THE ASSAY | Coline Sandell-Hay | March 31, 2022
Hot Chili Limited (ASX: HCH) (TSXV:HCH) (OTCQB: HHLKF) has released a major resource upgrade for its coastal range, Costa Fuego copper-gold project in Chile.
Costa Fuego comprises the Cortadera, Productora and San Antonio deposits, all of which have updated Mineral Resource Estimates (MRE) and lie proximal to one another at low-altitude elevations (800m to 1,000m), 600km north of Santiago.
The resource upgrade follows 18 months of material investment, including completion of 52,000 metres of additional resource drilling at Cortadera, purchase of 100% of the Cortadera copper-gold porphyry discovery and execution of an offtake agreement with Glencore for future concentrate production (60% for the first eight years). The Cortadera MRE has delivered the majority of resource growth for Costa Fuego.
Cortadera is defined by over 92,000m of drilling and contains an Indicated resource of 471Mt grading 0.46% CuEq (previously 183Mt grading 0.49% CuEq) and an Inferred resource of 108Mt grading 0.35% CuEq (previously 267Mt grading 0.44% CuEq).
Cortadera’s Indicated resource has grown by 134% and is now able to be studied for conversion into ore reserves in the Company’s Pre-Feasibility Study (PFS), forecast for Q3, 2022.
The Productora MRE has been re-estimated following review of the 2016 MRE, completion of underground mine development and exploration drilling in 2021.
The review and subsequent resource re-estimation has resulted in a material increase in high grade Indicated resources reported above 0.6% CuEq.
High grade open pit resources from Productora are a key focus for the combined PFS and are expected to feature prominently in the early mine schedule for Costa Fuego.
A maiden San Antonio MRE has also been added to the Costa Fuego Hub. San Antonio was historically exploited by small-scale underground mining of high-grade copper. The maiden resource estimate utilised an underground drone survey (increasing the spatial confidence of historic mining activities) and 4,922 metres of drilling undertaken by Hot Chili in 2018.
Managing Director Christian Easterday said the company is encouraged by the initial Inferred resource of 4.2Mt grading 1.2% CuEq.
The high-grade, shallow nature of San Antonio provides an additional open pittable deposit for Costa Fuego’s potential early mine schedule. Further resource upgrade drilling is planned at San Antonio and the nearby Valentina high-grade deposit in the coming months.
“I would like to thank our entire team who have delivered this very strong result on-time and within guidance – elevating Costa Fuego’s position amongst the largest undeveloped copper projects in the world,” Mr Easterday said:
“The world is hungry for advanced, low-risk, senior copper developments with near-term production potential.
“Copper prices are driving higher and new meaningful copper supply is fast becoming a mirage.
“Hot Chili is well positioned to deliver into this forecast supply gap and contribute to the decarbonisation super cycle, particularly due to Costa Fuego’s lower economic hurdle resulting from its low elevation location and proximity to existing infrastructure; including abundant grid power with high renewables contributions.
“We are fully funded for 18 months and on-track to deliver our next resource upgrade and PFS later this year as we transform Costa Fuego into one of the world’s next material copper mines.”