Hot Chili’s A$14M Rights Issue Hinges on Partnering Success and Drilling Outcomes

• A$14 million non-renounceable rights issue at A$0.60 per share
• Funds to support strategic partnering and phase-two diamond drilling at La Verde
• Recent drilling confirms extensive copper-gold mineralisation at La Verde
• Rights issue is underwritten and managed by Veritas Securities Limited
• Partnering process ongoing with no certainty of binding agreements

Hot Chili’s Strategic Capital Raise

Hot Chili Limited (ASX, HCH) has announced a significant capital raise via a A$14 million non-renounceable pro rata rights issue priced at A$0.60 per share. This move aims to bolster the company’s balance sheet to fund near-term strategic priorities, including advancing its copper-gold projects in Chile’s prolific Atacama region.

The rights issue offers eligible shareholders the opportunity to acquire two new shares for every thirteen held, providing full exposure to Hot Chili’s ongoing development activities. The offer is underwritten and managed by Veritas Securities Limited, underscoring the company’s commitment to securing the necessary funding to progress its pipeline.

Advancing La Verde and Strategic Partnering

Proceeds from the rights issue will primarily support the completion of Hot Chili’s asset-level strategic partnering process and the commencement of phase-two diamond drilling at the La Verde copper-gold discovery, part of the broader Costa Fuego Project. The partnering process, facilitated by BMO Capital Markets, seeks to bring on board financial and operational partners to assist with project funding and development.

While the partnering discussions remain ongoing with no guarantee of binding agreements, the company is optimistic about unlocking key catalysts that could accelerate project advancement. This strategic approach reflects a broader trend in the mining sector where collaboration and joint ventures are increasingly pivotal to de-risking and funding large-scale developments.

Promising Drilling Results at La Verde

Hot Chili’s recent phase-one reverse circulation drilling campaign at La Verde has delineated an extensive footprint of copper-gold mineralisation, extending over 1,000 meters laterally and up to 400 meters vertically. Notably, multiple higher-grade zones have been identified near surface, with standout intercepts including copper grades above 0.5% and gold grades reaching 0.3 grams per tonne over significant widths.

These encouraging results have set the stage for the upcoming diamond drilling phase, which is expected to facilitate the maiden mineral resource estimate for La Verde. The company anticipates that this resource will provide a foundation for further resource growth and support the front-end engineering and design of the Costa Fuego processing hub.

Market Position and Next Steps

Managing Director Christian Easterday highlighted the importance of the rights issue in strengthening Hot Chili’s financial position amid volatile commodity markets. The funding will enable the company to maintain momentum across multiple fronts, including exploration, resource definition, and strategic partnerships.

Shareholders have until late August 2025 to participate in the entitlement offer, with new shares expected to commence trading in early September. Investors will be closely watching the uptake of the rights issue and subsequent updates on the partnering process and drilling results, which will be critical in shaping Hot Chili’s near-term valuation and development trajectory.

Bottom Line?

Hot Chili’s capital raise sets the stage for pivotal project milestones, but the success of its partnering efforts remains a key watchpoint.

Questions in the middle?

• Will Hot Chili secure binding agreements from its ongoing strategic partnering process?
• How will phase-two diamond drilling results at La Verde influence the upcoming resource estimate?
• What impact will the rights issue subscription level have on the company’s share price and market confidence?