Australian Securities Exchange (ASX)-listed mineral exploration company Hot Chili has signed a three-year option deal to acquire a 100% interest in the historical La Verde open-pit copper mine in Chile.
The move marks a key step in the company’s consolidation and growth strategy for its Costa Fuego Coastal Copper Hub in Chile.
Under the agreement, Hot Chili subsidiary Sociedad Minera La Frontera will make an initial non-refundable cash payment of $320,000 (333.12m pesos) to SLM Los Dominiceros una de la Sierra Los Chiqueros (SLM Dominoceros) for the option to acquire the mine.
SLM Dominoceros holds a 100% interest in the concession comprising La Verde.
Additional payments of $680,000 and $1m will be agreed upon within the first and second year, respectively.
The option may be exercised within 36 months for a final payment of $6.89m.
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By GlobalData
La Verde, located in the Domeyko mining district, is nearly 30km south of Hot Chili’s planned Costa Fuego project central processing hub in the Atacama region of Chile.
La Verde has significant historical workings, with previous shallow porphyry copper oxide mineralisation exploited over an 800m strike extent.
However, historical drilling was limited, presenting an opportunity for Hot Chili to explore the potential of a much larger porphyry copper deposit.
Hot Chili has already begun exploration programmes in the Domeyko region, beginning in April this year, including due diligence over the La Verde area.
The La Verde option agreement is a significant step, as it marks the first time the entire La Verde porphyry system has been under single-party control, allowing for comprehensive drill testing.
The company anticipates receiving the first assay results and will provide further updates as exploration drilling at La Verde progresses.
It has A$25.7m ($16.8m) in cash to complete the Costa Fuego pre-feasibility study (PFS), environmental impact statement, Huasco Water PFS, port upgrade studies and its planned regional growth drilling programmes.
In May this year, Hot Chili announced a private placement to fund the Costa Fuego PFS and its environmental impact assessment.
