PEA For Costa Fuego Outlines Low Capital Intensity With Major Copper Developments

CHILE - Hot Chile reported that Costa Fuego Copper-Gold Project Mineral Resources scheduled for extraction in the PEA production plan, approximately 97% are classified as Indicated and 3% as Inferred during the 18-year evaluation period. The Company has concluded that it has reasonable grounds for disclosing a production target which includes a small amount of Inferred Mineral Resources. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised. Inferred Mineral Resources comprise 2.5% of the production schedule in the first four years of operation. The viability of the development scenario envisaged in the PEA does not depend on the inclusion of Inferred Mineral Resources.?The Mineral Resources underpinning the production target in the PEA have been prepared by a competent person in accordance with the requirements of the JORC 2012. For full details on the Mineral Resource estimate, please refer to the ASX announcement of 31 March 2022. Hot Chili confirms that it is not aware of any new information or data that materially affects the information included in that release and that all material assumptions and technical parameters underpinning the estimate continue to apply and have not been changed.

To achieve the outcomes indicated in the PEA, including reaching Definitive Feasibility Study ("DFS") stage, funding in the order of US$1.10 Billion will be required, including pre-production and working capital, and assumed financing charges. Investors should note that that there is no certainty that Hot Chili will be able to raise that amount of funding when needed. One of the key assumptions is that the funding for the Project will be available when required. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of Hot Chili's existing shares. It is also possible that Hot Chili could pursue other value realisation strategies such as debt financing, a sale or partial sale of its interest in the Costa Fuego Copper Project, sale of further royalties and/or streaming rights, sale of non- committed offtake rights, and sale of non-core assets.

Managing Director, Christian Easterday, said, "The Costa Fuego PEA cements Hot Chili's position as the largest copper developer listed on the ASX by both resource size and potential scale of copper production. Costa Fuego ranks highly amongst global peer projects1 and stands out as one of the world's lowest capital intensity, major copper developments. The PEA indicates a strong investment case for advancing Costa Fuego to a PFS for what would be a low-cost, low-risk, long-life, large-scale copper project, which is extremely leveraged to both resource growth and copper price appreciation. I am very pleased with our entire teams' effort to deliver the PEA on-time and within guidance and look forward to delivering on our objective to transform Hot Chili into the only 100 thousand tonne copper producer listed on the ASX outside of the control of major miners. We are focused on our next steps in resource growth and the delivery of an optimised and potentially larger project definition for our pre-feasibility study next year. The recently announced US$15 Million investment agreement with Osisko Gold Royalties positions the Company to be fully funded for the next 12 to 18 months to deliver on our growth and development timetable."