Drilling at the Costa Fuego project. Source: Hot Chili
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  • Hot Chili (HCH) enters an option agreement with Antofagasta Minerals to acquire five mining rights in Chile
  • The mining rights strategically adjoin Hot Chili’s Cortadera discovery, allowing it to consolidate its Costa Fuego copper hub and nearly double Cortadera’s strike length
  • Hot Chili will complete drilling at prospective targets in the area before paying US$1.5 million (A$2.2 million) to exercise its option and acquire 100 per cent of the tenements
  • Hot Chili says the deal represents a strategic consolidation of its Cortadera discovery and has the potential to expand the resource of its broader Costa Fuego copper hub
  • HCH shares close 1.64 per cent lower at 90 cents per share

Hot Chili (HCH) has entered an option agreement with Antofagasta Minerals (AMSA) to acquire a 100 per cent interest in five mining rights in Chile.

The company said the option would allow it to consolidate its Cortadera copper-gold discovery and nearly double Cortadera’s prospective strike length from 2.3 kilometres to 4.1 kilometres.

The five mining rights adjoin the western margin of Cortadera, which Hot Chili described as the “centrepiece” of its Costa Fuego development in Chile.

AMSA’s mining rights cover 517 hectares and contain a large, outcropping mineralised porphyry, named Cuerpo 4, with similar dimensions to Cortadera’s main porphyry (Cuerpo 3), as well as other identified porphyry targets.

Based on historical drilling conducted, Cuerpo 4 is believed to have open pit resource growth potential due to the shallow nature of copper-gold-molybdenum mineralisation and near-surface copper-gold enrichment.

Hot Chili said the agreement represented a “strategic consolidation” of the Cortadera porphyry deposit area and had the potential to deliver relatively low-cost, organic resource growth to the Costa Fuego copper hub.

Under the terms of the agreement, Hot Chili, through its subsidiary, will complete 6000 metres of drilling to will test Cuerpo 4 and two other targets within AMSA’s landholding. The company also plans to drill its Cortadera North target, where previous drilling intersected wide zones of silver mineralisation.

Once drilling is complete, Hot Chili will pay US$1.5 million (A$2.2 million) to exercise its option and acquire the mining rights.

Following the exercise of the option, AMSA has the right to buy back a 55 per cent interest in the mining rights within 120 days by repaying 55 per cent of the option exercise price and paying five times the exploration expenditure incurred during the option period.

In line with the option agreement, Hot Chili has delayed its next resource update to the second half of next year so it can include the data from drilling on the AMSA mining rights.

HCH shares closed 1.64 per cent lower at 90 cents per share.

HCH by the numbers
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