Hot Chili Unveils PFS and Ore Reserve for Costa Fuego

Hot Chili (ASX: HCH) has announced the completion of a Pre-Feasibility Study (PFS) and a maiden Ore Reserve for its, positioning the asset as a globally significant, low-cost development in the copper sector. With a projected 20-year mine life and strong economic fundamentals, Costa Fuego is poised to become a player in the copper supply chain amid surging demand.

A Copper Giant in the Making

Located on Chile’s Coastal Range, the Costa Fuego copper-gold project in Chile project boasts a production profile that places it in the top quartile of global copper producers. The study outlines an average annual copper equivalent (CuEq) production of 116,000 tonnes, including 95,000 tonnes of copper and 48,000 ounces of gold over the initial 14 years of primary production. Over the life of the mine, total output is estimated at 1.5 million tonnes of copper and 780,000 ounces of gold.

"We are very pleased to deliver our PFS for Costa Fuego on time and within guidance," said Hot Chili’s Managing Director Christian Easterday. "With both copper and gold prices at record highs, our PFS has demonstrated two of the most critical factors in assessing the likelihood of meaningful, near-term cop

Financial Strength and Cost Competitiveness

The PFS estimates a total life-of-mine revenue of approximately $17.3 billion, with a post-tax free cash flow of $3.86 billion. The project’s competitive cost structure includes an all-in sustaining cost (AISC) of $1.85 per pound of copper and a C1 cash cost of $1.38 per pound (net of by-product credits), signalling Costa Fuego potentially remains cost-competitive even in weaker price environments.

At an 8% discount rate, the project carries a post-tax Net Present Value (NPV) of $1.2 billion, with an Internal Rate of Return (IRR) of 19%. The financial upside is significant, with the NPV surging to $2.2 billion and the IRR to 30% at current spot copper prices of $5.30 per pound.

Managing Director Christian Easterday also detailed HCH's cash position and funding intent, "With cash of approximately A$19 million as at 31st December 2024 and both of our key assets (Costa Fuego and Huasco Water) at PFS level study, we are well positioned to pursue potential strategic partnership and sponsorship funding discussions."

De-risked Development with Strong Upside Potential

Hot Chili has applied an additional $442 million in capital costs to mitigate project risks, addressing inflationary pressures and refining its scope. The initial capital expenditure stands at $1.27 billion, translating to a capital intensity of $14,079 per tonne of annual CuEq production—placing Costa Fuego in the first quartile globally.

The project’s low-elevation setting and advanced permitting status provide a strategic advantage, with Hot Chili preparing to submit its Stage-1 Environmental Impact Assessment (EIA) to maintain momentum towards first production before the decade’s end.

Exploration and Expansion: The La Verde Discovery

Beyond Costa Fuego’s robust PFS, Hot Chili is eyeing further expansion through its recently confirmed La Verde Cu-Au porphyry discovery. The company has commenced a second EIA to integrate La Verde into its development pipeline, potentially enhancing project economics and extending mine life. An independent NI 43-101 technical report detailing the PFS will be available within 45 days on Hot Chili’s website.