Hot Chili Limited (ASX: HCH) (TSXV: HCH) (OTCQX: HHLKF) (“Hot Chili” or “Company”) is pleased to report strong visual copper results from drilling at the high grade Valentina deposit, part of the Company’s Costa Fuego, coastal range, copper-gold hub in Chile.
Upon completion of drilling at Valentina and San Antonio, further drilling is planned to test several large growth targets including Santiago Z and extensional porphyry targets along strike from Cortadera.
Pre-feasibility studies (PFS) have been expanded to capture additional metallurgical testwork opportunities across all deposits at Costa Fuego and preliminary mine planning is being extended to allow the incorporation of new resource growth from drilling in 2022.
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Cortadera Porphyry Footprint Continues to Expand· Hot Chili has succeeded in securing several new prospective mining rights, adjacent to mining rights in the recently announced transaction with Antofagasta Minerals S.A. (AMSA) |
** Copper Equivalent (CuEq) reported for the drillhole intersections were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. The entirety of the intersection is assumed as fresh. The recovery and copper equivalent formula for Cortadera – Recoveries of 83% Cu, 56% Au, 83% Mo and 37% Ag. CuEq(%) = Cu(%) + 0.56 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t)
Hot Chili Limited (ASX: HCH) (TSXV:HCH) (OTCQX: HHLKF) ("Hot Chili" or "Company") is pleased to announcefurther consolidation of the Cortadera copper-gold discovery in Chile.
The Company has succeeded in securing several new prospective mining rights at a recently held, government-run, public auction for the Huasco region of Chile. The new mining rights are located alongside mining rights of the recently announced (25 th November 2022) transaction with Antofagasta Minerals S.A. (AMSA).
Together, these new landholdings consolidate the western extension of Cortadera and allow Hot Chili to test a potentially much larger copper porphyry cluster.
Hot Chili has now secured four new large porphyry targets adjacent to the existing Cortadera resource (Cuerpo 1, 2 and 3), and added significant prospective strike length across two mineralised trends:
· Las Canas trend (+1.8km, N-S) - Three large porphyry targets including the Cuerpo 4 porphyry target (700m in strike length by 300m in width and drill confirmed, see announcement dated 25 th November 2022 for details of AMSA transaction)
· Cortadera trend (+1.1km, NW-SE) – One large porphyry target located directly along-strike from Cortadera on the Serrano fault, an important mineralising fault corridor connecting the Cortadera and Productora copper-gold deposits
The new landholding successfully acquired at auction contains the Cortadera trend extension and comprises seven mining rights covering 757 hectares. Three mining rights (Falla Maipo 2, 3, 4) were acquired for US$110,000 and the remaining four mining rights (CF 6, 7, 8, 9) were successfully awarded following forfeiture of overlapping third party mining rights.
Figures on the following pages outline the location of the new mining rights in relation to Cortadera.
Drilling across the western extension to Cortadera is planned to commence as soon as possible.
This recent strategic consolidation of the Cortadera porphyry deposit area has the potential to deliver another significant leg of resource growth to the Costa Fuego copper hub.
Further updates and announcements are expected in the lead-up to drill commencement.
* Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery).
The Metal Prices applied in the CuEq calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. The recovery and copper equivalent formula for each deposit is:
Cortadera and San Antonio – Weighted recoveries of 82% Cu, 55% Au, 82% Mo and 37% Ag.
CuEq(%) = Cu(%) + 0.56 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t)
Productora – Weighted recoveries of 84% Cu, 47% Au, 47% Mo and 0% Ag (not reported)
CuEq(%) = Cu(%) + 0.46 x Au(g/t) + 0.00026 x Mo(ppm)
Costa Fuego – Weighted recoveries of 83% Cu, 53% Au, 69% Mo and 23% Ag
CuEq(%) = Cu(%) + 0.52 x Au(g/t) + 0.00039 x Mo(ppm) + 0.0027 x Ag(g/t)
** Reported on a 100% Basis - combining Mineral Resource Estimates for the Cortadera, Productora and San Antonio deposits. Figures are rounded, reported to appropriate significant figures, and reported in accordance with the JORC Code, CIM and NI 43-101. Metal rounded to nearest thousand, or if less, to the nearest hundred.
Total Resource reported at +0.21% CuEq for open pit and +0.30% CuEq for underground.
Refer to ASX Announcement "Hot Chili Delivers Next Level of Growth" (31st March 2022) for JORC Code Table 1 information related to the Costa Fuego JORC-compliant Mineral Resource Estimate (MRE) by Competent Person Elizabeth Haren, constituting the MREs of Cortadera, Productora and San Antonio (which combine to form Costa Fuego).
* Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery).
The Metal Prices applied in the CuEq calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. The recovery and copper equivalent formula for each deposit is:
Cortadera and San Antonio – Weighted recoveries of 82% Cu, 55% Au, 82% Mo and 37% Ag.
CuEq(%) = Cu(%) + 0.56 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t)
Productora – Weighted recoveries of 84% Cu, 47% Au, 47% Mo and 0% Ag (not reported)
CuEq(%) = Cu(%) + 0.46 x Au(g/t) + 0.00026 x Mo(ppm)
Costa Fuego – Weighted recoveries of 83% Cu, 53% Au, 69% Mo and 23% Ag
CuEq(%) = Cu(%) + 0.52 x Au(g/t) + 0.00039 x Mo(ppm) + 0.0027 x Ag(g/t)
** Reported on a 100% Basis - combining Mineral Resource Estimates for the Cortadera, Productora and San Antonio deposits. Figures are rounded, reported to appropriate significant figures, and reported in accordance with the JORC Code, CIM and NI 43-101. Metal rounded to nearest thousand, or if less, to the nearest hundred.
Total Resource reported at +0.21% CuEq for open pit and +0.30% CuEq for underground.
** Note: Silver (Ag) is only present within the Cortadera Mineral Resource estimate
Competent Person's Statement- Exploration Results
Exploration information in this Announcement is based upon work compiled by Mr Christian Easterday, the Managing Director and a full-time employee of Hot Chili Limited whom is a Member of the Australasian Institute of Geoscientists (AIG). Mr Easterday has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a ‘Competent Person' as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (JORC Code). Mr Easterday consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.
Competent Person's Statement- Costa Fuego Mineral Resources
The information in this report that relates to Mineral Resources for Cortadera, Productora and San Antonio which constitute the combined Costa Fuego Project is based on information compiled by Ms Elizabeth Haren, a Competent Person who is a Member and Chartered Professional of The Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Ms Haren is a full-time employee of Haren Consulting Pty Ltd and an independent consultant to Hot Chili. Ms Haren has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Ms Haren consents to the inclusion in the report of the matters based on her information in the form and context in which it appears. For further information on the Costa Fuego Project, refer to the technical report titled "Resource Report for the Costa Fuego Technical Report", dated December 13, 2021, which is available for review under Hot Chili's profile at www.sedar.com.
Reporting of Copper Equivalent
Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery). The Metal Prices applied in the CuEq calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. The recovery and copper equivalent formula for each deposit is:
Cortadera and San Antonio – Weighted recoveries of 82% Cu, 55% Au, 82% Mo and 37% Ag.
CuEq(%) = Cu(%) + 0.56 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t)
Productora – Weighted recoveries of 84% Cu, 47% Au, 47% Mo and 0% Ag (not reported)
CuEq(%) = Cu(%) + 0.46 x Au(g/t) + 0.00026 x Mo(ppm)
Costa Fuego – Weighted recoveries of 83% Cu, 53% Au, 69% Mo and 23% Ag
CuEq(%) = Cu(%) + 0.52 x Au(g/t) + 0.00039 x Mo(ppm) + 0.0027 x Ag(g/t)
About Hot Chili
Hot Chili Limited is a mineral exploration company with assets in Chile. The Company's flagship project, Costa Fuego, is the consolidation into a hub of the Cortadera porphyry copper-gold discovery and the Productora copper-gold deposit, set 14 km apart in an excellent location – low altitude, coastal range of Chile, infrastructure rich, low capital intensity. The Costa Fuego landholdings, contains an Indicated Resource of 725Mt grading 0.47% CuEq (copper equivalent), containing 2.8 Mt Cu, 2.6 Moz Au, 10.4 Moz Ag, and 67 kt Mo and an Inferred Resource of 202 Mt grading 0.36% CuEq containing 0.6Mt Cu, 0.4 Moz Au, 2.0 Moz Ag and 13 kt Mo, at a cut-off grade of +0.21% CuEq for open pit and +0.30% CuEq for underground. (Refer to ASX Announcement "Hot Chili Delivers Next Level of Growth" (31st March 2022) and Technical Report NI 43-101 titled "Resource Report for the Costa Fuego Copper Project Located in Atacama, Chile", dated 13 May 2022). The Company is working to advance its Costa Fuego Project through a preliminary feasibility study (followed by a full FS and DTM), and test several high-priority exploration targets.
Certain statements contained in this news release, including information as to the future financial or operating performance of Hot Chili and its projects may include statements that are "forward�looking statements" which may include, amongst other things, statements regarding targets, estimates and assumptions in respect of mineral reserves and mineral resources and anticipated grades and recovery rates, production and prices, recovery costs and results, and capital expenditures and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions.These forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Hot Chili, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward�looking statements.
Hot Chili disclaims any intent or obligation to update publicly or release any revisions to any forward�looking statements, whether as a result of new information, future events, circumstances or results or otherwise after the date of this news release or to reflect the occurrence of unanticipated events, other than as may be required by law. The words "believe", "expect", "anticipate", "indicate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward�looking statements.
All forward�looking statements made in this news release are qualified by the foregoing cautionary statements. Investors are cautioned that forward�looking statements are not a guarantee of future performance and accordingly investors are cautioned not to put undue reliance on forward�looking statements due to the inherent uncertainty therein.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Investor Relations
Graham Farrell
+1 416-842-9003
Graham.Farrell@harbor-access.com
Investor Relations
Jonathan Paterson
+1 475-477-9401
Jonathan.Paterson@harbor-access.com
Managing Director
Christian Easterday
https://www.hotchili.net.au/investors/
Copyright (c) 2022 TheNewswire - All rights reserved.
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Fourth Porphyry Added to Cortadera· Hot Chili has executed an Option Agreement with Antofagasta Minerals S.A. (AMSA) to acquire a 100% interest in five highly prospective mining rights, containing the potential western extension of Hot Chili's Cortadera copper-gold discovery , the centrepiece of the Company's low-altitude, Costa Fuego senior copper development in Chile |
* Drilling data and associated drilling intersections not previously publicly reported, AMSA internal report, see JORC Code Table 1 in this announcement for further details)
** Copper Equivalent (CuEq) reported for the drillhole intersections were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. The entirety of the intersection is assumed as fresh. The recovery and copper equivalent formula for Cortadera – Recoveries of 83% Cu, 56% Au, 83% Mo and 37% Ag. CuEq(%) = Cu(%) + 0.56 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t)
Hot Chili Limited (ASX: HCH) (TSXV:HCH) (OTCQX: HHLKF) ("Hot Chili" or "Company") is pleased to provide details of a material transaction with Chilean copper major Antofagasta Minerals S.A. (AMSA).
Hot Chili has executed an Option Agreement enabling Hot Chili to acquire a 100% interest in AMSA's mining rights adjoining the western margin of Hot Chili's Cortadera copper-gold porphyry discovery, the centre-piece of the Company's Costa Fuego senior copper development in Chile.
This strategic option agreement consolidates the highly prospective AMSA mining rights, containing near-surface drill intersections of copper-gold porphyry mineralisation, with Hot Chili's contiguous Cortadera project.
Cortadera has been the growth engine for Hot Chili since the Company executed a transaction to acquire the project in 2019.
Cortadera's current Indicated resource of 471Mt grading 0.46% CuEq for 1.7Mt copper and 1.8Moz gold and Inferred resource of 108Mt grading 0.35% CuEq for an additional 0.3Mt copper and 0.3Moz gold (ASX announcement dated 31 st March 2022) is contained within three porphyry centres, trending NW-SE, over a strike extent of 2.3km.
The option enables the consolidation of Cortadera and near doubles the prospective strike length of the discovery, increasing the near term, material resource growth potential for Hot Chili.
AMSA's five mining rights cover 517 hectares and contain a large outcropping mineralised porphyry (Cuerpo 4 - 700m in strike length by 300m in width) with similar dimensions to Cortadera's main porphyry (Cuerpo 3) as well as other identified porphyry targets, trending N-S, over a prospective strike extent of approximately 1.8km.
In 2005, AMSA intersected significant copper-gold-molybdenum mineralisation at Cuerpo 4, with five shallow Reverse Circulation (RC) drill holes totalling 1,056m (Drilling data and associated drilling intersections not previously publicly reported, AMSA internal report, see JORC Code Table 1 in this announcement for further details).
Four of AMSA's five drill holes recorded wide intersections of mineralisation, including COR-03 which recorded 128m grading 0.5% CuEq (0.4% Cu & 0.1g/t Au) from 28m downhole depth, including 16m grading 1.3% CuEq (1% Cu & 0.5g/t Au) from 28m.
The historical drilling across Cuerpo 4 clearly demonstrates open pit resource growth potential, given the shallow nature of copper-gold-molybdenum mineralisation, and near-surface, copper-gold enrichment.
Next Steps – Rapid Resource Definition
A first-pass drilling programme comprising 16 holes for 6,000m is expected to start as soon as possible.
Drilling will test Cuerpo 4 and two other targets within AMSA's landholding using RC and Diamond (DD) drilling. Hot Chili and AMSA have agreed on the detail and staging of the planned drilling programme after a collaborative and detailed geological review by both companies' technical teams.
Drilling is also planned across Hot Chili's Cortadera North target, where earlier exploration drilling targeting a large surface molybdenum anomaly in 2020 intersected wide zones of silver mineralisation. This work vectored towards a sizeable copper-gold porphyry target (Cuerpo 4) on AMSA's adjacent mining right.
Hot Chili then ceased all exploration activities at Cortadera North until an agreement could be entered into with AMSA to enable Hot Chili to acquire the adjacent landholding.
Revision to Costa Fuego Growth and Development Timetable
The transaction provides the next step in Hot Chili's long term growth strategy. The AMSA mining rights provide relatively low cost and highly accretive resource growth potential due to their proximity to the Company's Cortadera open pit resource base.
Hot Chili's next resource update, which was proposed to be delivered in late 2022, is now expected to be finalised in H2 2023 to include the proposed drilling on the AMSA mining rights.
The combined Pre-feasibility Study (PFS) for Costa Fuego, studying targeted annual production rates of up to 100kt Cu and up to 70koz Au for a +20 year life of mine, will be paused until the Company can assess the impact of resource growth potential at Cortadera. The Company's decision to pivot the PFS ensures that future expenditure relating to the PFS can be optimised for infrastructure location and a potentially larger scale copper operation.
Only critical PFS workstreams will be continued to secure long-lead time items (environmental and social) and key value additions (metallurgical) to ensure Costa Fuego remains on-track to potentially be delivered into production in 2028.
A Preliminary Economic Assessment( PEA) of the combined Costa Fuego project at the current 20Mtpa sulphide concentrator study scale is now planned to be delivered in H1 2023.
Hot Chili aims to ensure that Costa Fuego's "clean and green" attributes, including low elevation/coastal location, proximity to existing infrastructure, access to renewable power, use of seawater for processing and a central processing strategy, can be leveraged with this consolidation and growth opportunity.
Costa Fuego remains one of a few front-runner, large copper development projects in the world that can be advanced to production in a timely manner due to Hot Chili's consolidation, development and permitting efforts over the last decade.
Recent positive developments in Chile's constitutional process and taxation review have reaffirmed Chile's stable and attractive standing as a top global mining investment jurisdiction.
Option Agreement to Acquire 100% Interest in AMSA's Cortadera Mining Rights
Under an Option Agreement (Option) between Frontera SpA ("Frontera" - 100% subsidiary of Hot Chili) and Antofagasta Minerals SA (AMSA), Frontera has the option to acquire a 100% interest in the AMSA mining rights adjoining Cortadera within a two-year period on the following terms:
· Completion of 6,000m of drilling of any type, and
· Upon completion of the 6,000m drill commitment, Payment of a US$1.5 million Option exercise price to acquire the AMSA's mining rights, and
· Following exercise of the Option, AMSA has the right to buy-back a 55% interest in the AMSA mining rights within 120 days of exercise of the Option, by repaying 55% of the Option exercise price and paying five times the exploration expenditure incurred during the option period.
This transaction represents a strategic consolidation of the Cortadera porphyry deposit area and has the potential to deliver relatively low-cost, organic resource growth to the Costa Fuego copper hub.
Hot Chili plans to commence systematic exploration and resource definition drilling across this new landholding addition at Cortadera as soon as possible.
The Directors thank AMSA for their commitment to work with Hot Chili and to enable the continued consolidation of a globally significant, emerging copper hub for the Vallenar region of Chile.
This announcement is authorised by the Board of Directors for release to ASX and TSX.
* Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery).
The Metal Prices applied in the CuEq calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. The recovery and copper equivalent formula for each deposit is:
Cortadera and San Antonio – Weighted recoveries of 82% Cu, 55% Au, 82% Mo and 37% Ag.
CuEq(%) = Cu(%) + 0.56 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t)
Productora – Weighted recoveries of 84% Cu, 47% Au, 47% Mo and 0% Ag (not reported)
CuEq(%) = Cu(%) + 0.46 x Au(g/t) + 0.00026 x Mo(ppm)
Costa Fuego – Weighted recoveries of 83% Cu, 53% Au, 69% Mo and 23% Ag
CuEq(%) = Cu(%) + 0.52 x Au(g/t) + 0.00039 x Mo(ppm) + 0.0027 x Ag(g/t)
** Reported on a 100% Basis - combining Mineral Resource Estimates for the Cortadera, Productora and San Antonio deposits. Figures are rounded, reported to appropriate significant figures, and reported in accordance with the JORC Code, CIM and NI 43-101. Metal rounded to nearest thousand, or if less, to the nearest hundred.
Total Resource reported at +0.21% CuEq for open pit and +0.30% CuEq for underground.
Note: All results represent 2m composites with appropriate analysis undertaken for Cu, Au and Mo by various independent laboratories in Chile. Refer to Table1 of this announcement for further detail on sampling methodology, analytical techniques and QA/QC procedures utilised.
* Copper Equivalent (CuEq) reported for the drillhole intersections were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery).
The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. The entirety of the intersection is assumed as fresh. The recovery and copper equivalent formula for each deposit is:
Cortadera – Recoveries of 83% Cu, 56% Au, 83% Mo and 37% Ag. CuEq(%) = Cu(%) + 0.56 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t)
For Cortadera and Productora, significant intersections are calculated above a nominal cut-off grade of 0.2% Cu. Where appropriate, significant intersections may contain up to 30m down-hole distance of internal dilution (less than 0.2% Cu). Significant intersections are separated where internal dilution is greater than 30m down-hole distance. The selection of 0.2% Cu for significant intersection cut-off grade is aligned with marginal economic cut-off grade for bulk tonnage polymetallic copper deposits of similar grade in Chile and elsewhere in the world. Down-hole significant intersection widths are estimated to be at or around true-widths of mineralisation.
Refer to ASX Announcement "Hot Chili Delivers Next Level of Growth" (31st March 2022) for JORC Code Table 1 information related to the Costa Fuego JORC-compliant Mineral Resource Estimate (MRE) by Competent Person Elizabeth Haren, constituting the MREs of Cortadera, Productora and San Antonio (which combine to form Costa Fuego).
* Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery).
The Metal Prices applied in the CuEq calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. The recovery and copper equivalent formula for each deposit is:
Cortadera and San Antonio – Weighted recoveries of 82% Cu, 55% Au, 82% Mo and 37% Ag.
CuEq(%) = Cu(%) + 0.56 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t)
Productora – Weighted recoveries of 84% Cu, 47% Au, 47% Mo and 0% Ag (not reported)
CuEq(%) = Cu(%) + 0.46 x Au(g/t) + 0.00026 x Mo(ppm)
Costa Fuego – Weighted recoveries of 83% Cu, 53% Au, 69% Mo and 23% Ag
CuEq(%) = Cu(%) + 0.52 x Au(g/t) + 0.00039 x Mo(ppm) + 0.0027 x Ag(g/t)
** Reported on a 100% Basis - combining Mineral Resource Estimates for the Cortadera, Productora and San Antonio deposits. Figures are rounded, reported to appropriate significant figures, and reported in accordance with the JORC Code, CIM and NI 43-101. Metal rounded to nearest thousand, or if less, to the nearest hundred.
Total Resource reported at +0.21% CuEq for open pit and +0.30% CuEq for underground.
** Note: Silver (Ag) is only present within the Cortadera Mineral Resource estimate
Competent Person's Statement- Exploration Results
Exploration information in this Announcement is based upon work compiled by Mr Christian Easterday, the Managing Director and a full-time employee of Hot Chili Limited whom is a Member of the Australasian Institute of Geoscientists (AIG). Mr Easterday has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a ‘Competent Person' as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (JORC Code). Mr Easterday consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.
Competent Person's Statement- Costa Fuego Mineral Resources
The information in this report that relates to Mineral Resources for Cortadera, Productora and San Antonio which constitute the combined Costa Fuego Project is based on information compiled by Ms Elizabeth Haren, a Competent Person who is a Member and Chartered Professional of The Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Ms Haren is a full-time employee of Haren Consulting Pty Ltd and an independent consultant to Hot Chili. Ms Haren has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Ms Haren consents to the inclusion in the report of the matters based on her information in the form and context in which it appears. For further information on the Costa Fuego Project, refer to the technical report titled "Resource Report for the Costa Fuego Technical Report", dated December 13, 2021, which is available for review under Hot Chili's profile at www.sedar.com.
Reporting of Copper Equivalent
Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery). The Metal Prices applied in the CuEq calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. The recovery and copper equivalent formula for each deposit is:
Cortadera and San Antonio – Weighted recoveries of 82% Cu, 55% Au, 82% Mo and 37% Ag.
CuEq(%) = Cu(%) + 0.56 x Au(g/t) + 0.00046 x Mo(ppm) + 0.0043 x Ag(g/t)
Productora – Weighted recoveries of 84% Cu, 47% Au, 47% Mo and 0% Ag (not reported)
CuEq(%) = Cu(%) + 0.46 x Au(g/t) + 0.00026 x Mo(ppm)
Costa Fuego – Weighted recoveries of 83% Cu, 53% Au, 69% Mo and 23% Ag
CuEq(%) = Cu(%) + 0.52 x Au(g/t) + 0.00039 x Mo(ppm) + 0.0027 x Ag(g/t)
About Hot Chili
Hot Chili Limited is a mineral exploration company with assets in Chile. The Company's flagship project, Costa Fuego, is the consolidation into a hub of the Cortadera porphyry copper-gold discovery and the Productora copper-gold deposit, set 14 km apart in an excellent location – low altitude, coastal range of Chile, infrastructure rich, low capital intensity. The Costa Fuego landholdings, contains an Indicated Resource of 725Mt grading 0.47% CuEq (copper equivalent), containing 2.8 Mt Cu, 2.6 Moz Au, 10.4 Moz Ag, and 67 kt Mo and an Inferred Resource of 202 Mt grading 0.36% CuEq containing 0.6Mt Cu, 0.4 Moz Au, 2.0 Moz Ag and 13 kt Mo, at a cut-off grade of +0.21% CuEq for open pit and +0.30% CuEq for underground. The Company is working to advance its Costa Fuego Project through a preliminary feasibility study (followed by a full FS and DTM), and test several high-priority exploration targets.
Certain statements contained in this news release, including information as to the future financial or operating performance of Hot Chili and its projects may include statements that are "forward�looking statements" which may include, amongst other things, statements regarding targets, estimates and assumptions in respect of mineral reserves and mineral resources and anticipated grades and recovery rates, production and prices, recovery costs and results, and capital expenditures and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions.These forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Hot Chili, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward�looking statements.
Hot Chili disclaims any intent or obligation to update publicly or release any revisions to any forward�looking statements, whether as a result of new information, future events, circumstances or results or otherwise after the date of this news release or to reflect the occurrence of unanticipated events, other than as may be required by law. The words "believe", "expect", "anticipate", "indicate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward�looking statements.
All forward�looking statements made in this news release are qualified by the foregoing cautionary statements. Investors are cautioned that forward�looking statements are not a guarantee of future performance and accordingly investors are cautioned not to put undue reliance on forward�looking statements due to the inherent uncertainty therein.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Investor Relations
Graham Farrell
+1 416-842-9003
Graham.Farrell@harbor-access.com
Investor Relations
Jonathan Paterson
+1 475-477-9401
Jonathan.Paterson@harobr-access.com
Managing Director
Christian Easterday
https://www.hotchili.net.au/investors/
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TSX: LUN) (Nasdaq Stockholm: LUMI) Lundin Mining Corporation ("Lundin Mining" or the "Company") announces today it has signed a definitive agreement to sell its Neves-Corvo operation in Portugal and Zinkgruvan operation in Sweden to Boliden AB (OM: BOL) ("Boliden") for up to $1.52 billion in total consideration (the "Transaction"). Unless otherwise stated, all numbers are presented in United States dollars.
Under the terms of the agreement, Lundin Mining will receive upfront cash consideration of $1.37 billion upon closing, based on a cash-free and debt-free enterprise value of $1.3 billion as of an August 31, 2024 lock box date ("Lock-Box"). In addition, Lundin Mining will receive up to $150 million in contingent cash consideration upon satisfaction of certain conditions outlined below. The Transaction is not subject to shareholder approval or any financing conditions.
The proceeds from the Transaction will strengthen the Company's balance sheet and support its growth plans in the Vicuña District.
Jack Lundin , President and CEO, commented "Neves-Corvo and Zinkgruvan have played a significant role in catalyzing the Company to become a multi-asset base metals producer of global scale. I want to thank the teams for their dedication and hard work over the years; the Company would not be where it is today without these two long-life mining operations. We believe these operations will be an excellent strategic fit under Boliden's operatorship, and the employees and local stakeholders will benefit from the new ownership and highly experienced management team.
"The sale will further strengthen our balance sheet to support the Company's growing portfolio in South America and enable management to concentrate our focus in an area which will provide the greatest long-term value for our shareholders. It is an opportune time to optimize our portfolio through this divestiture as we drive towards becoming a top-tier copper-dominant mining company."
Transaction Summary
Boliden has agreed to acquire 100% of the shares of Somincor–Sociedade Mineira de Neves-Corvo, S.A. ("Neves-Corvo") and 100% of the shares of each of Zinkgruvan Mining Aktiebolag and North Atlantic Natural Resources Aktiebolag (together "Zinkgruvan") from subsidiaries of Lundin Mining for up to $1.52 billion in cash, consisting of $1.37 billion in upfront cash consideration at closing and up to $150 million in contingent consideration. Total consideration at closing may also be subject to other customary adjustments in the event of non-permitted leakage from the Lock-Box.
Upfront Consideration
The terms of the agreement incorporate a Lock-Box completion mechanism, with the purchase price based on a cash-free and debt-free enterprise value of $1.3 billion , and assuming a normalized level of working capital. Based on the Lock-Box financial statements as of August 31, 2024 , the upfront cash consideration to be paid at closing is $1.37 billion . The upfront cash consideration will also accrue interest at a 5% annual interest rate from August 31, 2024 to closing and is payable to the Company at closing.
Neves-Corvo Contingent Payment
Up to $100 million in contingent payments at Neves-Corvo is tied to underlying copper and zinc prices ("Neves-Corvo Contingent Payment"). Boliden will pay Lundin Mining 60% of the incremental revenue realized in each of the three calendar years between 2025 and 2027 where the average realized price on a semi-annual calendar period exceeds $4.50 /lb copper and/or $1.30 /lb zinc as per the London Metal Exchange ("LME") reference prices. Incremental revenue is calculated using total payable sales volumes of copper and/or zinc for the semi-annual calendar period and tax affected using Portugal's current corporate income tax rate.
Zinkgruvan Contingent Payment
Up to $50 million in contingent payments at Zinkgruvan is tied to underlying zinc prices ("Zinkgruvan Contingent Payment"). Boliden will pay Lundin 50% of the incremental revenue realized in each of the two calendar years between 2025 and 2026 where the average realized zinc price on an annual calendar year exceeds US$1.40 /lb zinc, as per the LME reference prices, provided a minimum annual production of 135 million pounds of payable zinc is achieved. Incremental revenue is calculated using total payable sales volumes of zinc for an annual calendar year period and tax affected using Sweden's current corporate income tax rate. The Zinkgruvan Contingent Payment is subject to a maximum payout of $25 million per calendar year.
Indicative Timeline
The Transaction is anticipated to close in mid-2025, subject to the completion of customary conditions and regulatory approvals, including but not limited to merger control approvals by the EU Commission and approval of the Swedish Inspectorate of Strategic Products under the Swedish FDI Act, and the change of control approval by the Portuguese Directorate-General for Energy and Geology ( Direção-Geral de Energia e Geologia ) under the Neves-Corvo Concession Contract.
About Lundin Mining
Lundin Mining is a diversified Canadian base metals mining company with operations or projects in Argentina , Brazil , Chile , Portugal , Sweden and the United States of America , primarily producing copper, zinc, gold and nickel.
The information in this news release is information that Lundin Mining is required to make public under the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below on December 9, 2024 at 1:00 am EST .
Cautionary Statement on Forward-Looking Information
Certain of the statements made and information contained herein are "forward-looking information" within the meaning of applicable Canadian securities laws. All statements other than statements of historical facts included in this document constitute forward-looking information, including but not limited to statements regarding the Company's plans, prospects and business strategies; the completion of the Transaction and the timing thereof; the conditions to close the Transaction; the terms of the contingent payments and expectations related thereto; the expectations for Boliden as a strategic fit and the benefits expected for stakeholders; the expected benefits of the Transaction for the Company, including the expectation to strengthen the Company's balance sheet and support its growth plans in the Vicuna District; the realization of prospects in the Vicuña district; the identification of additional value creation opportunities; the Company's guidance on the timing and amount of future production and its expectations regarding the results of operations; expected costs; permitting requirements and timelines; anticipated exploration and development activities at the Company's projects; expansion projects and the realization of additional value; the Company's integration of acquisitions and expansions and any anticipated benefits thereof; the Company's ability to become a top tier copper producer; and expectations for other economic, business, and/or competitive factors. Words such as "believe", "expect", "anticipate", "contemplate", "target", "plan", "goal", "aim", "intend", "continue", "budget", "estimate", "may", "will", "can", "could", "should", "schedule" and similar expressions identify forward-looking information.
Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management, including that the Company can access financing, appropriate equipment and sufficient labour; assumed and future price of copper, zinc, nickel, gold and other metals; anticipated costs; that the conditions to close the Transaction will be satisfied; the ability to achieve goals and identify and realize opportunities; that the political environment in which the Company operates will continue to support the development and operation of mining projects; and assumptions related to the factors set forth below. While these factors and assumptions are considered reasonable by Lundin Mining as at the date of this document in light of management's experience and perception of current conditions and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking information and undue reliance should not be placed on such information. Such factors include, but are not limited to: the failure to obtain required approvals for the Transaction; global financial conditions, market volatility and inflation, including pricing and availability of key supplies and services; risks inherent in mining including but not limited to risks to the environment, industrial accidents, catastrophic equipment failures, unusual or unexpected geological formations or unstable ground conditions, and natural phenomena such as earthquakes, flooding or unusually severe weather; uninsurable risks; volatility and fluctuations in metal and commodity demand and prices; significant reliance on assets in Chile ; reputation risks related to negative publicity with respect to the Company or the mining industry in general; delays or the inability to obtain, retain or comply with permits; risks relating to the development of the Josemaria Project; health and safety laws and regulations; risks associated with climate change; risks relating to indebtedness; economic, political and social instability and mining regime changes in the Company's operating jurisdictions, including but not limited to those related to permitting and approvals, nationalization or expropriation without fair compensation, environmental and tailings management, labour, trade relations, and transportation; inability to attract and retain highly skilled employees; risks inherent in and/or associated with operating in foreign countries and emerging markets, including with respect to foreign exchange and capital controls; project financing risks, liquidity risks and limited financial resources; health and safety risks; compliance with environmental, unavailable or inaccessible infrastructure, infrastructure failures, and risks related to ageing infrastructure; changing taxation regimes; the inability to effectively compete in the industry; risks associated with acquisitions partnerships; expansions and related integration efforts, including the ability to achieve anticipated benefits, unanticipated difficulties or expenditures relating to integration and diversion of management time on integration; risks related to mine closure activities, reclamation obligations, environmental liabilities and closed and historical sites; reliance on key personnel and reporting and oversight systems, as well as third parties and consultants in foreign jurisdictions; information technology and cybersecurity risks; risks associated with the estimation of Mineral Resources and Mineral Reserves and the geology, grade and continuity of mineral deposits including but not limited to models relating thereto; actual ore mined and/or metal recoveries varying from Mineral Resource and Mineral Reserve estimates, estimates of grade, tonnage, dilution, mine plans and metallurgical and other characteristics; ore processing efficiency; community and stakeholder opposition; regulatory investigations, enforcement, sanctions and/or related or other litigation; financial projections, including estimates of future expenditures and cash costs, and estimates of future production may not be reliable; enforcing legal rights in foreign jurisdictions; risks associated with the use of derivatives; risks relating to joint ventures and operations; environmental and regulatory risks associated with the structural stability of waste rock dumps or tailings storage facilities; exchange rate fluctuations; compliance with foreign laws; potential for the allegation of fraud and corruption involving the Company, its customers, suppliers or employees, or the allegation of improper or discriminatory employment practices, or human rights violations; risks relating to dilution; risks relating to payment of dividends; counterparty and customer concentration risks; activist shareholders and proxy solicitation matters; estimation of asset carrying values; relationships with employees and contractors, and the potential for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; conflicts of interest; existence of significant shareholders; challenges or defects in title; internal controls; risks relating to minor elements contained in concentrate products; the threat associated with outbreaks of viruses and infectious diseases; mining rates and rehabilitation projects; mill shut downs; and other risks and uncertainties, including but not limited to those described in the " Risks and Uncertainties" section of the Company's MD&A for the three months ended March 31, 2024 and the "Risks and Uncertainties" section of the Company's Annual Information Form for the year ended December 31, 2023 , which are available on SEDAR+ at www.sedarplus.com under the Company's profile.
All of the forward-looking information in this document are qualified by these cautionary statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, forecasted or intended and readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking information. Accordingly, there can be no assurance that forward-looking information will prove to be accurate and forward-looking information is not a guarantee of future performance. Readers are advised not to place undue reliance on forward-looking information. The forward-looking information contained herein speaks only as of the date of this document. The Company disclaims any intention or obligation to update or revise forward – looking information or to explain any material difference between such and subsequent actual events, except as required by applicable law.
SOURCE Lundin Mining Corporation
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