Hot Chili ripped higher, and it was all a bit too spicy for the ASX's liking

Copper miner Hot Chili was the best performing stock on the ASX on Thursday morning, adding almost 40 per cent to top out over 3c.

Over the last three days shares in the company (ASX: HCH) have almost doubled.

And when a small company rockets higher out of nowhere like this, the ASX often echoes the sentiments of Marvin Gaye and asks: what’s going on?

That happened this morning, when the exchange asked Hot Chili why its shares spiked and why they’d been accompanied by a significant increase in trading volume.

Hot Chili pleaded ignorance, saying it didn’t know why and had nothing on the table that could have spurred the sharp rise.

The ASX issues their ‘please explains’ as a way to get a company to publicly say there’s no leaked information that investors could be using to get an upper hand over traders who don’t have the same access, or to allow the company to go into a trading halt in order to get that information into the public sphere in an orderly way.

Stockhead is not suggesting either case applies to Hot Chili.

We’re up because were just that good

Sometimes, however, ASX queries are a good opportunity for companies to give themselves a public pat on the back.

As part of Hot Chili’s reply to the ASX, company secretary Lloyd Flint highlighted a recent transaction where Hot Chili purchased 100 per cent of the Cortadera copper-gold deposit from a private Chilean mining group.

In an investor presentation on Tuesday, Hot Chili referred to the transaction as a “game-changer” as the Cortadera site represented a “major copper-gold porphyry discovery”.

The total cost of the transaction was disclosed as $30 million payable over 30 months, starting with a $5 million instalment to be paid within six months of the Memorandum of Understanding on February 4.

Also on February 4, the company said it had raised $1 million of capital from sophisticated investors, and announced a rights issue where it was seeking to raise a further $2.2 million at 1 cent per share.

On Tuesday this week, Hot Chili announced the closing date for the rights issue had been extended to March 1.