Hot Chili Limited expands its Costa Fuego copper-gold project with significant drilling success at La Verde, underpinning a strong Preliminary Feasibility Study and strategic water infrastructure plans.
- La Verde discovery expands high-grade copper-gold footprint
- Costa Fuego PFS delivers US$1.2 billion post-tax NPV8% and 19% IRR
- Strategic water assets with permitted seawater access in Huasco Valley
- Low elevation and existing infrastructure reduce capital intensity
- Community engagement and environmental responsibility maintained
La Verde Discovery Accelerates Costa Fuego Growth
Hot Chili Limited (ASX:HCH) is rapidly advancing its Costa Fuego copper-gold project in Chile, propelled by the La Verde porphyry discovery that continues to expand with robust drilling results. The company has outlined a 1000m by 800m by 800m mineralised footprint at La Verde, open in all directions, featuring strong continuity of high-grade mineralisation with multiple drill holes exceeding 0.7% copper equivalent (CuEq). This expanding near-surface zone offers a compelling starter pit opportunity beneath shallow gravel cover, supported by accelerated drilling with three rigs currently operational and a fourth imminent.
The La Verde discovery is on track for a maiden Mineral Resource Estimate later this year, which will feed into a revised Pre-Feasibility Study (PFS) for the broader Costa Fuego project, integrating La Verde into the existing production hub. Pending assay results for 21 drill holes are expected to further delineate the deposit’s scale and grade, with assay turnaround times improved via a second ISO-accredited laboratory.
These developments reinforce La Verde’s role as a major growth lever for Costa Fuego, complementing the existing Cortadera and Productora deposits.
Robust Preliminary Feasibility Study Underpins Project Viability
Hot Chili’s 2025 PFS for Costa Fuego delivers a post-tax Net Present Value (NPV8%) of US$1.2 billion and an Internal Rate of Return (IRR) of 19%, assuming long-term copper and gold prices of US$4.30/lb and US$2,280/oz respectively. The project forecasts a 20-year life with a primary production rate of 116,000 tonnes per annum copper equivalent over the first 14 years, positioning Costa Fuego among the top five near-term, large-scale copper developments globally.
Capital expenditure is estimated at US$1.27 billion with a payback period of 4.5 years, supported by a low open pit strip ratio of 1.5 and a competitive C1 cash cost of US$1.38 per pound of copper net of by-product credits. The project benefits from low elevation (around 740 metres above sea level), which significantly reduces capital intensity and operating costs compared to higher altitude peers.
Extensive metallurgical testwork has confirmed high recoveries to concentrate (86% copper, 54% gold) and the production of a clean copper-gold-silver-molybdenum concentrate with negligible deleterious elements, enhancing marketability. Variable throughput rates averaging 21.7 Mtpa have been validated, supporting scalable processing capacity.
Strategic Water Assets and Infrastructure Advantage
Hot Chili holds an 80% interest in the fully permitted Huasco Water business, uniquely positioned with the only active maritime licence for seawater access in the Huasco Valley, a region facing acute water constraints for mining. The company’s staged water supply strategy includes an initial seawater supply to Costa Fuego, followed by expanded desalinated water distribution across the valley, underpinning a potential multi-user water business with a post-tax NPV8% of approximately US$1.1 billion and IRR of 19%.
Infrastructure advantages extend to a port Memorandum of Understanding (MOU) executed for concentrate export, secured power lines, and proximity to existing processing facilities, all contributing to risk mitigation and streamlined permitting. The environmental footprint is minimised by leveraging existing infrastructure and avoiding groundwater use, aligning with Hot Chili’s commitment to responsible development.
Community Engagement and Social Investment
Hot Chili maintains strong social licence through over a decade of community involvement in the Huasco Valley, including mental health support programs and funding for local residences. A recent perception study highlighted 93% positive awareness, reflecting the company’s efforts to foster a modern, community-integrated mining approach. These social initiatives underpin the project’s environmental impact assessment (EIA) process and ongoing regulatory engagement, which is progressing with timelines reduced due to the project’s priority status.
Mineral Resources and Reserves Confirmed
The Costa Fuego project hosts a combined Mineral Resource of 798 million tonnes at 0.37% copper and 0.10 g/t gold (Measured and Indicated), with an additional 203 million tonnes inferred. The Ore Reserve stands at 502 million tonnes at 0.37% copper and 0.10 g/t gold, reported in accordance with JORC and NI 43-101 standards, supporting the PFS production targets. These estimates incorporate deposits at Cortadera, Productora, Alice, and San Antonio, with no material changes since the 2025 technical disclosures.
Hot Chili’s resource base places Costa Fuego among the world’s largest undeveloped copper projects not controlled by major mining companies, with a tier-one metal inventory and a favourable grade profile. The company’s low capital intensity and top quartile production capacity further distinguish Costa Fuego within the global copper development peer group.
Bottom Line?
Hot Chili’s expanding La Verde discovery and robust PFS reinforce Costa Fuego’s status as a leading near-term copper-gold development, with strategic water assets and infrastructure advantages poised to reduce project risk and capital intensity.
Questions in the middle?
- How will the upcoming maiden resource estimate for La Verde impact Costa Fuego’s overall project economics?
- What are the potential challenges in integrating La Verde into the existing Costa Fuego processing hub?
- How might evolving copper and gold price dynamics influence Hot Chili’s investment and development timeline?