Special Report: Hot Chili is likely to see greater cashflow from its Productora copper-gold project in Chile after agreeing to expand lease mining production by 50 per cent.

Under the expansion of its lease mining agreement with Chilean government agency Empresa Nacional de Mineria (ENAMI), a maximum of 180,000t of ore per annum will be supplied from Productora to ENAMI’s Vallenar processing facility.

This is up from the previous limit of 120,000tpa and accounts for all remaining processing capacity at the oxide and sulphide processing facility.

And that’s not all.

Hot Chili (ASX:HCH) will also benefit from the stronger copper price with the 10 per cent royalty on the sale value of extracted materials produced by ENAMI now expected to be worth $US3.57 per pound of copper equivalent, up from the previous $US2/lb.

This is in addition to the payment of $US2 per tonne of ore purchased by ENAMI.

Ramp-up of lease mining is underway following the receipt of the Productora mine plan and permitting approval in November.

The lease mining team is currently extending the existing decline to access new ore development below the Productora underground mine.

Once access to new development is in place, the lease mining team expects to increase its production rate which has been limited to small-scale remnant ore extraction to date.

Lease mining

Under the two year agreement, ENAMI will now mine and process 180,000 tonnes per annum of ore from Productora through its Vallenar plant.

Lease mining will benefit from the existing Santa Innes and Productora underground mines and is not expected to materially deplete the project’s existing 167 million tonne ore reserve.

The agreement includes an option for a one-year extension.


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.