Strong Copper-Silver Drill Results Delivered Ahead of San Antonio Resource Upgrade

By: News Direct

September 08, 2022 at 20:43 PM EDT

--News Direct--

New copper (Cu) and silver (Ag) intersections from resource up-grade drilling of the high-grade San Antonio resource, part of the Company’s low-altitude, Costa Fuego senior copper development in Chile

· Highlights include:

o 21m grading 1.6% CuEq (1.6% Cu, 3.2g/t Ag) from 74m depth downhole

o 13m grading 1.3% CuEq (1.3% Cu, 3.2g/t Ag) from 133m depth downhole

including 2m grading 3.7% CuEq (3.5% Cu, 7.6g/t Ag)

o 7m grading 1.6% CuEq* (1.5% Cu, 4.8g/t Ag) from 11m depth downhole

including 2m grading 4.0% CuEq (3.9% Cu, 12.9g/t Ag)

o 4m grading 1.7% CuEq (1.7% Cu, 3.9g/t Ag) from 170m depth downhole

o 4m grading 1.6% CuEq (1.4% Cu, 6.4g/t Ag) from 115m depth downhole

· New results positively impact existing Inferred resource (4.2Mt grading 1.2% CuEq), which is set to be upgraded to Indicated classification in next Costa Fuego resource update, expected later this year

· Final drill results from the Valentina high grade copper-silver deposit expected shortly, regulatory application for follow-up drill programme being prepared

· Drilling continuing at Santiago Z porphyry exploration target - five drill holes complete, results pending

* Copper Equivalent (CuEq) reported for the drill holes at San Antonio used the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. Average fresh rock metallurgical recoveries were Cu=88%, Au=72%, Mo=88%, and Ag=69%.

Hot Chili Limited (ASX: HCH) (TSXV: HCH) (OTCQX: HHLKF) (“Hot Chili” or “Company”) is pleased to announce new drill results from resource upgrade drilling across the high-grade San Antonio copper deposit, part of the Company’s Costa Fuego, coastal range, copper-gold hub in Chile.

Importantly, several drill holes recorded higher grades than estimated in the current San Antonio Inferred resource model.

The new drill results will upgrade the classification of the existing resource at San Antonio from Inferred to Indicated – allowing the resource to be included in open pit reserve estimates for the Costa Fuego Pre-feasibility Study (PFS).

A total of thirteen Reverse Circulation (RC) drill holes for 2,012m were complete across the San Antonio resource window to test extensional potential, as well as in-fill areas of lower geological confidence. Seven RC drill holes recoded significant intersections. In addition, three diamond holes for 495m were completed for metallurgical testwork purposes.

The current resource at San Antonio ((Inferred resource of 4.2Mt grading 1.2% CuEq (1.1% Cu, 2.1g/t Ag) for 48kt Cu and 287koz Ag, reported March 2022) extends from surface over a strike length of approximately 1km, and is amenable to open pit mining with relatively low strip-ratio.

Drilling undertaken across San Antonio, and its neighbouring high grade deposit Valentina, have provided significant encouragement for the addition of two potential high grade, front-end, open pit, ore sources for the combined Costa Fuego coastal copper super-hub.

SAPMET003 mineralisation in altered sandstone containing ~5% sulphides (pyrite and chalcopyrite) from 140m downhole which graded 3.7% CuEq (3.5% Cu, 7.6g/t Ag)

Expanded Drill Programme Planned for Valentina

Recent drill results from San Antonio’s neighbouring deposit Valentina recorded a number of outstanding shallow result, including 3m grading 12.1% CuEq (11.8% Cu & 52.6g/t Ag) within a broader drilling intersection of 12m grading 4.6% CuEq (4.5% Cu & 16.5g/t Ag) from 25m depth down-hole (VALMET0002 as reported on 24th August 2022).

High grade copper-silver mineralisation at Valentina is defined over 300m and is open along strike and at depth.

Importantly, these new high grade drill result recorded in VALMET002, which lie 120m south of the historical Valentina underground mine, remains open and untested to the south below a shallow cover sequence of gravels.

A regulatory clearing application is being prepared to facilitate follow-up drilling at Valentina, which will expand resource drill definition across this potentially high-impact future resource addition to Costa Fuego.

The Company looks forward to releasing final drill results from Valentina shortly as well as an update on first-pass drilling activities across the Santiago Z porphyry exploration target.

This announcement is authorised by the Board of Directors for release to ASX.

Figure 1 Location of Cortadera, Productora, San Antonio and Valentina in relation to coastal range infrastructure of Hot Chili’s combined Costa Fuego copper-gold project, located 600km north of Santiago in Chile

Reported on a 100% Basis - combining Mineral Resource estimates for the Cortadera, Productora and San Antonio deposits. Figures are rounded, reported to appropriate significant figures, and reported in accordance with CIM and NI 43-101. Metal rounded to nearest thousand, or if less, to the nearest hundred. Total Resource reported at +0.21% CuEq for open pit and +0.30% CuEq for underground. Refer to Announcement “Hot Chili Delivers Next Level of Growth” (31st March 2022) for JORC Table 1 information related to the Costa Fuego Mineral Resource estimates.

* Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. For Cortadera and San Antonio (Inferred + Indicated), the average metallurgical recoveries were Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average metallurgical recoveries were Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were Cu=83%, Au=51%, Mo=67% and Ag=23%.

Significant intercepts are calculated above a nominal cut-off grade of 0.5% Cu, with a minimum estimated true thickness of 1.5m. These parameters are aligned with marginal economic cut-off grades for narrow, high-grade polymetallic copper deposits of similar grade in Chile and elsewhere in the world. Down-hole significant intercept widths are estimated to be at or around 70 per cent of true-widths of mineralisation

* Copper Equivalent (CuEq) reported for the drill holes at San Antonio used Costa Fuego averages (as no metallurgical testwork has been completed) using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. Average fresh rock metallurgical recoveries were Cu=83%, Au=56%, Mo=82%, and Ag=37%.

Figure 3. Long section (along the plane of mineralisation) showing significant intersections from phase 1 RC drilling at San Antonio. Current Resource Model (May 2022) shown for reference (filtered to show Inferred blocks above 0.2% CuEq), as well as planned follow-up drilling around southern high-grade intersection (SAP0048).

Qualifying Statements

Costa Fuego Combined Mineral Resource (Reported 31st March 2022)

Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) +(Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. For Cortadera and San Antonio (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=51%, Mo=67% and Ag=23%.

** Note: Silver (Ag) is only present within the Cortadera Mineral Resource estimate

Competent Person’s Statement- Exploration Results

Exploration information in this Announcement is based upon work compiled by Mr Christian Easterday, the Managing Director and a full-time employee of Hot Chili Limited whom is a Member of the Australasian Institute of Geoscientists (AIG). Mr Easterday has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a ‘Competent Person’ as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code). Mr Easterday consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Competent Person’s Statement- Costa Fuego Mineral Resources

The information in this report that relates to Mineral Resources for Cortadera, Productora and San Antonio which constitute the combined Costa Fuego Project is based on information compiled by Ms Elizabeth Haren, a Competent Person who is a Member and Chartered Professional of The Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Ms Haren is a full-time employee of Haren Consulting Pty Ltd and an independent consultant to Hot Chili. Ms Haren has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Ms Haren consents to the inclusion in the report of the matters based on her information in the form and context in which it appears. For further information on the Costa Fuego Project, refer to the technical report titled "Resource Report for the Costa Fuego Technical Report", dated December 13, 2021, which is available for review under Hot Chili's profile at www.sedar.com.

Reporting of Copper Equivalent

Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery)+(Mo ppm × Mo price per g/t × Mo_recovery)+(Au ppm × Au price per g/t × Au_recovery)+ (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. For Cortadera and San Antonio (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=51%, Mo=67% and Ag=23%.

About Hot Chili

Hot Chili Limited is a mineral exploration company with assets in Chile. The Company's flagship project, Costa Fuego, is the consolidation into a hub of the Cortadera porphyry copper-gold discovery and the Productora copper-gold deposit, set 14 km apart in an excellent location – low altitude, coastal range of Chile, infrastructure rich, low capital intensity. The Costa Fuego landholdings, contains an Indicated Resource of 725Mt grading 0.47% CuEq (copper equivalent), containing 2.8 Mt Cu, 2.6 Moz Au, 10.4 Moz Ag, and 67 kt Mo and an Inferred Resource of 202 Mt grading 0.36% CuEq containing 0.6Mt Cu, 0.4 Moz Au, 2.0 Moz Ag and 13 kt Mo, at a cut-off grade of +0.21% CuEq for open pit and +0.30% CuEq for underground. The Company is working to advance its Costa Fuego Project through a preliminary feasibility study (followed by a full FS and DTM), and test several high-priority exploration targets.

Certain statements contained in this news release, including information as to the future financial or operating performance of Hot Chili and its projects may include statements that are "forward‐looking statements" which may include, amongst other things, statements regarding targets, estimates and assumptions in respect of mineral reserves and mineral resources and anticipated grades and recovery rates, production and prices, recovery costs and results, and capital expenditures and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions.These forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Hot Chili, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward‐looking statements.

Hot Chili disclaims any intent or obligation to update publicly or release any revisions to any forward‐looking statements, whether as a result of new information, future events, circumstances or results or otherwise after the date of this news release or to reflect the occurrence of unanticipated events, other than as may be required by law. The words "believe", "expect", "anticipate", "indicate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward‐looking statements.

All forward‐looking statements made in this news release are qualified by the foregoing cautionary statements. Investors are cautioned that forward‐looking statements are not a guarantee of future performance and accordingly investors are cautioned not to put undue reliance on forward‐looking statements due to the inherent uncertainty therein.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Contact Details

Investor Relations

Graham Farrell

+1 416-842-9003

Graham.Farrell@harbor-access.com

Investor Relations

Jonathan Paterson

+1 475-477-9401

Jonathan.Paterson@harbor-access.com

Managing Director

Christian Easterday

admon@hotchili.net.au