Hot Chili attracts $14.4m strategic investment from Glencore
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No company can pull off the number of eye-popping drill intersections that Hot Chili has achieved at the Cortadera copper-gold porphyry discovery without drawing attention.
So it should not be surprising that the potential scale of the company’s broader Costa Fuego project has drawn top tier commodity trading and mining company Glencore to make a strategic investment.
Glencore is acquiring a 9.9% interest in Hot Chili (ASX:HCH) in exchange for making a $14.4m investment and securing the right to appoint a director to its board.
The company will also grant Glencore offtake agreements on arms-length commercially competitive benchmark terms over 60% of the concentrate produced for a period of eight years from the start of commercial production.
This investment and Glencore’s backing provides strong support for the completion of a feasibility study and development of Costa Fuego.
“Hot Chili welcomes the strategic alignment with Glencore, especially as the company moves toward a dual listing on the TSX Venture exchange by the end of 2021,” managing director Christian Easterday said.
“We view this as a significant milestone event and a strong endorsement by Glencore.
“We believe Glencore will make an excellent partner in the development of Costa Fuego and (this is) a testament to Hot Chili’s staff and consultants who are working tirelessly to transition Hot Chili into a Tier-1 copper developer.”
The Costa Fuego project, which consists of the Cortadera, Productora and El Fuego deposits, has a combined resource of 724 million tonnes grading 0.48% copper equivalent for 3.5 million tonnes copper equivalent metal.
While the discovery hole at Cortadera was already significant given that it intersected 188m at 1.1% copper equivalent, subsequent holes were equally or more impressive, highlighting its sheer scale.
Additionally, recent drilling had located a porphyry zone between the Cuerpo 1 and Cuerpo 2 porphyries, which indicates that all porphyry centres at the deposit are connected.
Progress has also been made into developing the Productora resource as either a bulk tonnage or higher-grade satellite ore source for Costa Fuego.
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.