Hot Chili delivers boost to Chilean copper-gold resources

By Bulls N’ Bears

An aerial view over Hot Chili’s coastal site for its potential regional desalination water project. Credit: File

Hot Chili has unveiled a six per cent boost to the indicated copper-gold resource at its Costa Fuego project in Chile’s Atacama region, about 600km north of the Santiago capital, giving it an enhanced total of 3.62 million tonnes of copper-equivalent.

The company has also today confirmed that is has completed a concept study confirming the potential for a whopping long-term, regional multi-user desalination water supply network. Management believes such a move could trigger substantial mining investment in the area.

Hot Chili says 85 per cent of its mineral resource estimate now sits in the indicated category, with its proposed open pit development accounting for 93 per cent of the resource and seven per cent comprising the underground mining scenario.

The total Costa Fuego resource in the indicated category is 798 million tonnes grading 0.45 per cent copper-equivalent for 2.9 million tonnes copper, 2.6 million ounces gold, 12.9 million ounces silver and 68,000 tonnes of molybdenum. The total resource classified as inferred is 203 million tonnes at 0.31 per cent copper-equivalent for 500,000 tonnes copper, 400,000 ounces gold, 2.4 million ounces silver and 12,000 tonnes molybdenum.

The company says a high-grade component, classified as being more than 0.6 per cent copper-equivalent, has been increased by nine per cent and contains indicated resources of 173 million tonnes at 0.78 per cent copper-equivalent for 1.1 million tonnes copper, 1 million ounces of gold, 4.3 million ounces silver and 25,000 tonnes molybdenum.

High-grade inferred resources total 7 million tonnes grading 0.74 per cent copper-equivalent for 40,000 tonnes copper, 30,000 ounces gold, 100,000 ounces of silver and 1000 tonnes molybdenum.

The Costa Fuego project comprises the Cortadera, Productora, Alice and San Antonio deposits and management says all have updated mineral resource estimates. All deposits are in close proximity and sit at low altitude, about 800m to 1000m.

The company says most of the resource is within the Cortadera deposit, which contains about 64 per cent of total indicated resources and 69 per cent of total inferred estimates.

The Productera deposit has about 33 per cent of the indicated and 30 per cent of the inferred resources. The Alice and San Antonio deposits make up the remaining balance of the resource.

Management says the resources update follows 24,500m of drilling across the project, comprising a mix of resource expansion and exploration drilling, in addition to metallurgical and geotechnical work. Management says it has a strong platform to deliver a maiden mineral reserve in its upcoming prefeasibility study (PFS) that is expected to be completed in the second half of this year.

Meanwhile, the company’s now-completed concept study for a staged water network development is based on an initial 300 litres per second scale and is supported by a group of potential founding offtakers. The study is assessing a potential 100 per cent renewable energy-driven desalination water project with the potential to supply agricultural, community and new mining demand in the Huasco valley region, near the Costa Fuego project, of up to 3700 litres per second.

The opportunity to develop a regional water business for the southern Atacama is exciting. It brings together the perfect marriage of economic, environment and social benefits for a wide range of stakeholders.

Hot Chili managing director and chief executive officer Christian Easterday

Easterday said the company had spent more than 10 years of investment to obtain the necessary water concession and permits. The region contains six major undeveloped copper projects and two new, large-scale copper discoveries, with all projects requiring desalinated water supply.

The company says it holds the only granted maritime water concession and most of the necessary permits to provide much-needed critical water to the region. It says the Chilean Government is actively encouraging investment in multi-user water networks in the region, with water scarcity being one of the biggest obstacles facing new global copper supply.

Hot Chili is engaging with several potential infrastructure partners and reviewing the potential for direct government support to assist with driving the project forward.

With its copper resource growing bigger and with an expected high demand for the red metal due to the increased push for renewable energy in the future, Hot Chili could be poised to really heat up the mining sector.