cortadera.
  • Diamond drilling at Cuerpo 2 to begin shortly – testing for potential high grade core
  • Cortadera maiden resource undergoing final stages of estimation, validation and review

Hot Chili Limited (ASX code HCH) (“Hot Chili” or “Company”) is pleased to announce the beginning of a second phase of growth at the Company’s Cortadera copper-gold discovery in Chile.

New drill results from CRP0016D confirm the high grade core discovered within the largest porphyry at Cortadera (Cuerpo 3) is continuing to expand.

CRP0016D recorded 190m grading 0.6% copper and 0.2g/t in a predicted extension to the currently defined high grade core which remains open for growth in several key areas.

Importantly, the CRP0016D high grade intercept is not included within the forthcoming maiden resource estimate for Cortadera.

With the maiden Cortadera resource being finalised, Hot Chili is now preparing to take its first step towards drill testing outside of the main porphyry at Cortadera.

Multiple Reverse Circulation (RC) pre-collars are being prepared for diamond drilling to test three large growth targets:

1. Cuerpo 2 – potential for another high grade core

2. Cuerpo 3 North – potential for the main porphyry to extend a further 500m to the north

3. Cortadera North – “look-alike” potential for a second large porphyry discovery, located 2km north of Cortadera.

The current resource expansion drilling programme will recommence following the completion of the growth target drilling. There are a further six holes to be completed for inclusion into a second resource estimate planned for Cortadera in early 2021.

New Drill Results Kick-off Second Growth Phase at Cortadera

Results returned for the first two drill holes of the Company’s third-phase drilling programme have provided strong encouragement for continued growth of the Cortadera discovery.

New results from a 300m diamond tail extension (CRP0016D) have added significantly to the high grade core within the Cuerpo 3, confirming continuity over a near-800m vertical extent.

The Company also received results for its first diamond hole CRP0042D which was abandoned at 952m down-hole depth owing to significant deviation from its intended target.

CRP0042D recorded 314m grading 0.4% copper & 0.1g/t gold from 616m down-hole depth, providing further definition to the southern flank of the main porphyry. The Company plans to re-enter CRP0042D for future navi/wedge drilling of the intended target.

Hot Chili is currently completing multiple Reverse Circulation (RC) pre-collar drill holes to facilitate further diamond drilling at both Cuerpo 3 as well as three large growth targets which have been prioritised for immediate drilling. Diamond drilling is expected to re-commence shortly with first deep testing of Cortadera’s second largest porphyry – Cuerpo 2.

In addition, clearing is underway to provide road access to the 2km-long Cortadera North target for first drill testing within the coming months. The Company’s exploration team have been undertaking in-fill mapping and soil geochemistry across this large target area in the lead up to finalising first-pass drill design.

Hot Chili looks forward to providing further updates as drilling progresses.

The Company’s maiden resource for Cortadera is nearing completion and is expected to provide a strong foundation for the Company to build upon with continued drill success.

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

For more information please contact:

Christian Easterday                         +61 8 9315 9009

Managing Director                            christian@hotchili.net.au

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

Table 1 New Significant DD Drill Results at Cortadera

The following figures 1 to 5 include images related to exploration modelling of the Cortadera discovery. Indicative grade shell models (+0.1% Cu and +0.4% Cu) generated in leapfrog software utilising Hot Chili’s 4 Dimensional geological model to guide morphological control are provided for
reference only.


The images of grade shell models are not an Exploration Target and do not contain nor indicate any estimate of potential size and grade ranges for the Cortadera discovery. No Mineral Resource estimate has been completed for Cortadera at this time. 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.

Figure 1 Plan view across the Cortadera discovery area displaying significant historical copper-gold DD intersections across Cuerpo 1, 2, 3 and 4 tonalitic porphyry intrusive centres (represented by modelled copper envelopes, yellow- +0.1% Cu and majenta +0.4% Cu). Note the selected HCH drilling intersections (Red) and selected historical drilling intersections (white).

 

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.

Figure 2 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.

Figure 3 Plan view of Cuerpo 3 – the Main porphyry of the four porphyry centres discovered to date at Cortadera. Note the growing extent of the modelled higher grade copper zone (majenta wireframe – +0.4% Cu) and the location of open boundaries for growth of the bulk copper envelope at Cortadera (yellow wireframe – +0.1% Cu).

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.

Figure 4 Long Section of the Cortadera discovery copper distribution model from the recently updated 4-dimmensional geological model. Note the growing extent of the high grade core within Cuerpo 3 and Cuerpo 2, and the location of CRP0042D. 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

Figure 5 Type Section A displaying HCH DD extensional drill results and recent 3D modelling of copper distribution at Cortadera. The section lies in the central northwest of Cuerpo 3. Note the location of hole CRP0016D in relation to the modelled high grade zone.

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

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 6 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.

Table 2 SNL List of Best 25 Cu-Au Drill Intercepts Since January 2018
(Ordered by Width of Drill Intersection)

Source- Regulus Resources (TSXV. REG) November 2019 Corporate Presentation (slide 10) as per SNL financial, SNL search criteria include: >450 m interval, primarily copper interval & reported after Jan 1, 2018. Only longest reported interval considered. Results ordered by down-hole width of drill intersection and addition of CRP0029D and CRP0040D result. SNL has not provided consent to Hot Chili to use this data and Hot Chili has not verified the individual exploration results from other companies reported in the table and sourced from Regulus Resources November 2019 Corporate Presentation.

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 2 nd 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.

JORC Code, 2012 Edition – Table 1 report template

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

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