Hot Chili to fill its coffers with $33m placement

Underwriters and investors including major shareholders such as Glencore have demonstrated their support for Hot Chili by backing a C$30m ($33m) placement.

The placement, which is priced at C$1.55 a share and includes one free attaching warrant exercisable at C$2.50 each for every two new shares, is tied to an upcoming dual listing of the company on the TSX Venture Exchange.

Proceeds from the placement will be used by Hot Chili (ASX:HCH) to upgrade resources at its world-class Cortadera copper-gold discovery in Chile, advance the pre-feasibility study for the broader Costa Fuego project and test several high-priority exploration targets.

“We hope to add a presence in North American markets and continue to focus on delivering Costa Fuego into production against a backdrop of strengthening copper price and limited new large copper mines,” managing director Christian Easterday said.

“Costa Fuego is a stand-out major copper development in a short field of players globally.”

Cortadera currently has a resource of 451 million tonnes grading 0.46% copper equivalent, or a significant majority of the overall 724Mt at 0.48% copper equivalent resource at the Costa Fuego project.

Drilling has continued to intersect thick zones of porphyry copper-gold, indicating that there’s room for plenty of growth.

Placement details

The placement of 19.36 million shares will be made to institutional, professional and sophisticated investors with Glencore maintaining its 9.99% interest.

While most of the shares will not be subject to shareholder approval, the exception is a tranche of 232,714 shares worth C$360,708 that will be issued to Blue Spec Sondajes Chile, a company associated with chairman Murray Black.

Closing and issue of the shares is conditional on Hot Chili filing a final prospectus with Canadian securities regulators and receiving a receipt for, and the shares issued under the placement being approved for listing on the TSXV.

This placement will ensure that the company is well-funded to progress its ambitions to become a standout copper and gold producer in Chile.

This article was developed in collaboration with Hot Chili, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.