Peter Strachan | Stockhead TV

Peter Strachan | Stockhead TV

Barry FitzGerald STOCKHEAD

STOCKHEAD | January 13, 2023

Two drill rigs are currently drilling Cortadera’s potential fourth porphyry. Pic: Getty Images

An initial 10,000m drilling program will test four porphyry targets as well as three other targets on the recently optioned AMSA landholding.

The company has started the new year with a bang as one diamond drill rig – operating on a double shift basis – and one reverse circulation rig are back in operation, testing Cortadera’s potential to host a much larger copper porphyry cluster than originally defined.

Hot Chili (ASX:HCH) has more than doubled the strike length of the discovery from 2.3km to 5.2km, increasing the near term material resource growth potential.

Both drill rigs are busy drilling Cortadera’s fourth porphyry, where previous historical drilling intersected shallow copper-gold porphyry mineralisation at 128m grading 0.5% copper equivalent (0.4% copper and 0.1g/t gold) from 28m.

Key growth activities on track for delivery this year

HCH says it is well funded to complete its planned drilling and deliver the next set of key growth and development milestones for Costa Fuego this year, which include a Preliminary Economic Assessment (PEA) in the first half of this year and a resource upgrade in the second half.

It hopes to potentially up-scale Costa Fuego’s future annual metal production rates, currently being studied at up to 100,000t copper and up to 70,000oz gold for a +20-year life of mine.

Hot Chili intends to deliver Costa Fuego’s Pre-feasibility Study (PFS) by 2024 and remains on-track as one of only a few near-term production projects in the world capable of producing +10,000tpa copper in the next five years.

STOCKHEAD | Dec 07, 2022

Hot Chili has taken another bite of the cherry, expanding the footprint of its Cortadera copper-gold play. Pic via Getty Images.

The Chilean Naval Authority has granted copper developer Hot Chili access to the physical land of its Maritime Concession for extraction of sea water just 60km from the proposed location of Costa Fuego’s central processing facilities in Chile.

It’s another feather in the cap for the company, whose Costa Fuego project is slated to be a green copper development using sea water – with no ground water or desalination plant required.

Hot Chili (ASX:HCH) says the approval of its maritime application (water extraction right and associated land access rights) shows the Government’s support for the development of a new large-scale copper hub for the Vallenar region of Chile.

100% run on renewables too

This news adds another layer to the project’s environmental credentials at the Costa Fuego project, with Hot Chili able to operate off a mix of nearby solar, wind and hydroelectric generators, and having a clean (arsenic-free) concentrate.

Plus, the company recently received approval from Chile’s Central Authority Electrical Regulator to connect to the Maitencillo substation 17km from the centre of the Costa Fuego development.

It opens access for Hot Chili to the national electricity grid, with the company able to negotiate with the multiple renewable energy providers in the South American nation.

A process to select one or more electrical providers is expected to begin in the fourth quarter of 2022.

STOCKHEAD | Nov 30, 2022

Hot Chili has taken another bite of the cherry, expanding the footprint of its Cortadera copper-gold play. Pic via Getty Images.

Mere days after securing a second major porphyry, Hot Chili has further expanded the footprint of its Cortadera copper-gold play by acquiring new mining rights.

The new rights – secured at low-cost through a government-run public auction – cover the western extension of the discovery and increases its prospective strike length to 5.2km, an increase from the 4.1km following the Cuerpo 4 acquisition.

Importantly for Hot Chili (ASX:HCH), the seven new mining rights covering 757 hectares host four large porphyry targets that have the potential to materially increase the scale of the broader Costa Fuego copper-gold development.

It also consolidates the western extension of Cortadera, allowing the company to test a potentially much larger porphyry cluster.

Extending two major trends

Hot Chili’s new ground extends the prospective strike lengths of two mineralised trends.

The Las Canas trend, which includes three of the new porphyry targets and the Cuerpo 4 porphyry, has been extended by more than 1.8km.

Meanwhile, the key Cortadera trend has been extended by 1.1km with the addition of a new porphyry target that is directly along strike from Cortadera on the Serrano fault, an important mineralising fault corridor connecting the Cortadera and Productora copper-gold deposits.

STOCKHEAD | Nov 28, 2022

Hot Chili is set to grow its Cortadera copper-gold project over a large mineralised porphyry outcropping. Pic via Getty Images.

Hot Chili has executed an option agreement to extend its Cortadera copper-gold project over a large outcropping of mineralised porphyry similar in size to the main Cuerpo 3 porphyry.

The consolidation of Cortadera not only presents the opportunity to add significant mineralisation, it also about doubles the prospective strike length from 2.3km to 4.1km.

Given that Cuerpo 3 makes up a significant portion of the Cortadera mineralisation, which currently consists of a high confidence Indicated Resource of 471Mt grading 0.46% copper equivalent (CuEq) and an Inferred Resource of 108Mt at 0.35% CuEq, this could be hugely beneficial for the company.

Drilling of the new Cuerpo 4 porphyry by the vendor, Antofagasta Minerals (AMSA), has already confirmed several significant shallow drilling intersections including a thick 128m interval at 0.5% CuEq from a down-hole depth of 28m with a higher grade zone of 16m at 1.3% CuEq (1% copper and 0.5 grams per tonne gold) from 28m.

Hot Chili (ASX:HCH) intends to start a 6,000m drill program over the 700m by 300m Cuerpo 4 porphyry as soon as possible to assess a potential material resource addition to the broader Costa Fuego development.

New ground

The five mining rights acquired from AMSA cover 517 hectares and contain other identified porphyry targets besides Cuerpo 4.

Four of the five holes drilled by AMSA in 2005 returned wide intersections of mineralisation with their shallow nature highlighting open pit resource growth potential.

Hot Chili’s planned first pass program of both diamond and reverse circulation drilling will test Cuerpo 4 and two other targets within the new mining rights.

Drilling is also planned across the existing Cortadera North target, where earlier exploration drilling targeting a large surface molybdenum anomaly in 2020 intersected wide zones of silver mineralisation.

While this work vectored towards Cuerpo 4, the company had then ceased all exploration there until an agreement could be entered into with AMSA.

These rights are expected to provide relatively low cost and highly accretive resource growth potential.

Worth the wait

The acquisition has led the company to revise the release date for its next resource update to the second half of 2023 rather than late 2022 to include results from the proposed drilling.

Additionally, the combined Costa Fuego Pre-Feasibility Study – targeting annual production rates of up to 100,000t copper and up to 70,000oz of gold over a mine life of more than 20 years – will be paused until the company can assess the impact of resource growth potential at Cortadera.

This ensures that future expenditure relating to the PFS can be optimised for infrastructure location and a potentially larger scale copper operation.

STOCKHEAD | Oct 31, 2022

Pic: Hot Chili has gone back to basics to win a huge uptick in the value of its Costa Fuego copper development. Pic via Getty Images.

Here’s how to make an already attractive project even more lucrative: take some previously unsampled intervals and get high-grade results out of them.

Not exactly easy in real life but that’s exactly what Hot Chili (ASX:HCH) has managed at its Costa Fuego copper development in Chile with previously unsampled diamond core at the Productora and Alice pits yielding higher than expected copper grades.

And the results are encouraging to say the least – especially coming from a development that is no stranger to multi hundred metre copper-gold intersections.

Over at the Productora central pit area, the core returned an intersection of 244m at 0.8% copper equivalent (0.7% copper and 0.2g/t gold) from a down-hole depth of just 23m and includes a higher-grade zone of 71m at 1% CuEQ (0.8% copper and 0.2g/t gold).

The Alice satellite pit area yield a 152m zone at 0.6% CuEqu (0.6% copper and 0.1g/t gold) from 42m including 39m at 1.1% CuEq (1% copper and 0.1g/t gold) and a separate 23m interval at 0.9% CuEq from 226m to the end of hole.

This is on top of final drill results from the Valentina deposit returning a 6m interval at 1.3% copper from 10m down-hole while first ever drilling at Santiago Z did not intersect significant widths of copper but returned wide zones of silver which may indicate a potential distal response to copper porphyry mineralisation.

Drill results

The results from the first holes at the Productora and Alice pits provide further high grade growth ahead of a planned resource upgrade for Costa Fuego.

Both have continued to demonstrate grade upside with infill drilling, providing positive reconciliation ahead of any future mining activities.

Entire hole results from the remaining two diamond holes at Productora are expected to be received in the coming weeks.

Valentina and its neighbouring San Antonio satellite copper deposit are immediately to the east of the company-making Cortadera deposit.

Of the four holes drilled in the expanded program at Valentina, two recorded significant intersections while one hit historical underground workings.

A regulatory clearing application has been submitted to facilitate follow-up drilling at Valentina, which will expand resource drill definition across this potential high-impact future addition to Costa Fuego that could provide early, high-grade copper feed.

The company is also updating its Santiago Z geological model using RC chip logging and downhole multi-element geochemistry for use in any additional phases of exploration.

Further exploration is expected to focus on the southern extent of the Santiago Z porphyry footprint in advance of any planned second-pass clearing and drilling activities.

This article was developed in collaboration with Hot Chili, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

STOCKHEAD | Sep 08, 2022

Pic: Via Getty Images

Hot Chili is all but certain to be upgrading resources at its Costa Fuego copper development after reporting new copper-silver intersections at the high-grade San Antonio deposit.

Resource upgrade drilling results such as 21m grading 1.6% copper equivalent (CuEq) from 74m down-hole, 13m at 1.3% CuEq from 133m and 7m at 1.6% CuEq from 11m are likely to see most if not all of the current Inferred resource of 4.2Mt grading 1.2% CuEq upgraded to the higher confidence Indicated category.

This will also allow Hot Chili (ASX:HCH) to include San Antonio – one of the satellite deposits at the Costa Fuego copper hub in Chile – in its mine plan.

Final drill results are also pending from the Valentina satellite deposit, which has proven to be an even spicier meal with initial assays returning results such as 3m at 12.1% CuEq.

A regulatory application for follow-up drilling at Valentina is being prepared while drilling is currently underway at the Santiago Z porphyry exploration target where five holes have been completed.

San Antonio drilling

The company completed 13 reverse circulation drill holes across the San Antonio resource window to test extensional potential as well as infill areas of lower geological confidence.

Several of these holes returned higher grades than estimated in the current resource estimate while a further three diamond holes were drilled for metallurgical test work purposes.

San Antonio’s shallow, high-grade nature makes it amenable for open pit mining with relatively low strip ratios.

Along with Valentina, it is expected to provide high grade, front-end ore which could have a positive material impact on the payback period and overall economics for the broader Costa Fuego development.

Costa Fuego boasts more than 3Mt of copper metal across the major Productora and Cortedera deposits, with measured indicated resources of 725Mt grading 0.47% CuEq, containing 2.75Mt Cu, 2.56Moz Au, 10.49Moz Ag, and 67.4kt Mo and an inferred resource of 202Mt grading 0.36% CuEq containing 731kt Cu, 605koz Au, 2.03Moz Ag and 13.4kt Mo.

STOCKHEAD | Aug 18, 2022

Pic: Getty Images

Hot Chili has uncovered further evidence that it has shallow, high-grade material that can provide early feed to a development at its Costa Fuego copper hub in Chile.

Drilling at the Valentina satellite deposit returned a very rich 3m intersection grading 12.1% copper equivalent (11.8% copper and 52.6g/t silver) from a down-hole depth of just 29m within a broader 12m zone at 4.6% copper equivalent from 25m.

Adding further interest for Hot Chili (ASX:HCH), the mineralisation in VALMET0002 is dominantly sulphide and amenable to sulphide flotation, which contributes further to the deposit’s potential to contribute to early sulphide cash flow generation.

With the hole also confirming a 120m extension of high-grade, copper-silver mineralisation to the south of the historical Valentina underground mine, mineralisation at the deposit is now defined over about 300m in strike while remaining open at depth and along strike.

Along with the San Antonio deposit, Valentina is looking increasingly likely to provide high-grade ore which could have a positive material impact on the payback period and overall project economics.

Assays are pending for a further six drill holes at Valentina and 16 holes at San Antonio.

Drill results

Hot Chili has received assays for 11 of the 17 Phase 2 drill holes. Of these, four holes returned significant drill intersections while three intersected the mineralised structure (at 0.2% to 0.5% copper).

This drilling was focused on proving the continuity of the mineralised trend along strike and at depth below the historical shallow underground mine.

High-grade hits received to date – including VALMET0002 – are located on the southern extent of an area previously masked at-surface by a shallow horizon of Atacama gravels.