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- Copper miner Hot Chili (HCH) has entered the final stage of payment to take full control of the Cortadera Project in Chile
- The company has now paid US$17 million (around A$22 million) for the project since February 2019 as part of the purchase deal
- This means Hot Chili just has one more US$15 million (around A$19 million) payment to make before it owns 100 per cent of Cortadera
- In the meantime, Hot Chili kicked of a 40,000-metre drilling program at the Cortadera project over the quarter as part of its plans to upgrade the project’s 451-million-tonne maiden resource
- The company spent just over $1.8 million on operating activities over the March quarter, with $9.5 million left in the bank at the end of March
- However, Hot Chili said it has been granted a VAT refund exporting benefit from the Chilean government, which should give it a cash boost of around $4 million
- Shares in Hot Chili are trading grey this morning at 3.8 cents each
Copper miner Hot Chili (HCH) has entered the final stage of payment to take full control of the Cortadera Project in Chile.
In its latest quarterly financial report, the company said it paid US$10 million (around A$13 million) over the March quarter as part of the acquisition payment, taking its total payment so far to US$17 million (around A$22 million) since the purchase deal was first signed in February 2019.
This means Hot Chili now has only one US$15 million (around A$19 million) payment left in order to own 100 per cent of the Cortadera project, due in mid-July 2022.
Hot Chili said given the first Cortadera resource of 1.7 million tonnes of copper and 1.9 million ounces of gold announced in October 2020, the US$32 million (around A$41 million) price tag makes the Chilean project one of the lowest-cost copper acquisitions across the globe.
Cortadera drilling
On top of hitting the payment milestone, Hot Chili has taken on some more major drilling work across the Cortadera project, with three drilling rigs in operation over the March quarter.
The company kicked off a 40,000-metre programme at Cortadera over the quarter, with both reverse circulation (RC) and deep diamond holes drilled across the project.
From this programme, one of the best results included an 813-metre hit grading 0.4 per cent copper and 0.1 grams per tonne of gold from 54 metres down-hole.
However, Hot Chili said the COVID-19 pandemic continues to impact assay turnaround times, which currently average around one month from the completion of a drill hole to receiving final assays.
As such, the company is still awaiting assay results for around 6700 metres of drilling from the March quarter programme.
Hot Chili said it is on track to deliver a major upgrade to Cortadera’s 451-million-tonne maiden resource later this year.
Hot Chili’s cash position
Taking a look at Hot Chili’s balance sheet, the company spent just over $1.8 million on operating activities over the March quarter.
With around $9.5 million in available cash at the end of March, this gives Hot Chili around 15 months’ worth of funding until the company will need a fresh cash boost.
However, Hot Chili said it has been granted what’s known as a VAT refund exporting benefit from the Chilean government.
Essentially, the refund scheme will give Hot Chili around $4 million back, which the company said will significantly strengthen its cash position in 2021.
Under the terms of the scheme, Hot Chili will need to commercialise production from Cortadera by the start of 2025 and meet certain export targets. If it does not meet these targets, Hot Chili will have to return the refund.
Shares in Hot Chili are trading grey this morning at 3.8 cents each. The company has a $111 million market cap.
