PERTH (miningweekly.com) – ASX-listed Hot Chili has inked a formal agreement with Chilean-government agency Empresa Nacional de Mineria (Enami) for the lease mining and processing of ore from the Productora copper/gold project, in Chile.
Hot Chili said on Tuesday that the agreement provided a low-risk pathway to bring forward first production from the company’s coastal copper hub, while also providing certainty of ore supply and employment at Enami’s nearby processing facility in the township of Vallenar.
Enami is expected to start mining within three months from the grant of the necessary exploitation permits, with first revenue expected in the fourth quarter of this year.
Enami is expected to process around 120 000 t/y of ore through the Vallenar plant over a two-year period, with the option to extend the agreement by a further year.
The Productora joint venture company, in which Hot Chili owns an 80% stake, will be paid $2/t for the ore processed, along with a 10% royalty for the sale value of the extracted minerals.
Enami is expecting a production grade of more than 1% copper, given the previous historical processing of higher-grade ore from Productora.
Meanwhile, Hot Chili on Tuesday said that the company is also accelerating preparations of the restart of diamond drilling at its Cortadera copper porphyry discovery, some 14 km from Productora. Drilling is expected to expand the high-grade core as well as the broader extents of the discovery zone, which has already delivered six drill results since July last year.