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Costa Fuego copper project, Chile – update

Aerial view of the Costa Fuego copper/gold project

Photo by Hot Chili

10th May 2024

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name of the Project
Costa Fuego copper project.

Location
Coastal range of the Atacama region, Chile.

Project Owner/s
Costa Fuego comprises the Productora, Cortadera and San Antonio mineral resources, situated within a 10 km radius.

The Productora deposit is 100%-owned by Chilean incorporated company Sociedad Minera El Aguila SpA (SMEA). SMEA is a joint venture company, 80%-owned by Sociedad Minera El Corazón Limitada (a 100% subsidiary of Hot Chili) and 20% owned by CMP Productora (a 100% subsidiary of Compañía Minera del Pacífico).

The Cortadera deposit is controlled by Chilean incorporated company Sociedad Minera La Frontera SpA (Frontera) – a subsidiary company 100%-owned by Sociedad Minera El Corazón Limitada, which, in turn, is a 100% subsidiary of Hot Chili.

The San Antonio deposit is controlled by Frontera and has an option agreement with a private party to earn a 90% interest.

Project Description
The results of the preliminary economic assessment (PEA) outline a low-risk, long-life copper project benefiting from low startup capital and a high copper-equivalent metal production profile of more than 112 000 t/y over a 16-year mine life, including 95 000 t copper and 49 000 oz gold during primary production (first 14 years).

The PEA proposes a combined openpit truck-and-shovel operation and an underground block cave using centralised processing for a conventional large-scale copper mine producing concentrate and copper cathode.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
In the base case ($3.85/lb), the project has a pretax net present value, at an 8% discount rate, of $1.54-billion and an internal rate of return of 24%, with a payback from first production of 3.5 years.

Capital Expenditure
$1.05-billion.

Planned Start/End Date
Not stated.

Latest Developments
Hot Chili has arranged about A$30-million in funding to accelerate its Costa Fuego copper project.

The company announced a A$24.9-million private placement to institutional and professional investors through the issue of 24.9-million fully paid ordinary shares at A$1 each on May 6.

In addition, the copper firm will issue shareholders the opportunity to participate in a share purchase plan to raise up to A$5-million at the same offer price.

The proceeds from the placement and the plan will provide funding of to 18 months for the completion of the Costa Fuego prefeasibility study, the water supply business case study and the environmental-impact assessment work.

Key Contracts, Suppliers and Consultants
Wood Australia (PEA).

Contact Details for Project Information
Hot Chilli, tel +61 8 9315 9009 or email admin@hotchili.net.au.

 

Edited by Creamer Media Reporter

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