Hot Chili says new transport option for Costa Fuego just 10pc the cost of road haulage

A recently completed materials handling scoping study highlights the potential for a low-cost ‘rope’ conveyor to transport ore at Hot Chilli’s emerging world-class Costa Fuego copper-gold development in Chile.

The pre-feasibility study (PFS) into Hot Chili’s (ASX: HCH) combined Costa Fuego copper-gold development in Chile is gaining momentum.

As part of the PFS, a recently completed materials handling study highlighted the potential for a low-cost rope conveyor — called RopeCon — to transport ore downhill from ‘Cortadera’ to ‘Productora’, where the central processing infrastructure will be located.

By locating the processing plant at Productora, Hot Chili takes advantage of the existing project definition and permitting (water and power easements, and surface rights) already secured in the 2016 Productora PFS.

It represents significant time and capital cost savings, the company says.

More money can be saved by using the RopeCon system, determined to be less than 10% of the operating cost associated with truck haulage.

The unit cost for running a RopeCon is also estimated to be approximately a quarter of the cost when compared to a conventional conveyor for this project.

Executive study manager John Hearne says the beauty of this strategy is that it allows the selection of ore grade for the concentrator to be highly dynamic.

“Not only can it be optimised to deliver value in our study models, it will be flexible enough to adapt with the evolving resource base being assembled regionally,” he says.

“A region that appears to be getting larger when we consider a low-operating cost option like a RopeCon.”

A proven development approach

Hot Chili is taking a similar development approach to the Nueva Union (Teck 50%, Newmont Goldcorp 50%) copper project, also in Chile.

Here, the Relincho and El Morro copper-gold deposits are being combined into one development via haulage using a 40km conveyor belt.

Nueva Union is located between 2,000m and 4,000m elevation, ~100km east-northeast of Costa Fuego, with similar average copper grades and co-credit metals.

By comparison, Costa Fuego’s Cortadera and Productora copper-gold deposits are located 14km apart, at low attitude (800 -1,000m elevation), along the Pan American Highway and within 50km of port facilities.

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.