Hot Chili Limited is accelerating development at its La Verde copper-gold deposit in Chile, reporting strong drilling results and securing an additional US$15 million via an amended royalty agreement with OR Royalties. The company is progressing environmental assessments and pre-feasibility studies for the broader Costa Fuego project while maintaining a robust cash position.
- La Verde drilling expands high-grade copper-gold zones
- US$15 million added to OR Royalties agreement, doubling total funding
- Maiden Mineral Resource Estimate for La Verde expected in 2026
- Environmental Impact Assessment split for streamlined permitting
- Strong cash position of approximately A$46 million post-funding
Drilling Momentum Builds at La Verde
Hot Chili Limited (ASX:HCH) is rapidly advancing its La Verde copper-gold porphyry deposit in coastal Chile, now deploying three drill rigs to extend and infill the mineralised footprint. The latest assays include a standout 391.1-metre intersection grading 0.51% copper equivalent (CuEq) from surface in drill hole DKD044, confirming broad, continuous mineralisation and strengthening La Verde's role as a cornerstone asset within the Costa Fuego project.
Additional notable intercepts from the quarter include multiple wide zones exceeding 0.7% CuEq from shallow depths, highlighting the potential for a higher-grade starter pit. Pending assays for 21 drill holes, including significant near-surface targets, could further define this enrichment zone. To accelerate assay turnaround, Hot Chili engaged a second ISO-accredited laboratory, improving reporting times amid an increased drilling cadence.
US$15 Million Royalty Injection Enhances Funding
In a strategic funding boost, Hot Chili secured an additional US$15 million through an amended and restated investment agreement with OR Royalties Inc., doubling the total royalty consideration to US$30 million. This agreement notably adds the pre-resource La Verde asset to OR's royalty footprint, reflecting a significant endorsement from one of North America’s most rigorous royalty companies.
The expanded royalty equates to a 1.12% Net Smelter Return (NSR) across payable metals, enhancing Hot Chili’s financial flexibility as it advances Costa Fuego. The amended terms also include updated change of control buyback rights aligned with Hot Chili’s ongoing strategic partnering process, which continues to attract multiple indicative proposals and due diligence activity.
Project Development and Environmental Progress
Hot Chili has established a dedicated project development team under experienced director David Bayona to coordinate engineering, permitting, social performance, and technical studies. This integrated governance aims to streamline decision-making and maintain schedule discipline as Costa Fuego advances toward a revised Pre-Feasibility Study (PFS) and Environmental Impact Assessment (EIA) submissions.
The company has strategically split the environmental permitting into two separate EIAs: one for the Huasco Water seawater intake and distribution system, and another for the broader Costa Fuego mining development. This separation is designed to clarify regulatory processes and reduce duplication, with baseline studies and community engagement well underway.
Cash Position and Operational Overview
Following the closure of the OR royalty deal, Hot Chili holds approximately A$46 million in cash, with no debt. Quarterly operating expenditure included A$0.8 million in staff costs and A$1.6 million in administration expenses, while investing activities focused on A$7.3 million in drilling and development studies at La Verde.
Health and safety remain a priority, with two lost time injuries reported during the quarter amid ongoing field operations. The company continues its community support initiatives in the Huasco Valley, recently receiving a 93% positive community perception score and providing assistance following severe weather events.
Resource and Reserve Status
La Verde’s maiden Mineral Resource Estimate is expected later this year, with integration into the Costa Fuego PFS anticipated to be transformative for the project’s scale and economics. Costa Fuego currently ranks among the world’s top five independent copper developments outside major mining company control. The combined Mineral Resource and Ore Reserve statements underpin a substantial copper-gold portfolio, with ongoing drilling and studies aimed at upgrading resource confidence and optimising mine plans.
Bottom Line?
Hot Chili’s expanded drilling and royalty funding at La Verde position Costa Fuego for meaningful advancement, but pending assay results and regulatory approvals remain key milestones to watch.
Questions in the middle?
- How will pending assay results influence La Verde’s maiden Mineral Resource Estimate and project economics?
- What impact will the split Environmental Impact Assessment have on permitting timelines and regulatory clarity?
- How might ongoing strategic partnering discussions shape Hot Chili’s funding and project delivery pathways?