News

Hot Chili locks in US$15m royalty deal for Costa Fuego copper

• Hot Chili amends royalty agreement with OR Royalties to secure an additional US$15m in non-dilutive funding
  
  
• Proceeds to accelerate La Verde resource development and optimised Costa Fuego Prefeasibility Study activities
  
  
• Drilling at La Verde is ongoing ahead of planned MRE
  
  Special Report: Hot Chili has secured a further US$15 million in non-dilutive funding through an amended royalty agreement with OR Royalties, strengthening funding support for its Costa Fuego copper-gold project in Chile.

  The amended deal grants OR a net smelter return royalty over Hot Chili’s (ASX:HCH) La Verde project, in exchange for the cash payment.

  This transaction lifts total OR royalty consideration to US$30m with the additional US$15m expected to be received this month subject to customary conditions being satisfied or waived.

  The original 2023 OR royalty arrangement was completed alongside the company’s preliminary economic assessment for Costa Fuego, which was based on a 725Mt Indicated resource.

  Since then, Hot Chili has updated its Indicated MRE to 798Mt at 0.45% CuEq.

  The new agreement expands OR’s royalty exposure across Costa Fuego by including La Verde – a recent discovery without a resource estimate yet.

  Management believes OR’s decision to commit further funding provides third-party endorsement of the resource estimation potential at La Verde and the wider district-scale exploration opportunity.

  “When OR first invested in Costa Fuego in 2023, they were backing Hot Chili with a published PEA and a 725Mt indicated resource base,” noted HCH managing director Christian Easterday.

  “This time, they are committing another US$15 million to a pre-resource deposit, which speaks directly to the scale of what we see at La Verde and the potential impact it has for our future Costa Fuego copper-gold production hub.”

  “This transaction achieves two things simultaneously: it funds the advancement of La Verde without share dilution; and it gives the market a credible third-party datapoint on the value of an asset that has yet to be formally quantified.”

   

  

   

  La Verde takes shape

  Costa Fuego hosts three deposits that combine for the 798Mt Indicated and 203Mt Inferred resource.

  A PFS in March last year outlined a 20-year mine life, positioning the project as a potential long-term copper supplier.

  Hot Chili is targeting first production at Costa Fuego early next decade.

  The nearby La Verde discovery could further strengthen the project’s economics and extend mine life.

  In late 2024, first-pass RC drilling confirmed a significant copper footprint measuring 1000m by 750m and extending up to 400m depth at La Verde, with a discovery hole returning 308m at 0.5% Cu and 0.3g/t Au from 46m.

  More recently, Hot Chili has received a series of significant strikes from an ongoing drill program at the prospect.

  Standout intercepts included 529m at 0.41% Cu and 0.21g/t Au from 41m, 495m at 0.38% Cu and 0.10g/t Au from 3m, and 725m at 0.36% Cu and 0.07g/t Au from 18m.

  Three drill rigs continue to operate at La Verde ahead of a planned maiden resource estimate.

  A revised PFS for the broader Costa Fuego project is also on the agenda.