Hot Chili eyes shallow starter-pit at Chilean copper-gold play

Hot Chili has confirmed broad, high-grade, copper-gold near surface at its emerging La Verde porphyry discovery in Chile, hinting at the possibility of a starter pit. By supplying its flagship Costa Fuego monster project nearby with rich ore, the game-changing option could materially strengthen its opening years of production.

The company says phase two diamond drilling extended the eastern flank of La Verde and has outlined a clear up-dip expansion directly above the new gold-rich zone reported last month.

Latest assays from diamond drilling to extend the promising recent hits have returned an additional 47m at 0.57 per cent copper and 0.12 grams per tonne (g/t) gold from 247.5m depth. Further down the same hole, the drill bit hit a 28-metre section running 0.49 per cent copper and 0.15g/t gold from 316m, separated from the upper intersection with a narrow non-mineralised dyke.

The full hole now stands at 317m grading 0.38 per cent copper and 0.1 g/t gold from just 32 m downhole.

Two further diamond holes have been drilled from the same pad, up-dip of last month’s standout 529-metre intercept, with both holes logging wide intervals of visible copper porphyry mineralisation from surface to their respective end-of-hole depths.

Assays for these holes and four others are in the lab.

Hot Chili has now completed eight holes for 2900m of drilling in the campaign, with every diamond hole reportedly intersecting broad widths of visual porphyry-style copper-gold mineralisation.

The company says the results point to the convergence of several mineralised lenses into a single, major, coherent higher-grade core that now reaches close to surface. This is exactly the geometry required for a potential higher-grade starter pit, which could then feed the planned Costa Fuego 20-year processing hub just 30 kilometres up the road.

Addition of a higher-grade starter pit would significantly strengthen the front-end of Costa Fuego’s 20-year mine schedule and be a game changer for scale and economics. Costa Fuego is rapidly shaping as a low-risk, coastal contender to adjacent major copper developments in the Huasco Region and Vicuña District of the high Andes.

Hot Chili’s November intersection at La Verde, really put the market on notice, with a staggering 529m intercept grading 0.41 per cent copper and 0.21g/t gold. The hit sent the company’s stock soaring by almost 50 per cent in two weeks to $1.25 a share.

Market pundits have clearly understood the significance of La Verde to the broader Costa Fuego story. Copper-gold porphyry monsters all along South America’s west coast regularly drop like flies as major takeover targets from the likes of BHP, to Lundin Mining and even a $1.7 billion bid for SolGold’s Cascabel porphyry by Jiangxi Copper Corporation just last week.

Costa Fuego remains one of the largest undeveloped copper deposits outside the majors, hosting a combined 798-million-tonne resource grading 0.45 per cent copper equivalent. That inventory carries 2.9 million tonnes of contained copper, 2.6 million ounces of gold, 12.9 million ounces of silver and 68,000 tonnes of molybdenum.

A recent pre-feasibility study at Costa Fuego outlined average annual production at a whopping 95,000 tonnes of copper and 48,000 ounces of gold over the first 14 years of production, generating a post-tax net present value of A$1.81 billion at a conservative A$6.50 per pound copper price – now A$8.20.

With assays to come and a cluster of look-alike magnetic targets still to test, La Verde keeps adding momentum to an already compelling coastal copper development for Hot Chili, at a time when the global hunt for new porphyry supply monsters shows no sign of slowing.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au