ASX Announcement 

 

Tuesday 4th August 2020

AMENDED RELEASE

Further to the Company’s release to the Australian Securities Exchange, dated 31 July 2020 and titled “Positive Metallurgical Test Work”, please find an amended release which includes additional details in relation to the separate drill hole and ore drive samples included in the testwork, additional maps and sections to provide context and the removal of information that does not relate to the results being published.

 ASX Announcement 

 Friday 31st July 2020 

 Positive Results from Initial Metallurgical Test Work 

 Combined Development Confirmed 

Highlights

  • Consistent and Compatible Ore Metallurgy: Sulphide test work results confirm that all three of Hot Chili’s neighbouring projects (Cortadera, Productora and San Antonio) are compatible and can be incorporated into one combined development, now named “Costa Fuego”
  • Excellent Initial Copper Recoveries: Rougher flotation test work from Cortadera and San Antonio indicates excellent copper recoveries of 89% to +95%
  • Strong Co-Product Recoveries – Gold, silver and molybdenum rougher flotation recoveries consistent with other leading global copper developments (Rio Tinto’s Winu or SolGold’s Cascabel project)
  • Clean-Concentrate Confirmed: No deleterious elements present in rougher concentrate, confirming Costa Fuego as a clean-concentrate combined copper development
  • Low Capital Intensity Maintained: All three deposits indicate high recoveries of payable metals using salt water processing, no desalination plant required

Metallurgical testwork at Hot Chili Limited’s (ASX code HCH) (“Hot Chili” or “Company”) Cortadera and San Antonio copper projects in Chile has produced highly encouraging initial results.

Rougher sulphide flotation results indicate high copper recoveries and similar crushing/grinding characteristics, allowing all of Hot Chili’s coastal copper deposits (Cortadera, Productora and San Antonio) to be combined into one development, now named “Costa Fuego”, utilising a single conventional processing facility.

Initial rougher recoveries suggest that final copper recovery levels into a commercial grade concentrate are likely to be high. Optimised commercial concentrate grade estimation will be determined following the completion of grind size optimisation, cleaner flotation and locked-cycle test work.

These first results provide a solid foundation from which to carry out further optimisation of the metallurgical flowsheet for life-of-mine ore source supply from the Costa Fuego copper development.

Initial Sulphide Metallurgical Testwork Results

The Company has completed preliminary metallurgical testwork (mineralogy, comminution and flotation) on two composite samples of sulphide ore from Cortadera and one run-of mine (ROM) sample from San Antonio.

Testwork has been managed by Wood Plc with parameters aligned to the previous metallurgical testwork programmes undertaken during the Company’s Productora Pre-feasibility Study (PFS).

Samples at Cortadera comprised quarter drill core sample intervals across the high grade and low grade domains of the main porphyry (Cuerpo 3), and the ROM sample at San Antonio was taken from an ore drive in the existing underground mine.

Key outcomes from Sulphide Flotation testwork included:

  • Rougher flotation test work over a range of relatively coarse primary grind sizes (106 μm, 150 μm and 212 μm) indicated that the copper recovery in all samples increased as the fineness of grind increased. All grind sizes performed on tests are in-line with results from the Productora PFS and indicate similar grind size is likely.
  • Flotation recovery of copper minerals, gold, and molybdenum at Cortadera is similar to results from the Productora PFS. Flotation of silver (absent at Productora) is similar to gold.
  • Cortadera test work included a high-grade and low-grade sample.
  • The 106 μm P80 float test on the Cortadera high-grade sample recovered >95% of the copper in the rougher float. Recleaning produced a concentrate grading 28% copper with minor recovery loss.
  • The corresponding float test on the Cortadera low-grade sample recovered 89% of copper in the rougher float. Recleaning produced a concentrate grading 22% copper with minor recovery loss.
  • At San Antonio the Company tested a ROM sample from the operating underground mine. The float test on this sample recovered 95% of copper in the rougher float. Recleaning produced a concentrate grading 25% copper with minor recovery loss.
  • Preliminary recovery estimates for other payable metals at Cortadera include gold (56-60%), molybdenum (83-90%) and silver (37-59%).
  • Preliminary recovery estimates for other payable metals at San Antonio include molybdenum (88%) and silver (69%).
  • Flotation was performed using salt water in alignment with the Productora PFS.
  • Samples were assayed for multiple elements and no significant levels of concentrate impurities were identified.

Key outcomes from Comminution test work included:

  • Samples were sent for SAG Mill Comminution (SMC) and Bond Ball Mill Work Index (BWI) tests.
  • The same tests were used to design the sulphide concentrator for the Productora PFS.
  • The comminution results for the high grade and low grade domains at Cortadera are within the range of Productora values measured. It is reasonable to assume that the sulphide ore from Cortadera will have a similar processing throughput and cost as ore from Productora.

The metallurgical test work undertaken supports processing of the Cortadera and San Antonio sulphide ore using the same conventional concentrator as the Productora PFS.

Following these initial positive results, the next phase of test work will be directed towards grind size optimisation, cleaner flotation and locked-cycle test work in advance of assessing the commercial grade of copper concentrates that may be produced from Cortadera and San Antonio.

Expansion drilling, resource workstreams and scoping studies are gathering momentum and the Company looks forward to providing further updates shortly.

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

For more information please contact:

Christian Easterday      Tel: +61 8 9315 9009 

Managing Director  Email: christian@hotchili.net.au

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

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 1 below. 


Figure 1 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

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 2nd 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. 

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. Metal rounded to nearest thousand, or if less, to the nearest hundred. 

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).

Tonnage(Mt)Cu (%)Au (g/t)Mo (ppm)Copper (tonnes)Gold (ounces)Molybdenum (tonnes)Indicated150.90.150.0366233,000170,00010,000Inferred50.70.170.044486,00072,0002,000Sub-total201.60.160.0460320,000241,00012,000Indicated12.30.140.022917,0007,000400Inferred4.10.120.01205,0002,000100Sub-total16.40.130.022722,0009,000400Indicated163.20.150.0363250,000176,00010,000Inferred54.80.170.044391,00074,0002,000Total218.00.160.0458341,000250,00013,000DepositClassificationGradeContained MetalProductoraAliceCombined

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 

Section 1 Sampling Techniques and Data 

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

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