Hot Chili (ASX:HCH) provided an update on its Costa Fuego copper-gold project in Chile’s north, highlighting recent drilling success, ongoing feasibility work, and progress on a water strategy that management described as a potential value lever alongside the mine development itself.
Project status and market backdrop
Managing Director Christian Easterday said the company has advanced Costa Fuego from discovery at the end of the last copper cycle to a project “under feasibility,” describing it as one of the largest independent copper development projects globally and the only ASX-listed representative in the “top five” independent global copper developments by scale, as characterized in the presentation.
He also said Hot Chili’s stock had quadrupled over the past five to six months. In addition, he stated the company completed a A$40 million institutional placement across Canada and Australia, which he framed as part of building a “beachhead” into North American capital markets ahead of planned project financing over the next couple of years.
Three priorities: discovery, feasibility, and water
Easterday outlined three key areas he said would drive the next phase of the story:
- A new discovery that could add to the resource base and increase early-mine value.
- Continued feasibility work on Costa Fuego, with the company aiming not to slip timelines toward financing and a final investment decision.
- Advancement of a water strategy, including outsourcing infrastructure and exploring a broader regional desalinated water supply opportunity.
Permitting, location, and timeline
Easterday emphasized Costa Fuego’s location and permitting progress. He said the company’s site sits at roughly 700 meters elevation, contrasting it with high-altitude Andean projects. He also said Hot Chili has accumulated around 12 years of permitting work and expects to submit an environmental impact assessment (EIA) for stage one toward the end of this year. He described that submission as starting the “time clock” toward delivery of a definitive feasibility study in 2028.
He referenced BHP’s recent news about the Vicuña project and said it was meaningful for Hot Chili because it supported, in his view, the concept of outsourcing infrastructure—specifically around water supply solutions in the region.
La Verde discovery: scale potential and near-term catalysts
A central focus of the update was the La Verde discovery within the broader Costa Fuego hub. Easterday described La Verde as Hot Chili’s “third bulk tonnage major discovery” and said it is already about 1 kilometer long and 700 meters wide, open in all directions. He noted the discovery built momentum last year with a reverse circulation (RC) drill program where “most of the drill holes were ending in mineralization,” and said a subsequent phase 2 diamond drilling program is beginning to outline open-pit potential.
He said the company plans to accelerate drilling, with a second rig to be deployed and a potential third rig later, as Hot Chili works toward a first resource estimate and integration of La Verde into a restated pre-feasibility study targeted for the end of this year. He also said additional diamond drill results were pending, and noted the company had just announced results at depth that supported the idea of an expanding higher-grade core.
According to Easterday, the shallow, higher-grade mineralization being intersected in diamond drilling could significantly improve early project economics. He said La Verde could add roughly five years of production to the front end of the Costa Fuego mine plan and potentially provide first-year feed that is “30%–40% higher in revenue” than the current front end, which he said would have a meaningful impact on payback and financial metrics.
He also described La Verde as part of a broader cluster of similar anomalies, including two that are gravel-covered, which the company intends to test in coming months for additional scale upside.
Water strategy and regional desalination opportunity
Easterday called water a “hidden” strategic asset, emphasizing that the Atacama region is one of the most water-scarce areas in the world. He said regulatory changes mean water cannot be taken from the ground, and that desalination has become the primary solution for much of Chile’s copper sector.
He said Hot Chili has studied a pre-feasibility approach to seawater supply and is looking to outsource water infrastructure—an approach he said allows the company to remove infrastructure spending from upfront capital, with third parties financing the assets and Hot Chili paying via operating costs under supply agreements. He described this as a way to further reduce capital requirements for Costa Fuego.
Beyond the mine’s own needs, Easterday outlined what he described as a larger opportunity to supply desalinated water to a broader regional “catchment” of off-takers, supporting what he called the largest cluster of undeveloped copper projects in the world. He said an asset-level strategic partnering process for the water project is intended to create a pathway to monetization that could support development financing for Costa Fuego.
Looking ahead, Easterday said the coming months would include a steady flow of La Verde drill results, progress toward a first resource estimate, and an integrated revised pre-feasibility study, alongside developments on the corporate front.
About Hot Chili (ASX:HCH)
Hot Chili Limited operates as a mineral exploration company in Australia and Chile. The company explores for copper, gold, and molybdenum, as well as silver deposits. Its flagship property is the Cortadera Copper-Gold Project located along the Chilean coastal range, Chile. The company also holds option agreement to acquire 100% interest in the Cometa project in Chile. In addition, it is involved in the supply of both sea water and desalinated water for communities, agriculture, and mining developments in the Huasco Valley region of Chile.
