Copper miner Hot Chili has announced a three-year Option Agreement to acquire a 100% interest in the historic La Verde open-pit copper mine.
La Verde is situated in the core of the Domeyko mining district, approximately 30 km south of Hot Chili’s Costa Fuego copper-gold project’s planned central processing hub in the Atacama region’s coastal range in Chile.
The project is located at the heart of Hot Chili’s expanded Domeyko landholding, which was secured through an Option Agreement in April 2024.
This latest Option Agreement represents the first time that the entire La Verde porphyry system has been consolidated under single ownership, creating new opportunities for comprehensive drill testing of a potentially larger porphyry copper deposit. The footprint of this deposit measures approximately 1.4 km by 1.2 km.
Since April 2024, Hot Chili has conducted several exploration programmes across the Domeyko region, including soil geochemistry, mapping, and magnetics surveys. These exploration activities were extended to the La Verde copper mine area as part of the Company’s due diligence process ahead of the Option Agreement’s execution.
Geological mapping within the open pit has identified copper oxide mineralisation linked to porphyry-style quartz veins, fractures, and faults, as well as various porphyry intrusive phases
On 30 October 2024, Hot Chili initiated an initial drilling programme at La Verde, comprising eleven RC drill holes totalling approximately 4,000m, with one drill rig currently in operation. To date, two drill holes (totalling 800m) have been completed, with both showing wide intersections of porphyry-style copper mineralisation based on visual inspection, though assay results are pending.
This acquisition represents a key advancement in Hot Chili’s consolidation and growth strategy for Costa Fuego. The Company is also assessing additional advanced prospects within an economically viable distance from its planned central processing facilities. This approach aims to enhance Costa Fuego’s resource base with additional bulk tonnage and/or high-grade copper-gold resources.
Hot Chili anticipates the release of the first assay results and will continue to provide updates as drilling progresses at La Verde.
The Company holds A$25.7 million in cash (as of 30 September 2024), positioning it well to complete the Costa Fuego Prefeasibility Study (PFS), Environmental Impact Statement (EIA), Huasco Water PFS, port upgrade studies, and planned regional growth drilling programmes.
The terms for the La Verde Option Agreement are as follows:
Hot Chili’s wholly owned subsidiary, Sociedad Minera La Frontera has entered into a definitive option agreement with SLM Los Dominiceros una de la Sierra Los Chiqueros (SLM Dominiceros), which holds a 100% interest in the La Verde concession, granting Frontera an option to acquire full ownership of the concession.
A non-refundable cash payment of $320,000 was made to SLM Dominiceros upon the grant of the option. This will be followed by a further non-refundable cash payment of $680,000 is due within 12 months of the agreement’s grant date.
A non-refundable payment of $1m is due within 24 months. The final option may be exercised within 36 months from the grant date with a final non-refundable cash payment of $6.89m.
