Hot Chili Limited · ASX:HCH
Hot Chili — PDAC 2024
40 slides from Hot Chili's conference presentation, Mar 19, 2024
Slide 1: Costa Fuego: Size, Growth & Development
ASX: HCH TSXV: HCH OTCQX: HHLKF Costa Fuego Size, Growth & Development Optionality at Low Elevation in Chile COMPANY PRESENTATION | 1 www.hotchili.com.au
Slide 2: Disclaimer & Forward-Looking Statements
Disclaimer & Forward-Looking Statements Disclaimer This Presentation (the "Presentation") is to be used by the recipient for informational purposes only and does not purport to be complete or contain all of the information that may be material to the current or future business, operations, financial
Slide 3: Costa Fuego Copper-Gold Project, Chile
Costa Fuego Copper-Gold Project, Chile One of the largest scale, lowest elevation copper resources in the world (not controlled by a major miner) Top 10 Undeveloped PEA – Strong Low Risk – Elevation, Next Growth Phase Copper Resource Economics Infrastructure & Up-Scale Strategy (S&P 2022) & Leverage
Slide 4: Copper: The Critical Commodity
Copper THE Critical Commodity Copper inventories at Fiscal & geopolitical critical levels with deficit uncertainty projected to continue Declining copper production Increasing copper demand grades & lack of major from NET ZERO mandates new discoveries Committed NEW copper Material delays in permitti
Slide 5: Costa Fuego Indicated Resource Increased to 798 Mt
Costa Fuego Indicated Resource Increased to 798 Mt Over 85% of Costa Fuego’s contained CuEq metal classified as Indicated Oblique Long-Section View of Cortadera – Looking North-East Costa Fuego Mineral Resource update (Feb 2024): • 6% increase in contained CuEq metal for the total Indicated Resource
Slide 6: A New Water Supplier is Coming
A New Water Supplier is Coming Near Term Water Availability Unlocks Project Value • Water scarcity in the Atacama region of South America is one of the largest challenges facing new global copper supply • Hot Chili holds the only granted maritime water concession and necessary permits to provide cri
Slide 7: Corporate Overview
Corporate Capital Structure Investors By Type Glencore 9% Overview ASX/TSXV: HCH GS Group 7% Exchange OTCQX: HHLKF Blue Spec 6% Shares Outstanding 119.4 M Insiders 1% Options & Performance Rights 9.1 M Retail, 57% Institutional Osisko Investment of Cash A$13.3 M 20% US$15 M expected to (as of 31st D
Slide 8: Low Elevation Advantage – Lowers Economic Hurdle
Low Elevation Advantage – Lowers Economic Hurdle Long-term commitment to risk-reduction of future development 1 Water Risk Removed Granted maritime concession with land access All water required for operations secured 2 Power Line Risk Removed Secured electrical connection to grid Opportunit
Slide 9: Costa Fuego PEA Highlights
Costa Fuego PEA Highlights Strong financial results using 8% discount rate & long-term US$3.85/lb copper price and US$1,750/oz gold price Primary Annual Production Rate (First 14 Years) Post-Tax NPV8% Pre-Tax NPV8% US$1.10 B US$1.54 B 112 kt CuEq¹ (or 248 Mlbs CuEq) Post-Tax IRR Pre-Tax IRR Equal to
Slide 10: Copper Price Scenarios
Copper Price Project Metric Units Base Lower Upper (US$3.50/lb) (US$3.85/lb) (US$4.20/lb) NPV8% US$M 1,046 1,540 2,029 Pre-Tax Copper Price IRR % 19% 24% 29% NPV8% US$M 733 1,100 1,463 Post-Tax Scenarios IRR % 17% 21% 25% Annual Average Revenue US$M 779 845 911 Annual Average EBITDA US$M 384 445 506
Slide 11: Strong Leverage to Copper Price
Strong Leverage to Copper Price 50% increase in long-term copper price from US$3.85/lb near triples post-tax NPV8% and doubles IRR Sensitivity Analysis Sensitivity to Copper Price (Post-Tax NPV8% - ±40% Sensitivity Ranges) (Post-Tax NPV8% & IRR) 4,500 60% Copper Revenue (Price,Recovery,Grade) 4,046
Slide 12: Elevation & Water Permits for Copper Development Projects
Elevation & Water Permits for Copper Development Projects Peer benchmark – elevation above sea level and water permits (maritime or terrestrial) Water Permit Approved No Water Permit Filo del Sol 4,000 Los Azules Escalones Canariaco Norte 3,000 Eleva�on (masl*) Increasing Elevation Average Elevation
Slide 13: Capital Intensity
Capital Intensity Peer benchmark – capital intensity and average annual copper equivalent* production Measured & Indicated Resource (M&I) >50% Measured & Indicated Resource (M&I) <50% Costa Fuego (85% M&I Resource) Hot Chili Ltd High Sphere size represents projected Life of Mine Average Annual CuEq*
Slide 14: Ratio of Post-tax NPV8% / Start-up Capital
Ratio of Post-tax NPV8%/Start-up Capital Peer benchmark – normalised at US$3.85/lb Cu Costa Fuego (85% M&I Resource) Hot Chili Ltd Discount Rate (i) = 8% Discount Rate (i) < 8% Low Increasing Ratio of Post-tax NPV8%/Start-up Capital High Sphere size represents projected life of mine average annual C
Slide 15: World's Largest Undeveloped Copper Mineral Resources
World's Largest Undeveloped Copper Mineral Resources Peer benchmark – projects not controlled by a major mining company 3.6 Mt CuEq* The Global Resource Peer Group of Mineral Resources were selected on the following basis: Top 20 largest global primary copper Mineral Resources (not controlled by a m
Slide 16: Market Valuation of Measured & Indicated Copper Resources
Market Valuation of Measured & Indicated Copper Resources Peer benchmark – market capitalisation / M&I CuEq* mineral resources (US¢/lb) Increasing Market Valuation Filo 32.90 Company Average 4.56 Weighted Average 2.92 The Global Market Resource Peer Group of market-listed companies were selected on
Slide 17: Market Valuation of Development Study Project NPV
Market Valuation of Development Study Project NPV Peer benchmark – ratio of market capitalisation / post-tax NPV8% – normalised at US$3.85/lb Cu PEA Study PFS/DFS Study Increasing Market Valuation Filo 1.33 Company Average 0.19 Weighted Average 0.18 The Global Market Developer Peer Group of market-l
Slide 18: Exploration – Productora Deposit Footprint
Exploration – Productora Deposit Footprint Two large-scale targets adjacent to Resource set for drill testing in 2024 680RL Resistivity depth slice A 6822000mN Chargeability A’ Productora High sulfidation resource Footprint of Soil As > 30ppm epithermal target Lithocap alteration Mapped silica ridge
Slide 19: Exploration – Cortadera Deposit Footprint
Exploration – Cortadera Deposit Footprint Drilling underway to test potential large porphyry cluster Cortadera Target Status Tested high priority targets Airborne magnetic survey (reduced-to-pole) N Untested moderate priority targets MIMDAS Chargeability Model Low Priority targets Cuerpo 2 Post mine
Slide 20: Environment, Social & Governance Focused
Environment, Social & Governance Focused Over a decade of responsible and respectful Investment 2 Environment 3 Social Energy • Connection to Chilean national • Funding of orphanages in grid at Maitencillo substation Vallenar and Freirina • Able to use up to 100% • Providing sociological and Environ
Slide 21: Project Roadmap
Project Roadmap Developing the Costa Fuego Project into an operating asset H1 2024 H2 2024 2025 2026 Mineral Resource Update Delivery of Pre-Feasibility Mineral Resource Update Delivery of Definitive Complete - Q1 2024 Study (H1 2025) Feasibility Study Water Study Update (H2 2024) (H1 2026) Develo
Slide 22: Investment Highlights
Investment Highlights Copper Leverage + Growth + Disciplined Development = Pathway to Relative Value Re-rate Copper Optionality Copper Growth • One of 10 largest undeveloped • Track record of consolidation & copper deposits owned by a Junior exploration success • Highly leveraged to looming shortfal
Slide 23: Appendices
Appendices A new copper supplier is coming COMPANY PRESENTATION | 23 www.hotchili.com.au
Slide 24: Board Members
Board Members Dr Nicole Adshead-Bell Christian Easterday Stephen Quin Independent Chairman Managing Director & Chief Independent Non-Executive Director Executive Officer Roberto de Andraca Adriasola1 Mark Jamieson Non-Executive Director Non-Executive Director (Glencore Nominee) COMPANY PRESENTATION
Slide 25: Management
Management José Ignacio Silva1 Grant King Penelope Beattie Executive Vice President – Chile Chief Operating Officer Company Secretary & Chief Financial Officer Andrea Aravena1 Kirsty Sheerin Geology Manager – Chile Resource Development Manager COMPANY PRESENTATION | 25 1 Chilean National, resides in
Slide 26: Key Consultants
Key Consultants Dr Steve Garwin Dr John Beeson Elizabeth Haren Chief Technical Advisor Lead Structural Geologist Independent Resource Consultant The Costa Fuego PEA was compiled by Wood Australia Pty Ltd, with support from experienced and reputable independent Qualified Persons (QPs) and Key Consult
Slide 27: 24-Bank Consensus Forecast
24-Bank Consensus Forecast Provided by National Bank Financial – Feb 2024 Broker 2024 2025 Copper Price (US$/lb) 2026 2027 2028 Long Term Estimate Estimate Estimate Estimate Estimate Barclays $3.90 $4.00 n.a. n.a. n.a. $3.75 6.00 Bell Potter $3.92 $4.13 $4.24 n.a. n.a. n.a. Price Sensitivity Up BMO
Slide 28: ESG - Our Environment
ESG - Our Environment Sustainable development for the critical mineral of an electric future • Over 10 years of environmental monitoring across Costa Fuego and related infrastructure • Water Conservation focus, with drilling using fresh water purchased from licensed local providers Green House Gas I
Slide 29: ESG - Our People
ESG - Our People Hot Chili values and embraces diversity As an Australian company, operating in Chile and with North American stakeholders, our Board and Employees represent the places where we work. International Team Gender Diversity • 67% of Company Employees are Chilean • Women represent 28% of
Slide 30: Water Fundamentals for Copper in Chile
Water Fundamentals for Copper in Chile Seawater and elevation advantage – low cost and security of supply Operational expenditures by altitude, 2028 forecast, Water stress Share of copper Fresh water supply and demand Sources of water used in Chilean mining $ per metric ton of payable metal in Chile
Slide 31: New Material Copper Supply
New Material Copper Supply Near-term Copper Supply From Majors Produc�on Timeline of Senior Copper Development Peers 2021 2022 2023 2024 2025 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 0.5 0.5 Stated Informa�on DFS Construc�on Marimaca Ramp-up Mina Justa Stated Timeframe 146 kt/a 1.5 Ass
Slide 32: Concentrate Specification
Copper-Gold-Silver-Molybdenum Copper-Gold-Silver-Molybdenum Concentrate Assays Concentrate Assays Element Unit Value Element Unit Value Concentrate Cu Au % ppm 26 5 Mn Na ppm ppm 98 2,392 Mo ppm 7,411 Ni ppm 82 Specification Ag Co ppm ppm 24 263 P Pb ppm ppm 154 136 Cl ppm 238 S % 32 Al2O3 % 2 Sb pp
Slide 33: Notes to Mineral Resource Disclosure – Costa Fuego
Notes to Mineral Resource Disclosure – Costa Fuego Costa Fuego Project Mineral Resource Estimate, February 2024 1 Mineral Resources are reported on a 100% Basis - combining Mineral Resource estimates for the Cortadera, Productora, Alice and San Antonio deposits. All figures are rounded, reported to
Slide 34: Global Resource Peer Group
Company Average Project Ag Reported Level Report Class Mt Cu% Cu Mt Au g/t Au Moz Ag g/t Mo ppm Mo Mt Mo kt CuEq% CuEq Mt Processing Report Source Moz of Study Date Recovery MI 6,456 0.40 25.8 0.34 71 1.7 345 240 1.55 1,551 0.72 46.4 Preliminary Northern Dynasty Cu=84%, Au=73%, Pebble Economic 2021
Slide 35: Global Resource Peer Group (continued)
Company Average Project Ag Mo Reported Level of Report Class Mt Cu% Cu Mt Au g/t Au Moz Ag g/t Mo Mt Mo kt CuEq% CuEq Mt Processing Report Source Moz ppm Study Date Recovery Ind Oxide 362 0.34 1.2 0.33 3.8 13.3 155 0.68 2.4 Oxide: Cu=77%, Filo Mining Filo del Sol Inf Oxide 133 0.25 0.3 0.30 1.3 9.93
Slide 36: Global Developer and Market Peer Group
Global Developer and Market Peer Group Resource benchmarking data Mantos Santo Canariaco Project Units Costa Fuego Hillside Blancos Caravel Kharmagtai Filo del Sol Escalones Domingo Casino Mantoverde Norte Copper World Cascabel Josemaria Vizcachitas Los Azules Caravel Minerals Xanadu Mines Western C
Slide 37: Global Developer and Market Peer Group
Global Developer and Market Peer Group Resource benchmarking data (continued) Canariaco Warintza/ Project Units Costa Fuego Hillside Caravel Kharmagtai Filo del Sol Escalones Casino Cascabel Vizcachitas Los Azules Marimaca Antakori Norte La Verde Western Rex Minerals Caravel Xanadu Filo Mining World
Slide 38: Global Developer and Market Peer Group (continued)
Global Developer and Market Peer Group (continued) Reference data – hyperlinks Index Company Project Hyperlink 1 Hot Chili Ltd Costa Fuego https://www.hotchili.net.au/wp-content/uploads/2022/05/NI-43-101-Costa-Fuego-Resources-FINAL.pdf https://static1.squarespace.com/static/5dcb886c7d6813437e9216a8/
Slide 39: Qualifying Statements
Qualifying Statements National Instrument 43-101 (Canadian Reporting Standard) Joint Ore Reserves Committee Code (JORC) 2012 (Reporting Standard ASX) The PEA is preliminary in nature, includes Inferred resources that are considered too speculative geologically to have the economic considerations The
Slide 40: Full Version of PEA Presentation
Full Version of PEA Presentation Mr Christian Easterday Hot Chili Limited Managing Director Narrated ACN 130 955 725 E: admin@hotchili.net.au Overview of First Floor, 768 Canning Highway, Applecross, Western Australia 6153 Cost Fuego PO Box 1725, Applecross, Harbor Access Western Australia 6953 Inve