PERTH (miningweekly.com) – Chile-focused metals developer Hot Chili will raise A$3.2-million through a share placement and rights issue, while making a move to consolidate the tenements surrounding its Productora copper project.

Hot Chili on Monday announced that it would raise A$1-million through a private placement to sophisticated and professional investors, at an issue price of 1c each.

The company would also raise A$2.2-million through a non-renounceable entitlement offer, on the basis of two-for-seven, also at an issue price of 1c a share.

Hot Chili told shareholders that the funds would allow the company to focus on preparations to start drilling across key areas of the Cortedera discovery over the coming months, while also advancing project-level strategic funding discussions with stakeholders over the transaction with Chilean mining group SCM Carola.

Hot Chili on Monday revealed details of the potential transaction with Carola, to acquire the Cortadera copper/gold porphyry discovery, which adjoins the Productora and El Fuego copper projects.

The successful acquisition of Cortadera would provide immediate critical mass required to develop a new large-scale, long-life copper mine, Hot Chili said, transforming the company into a premier copper developer.

“We are very pleased to have agreed to the key commercial terms for an option to acquire 100% of Cortadera for incorporation into a single larger development with Productora, taking advantage of planned central processing facilities,” said Hot Chili MD Christian Easterday.

“Cortedera looks likely to provide the immediate critical mass required to develop a new large-scale, long-life coastal copper mining center which leverages off existing infrastructure advantages already secured with Hot Chili’s joint venture partner at Productora, Chilean mining major Compania Minera Pacifica.”

Easterday noted that along with the recent consolidation of other high-grade satellite copper mines in the area, the company had assembled agreements to consolidate a world-class regional copper camp.

Under a memorandum of understanding (MoU) with Carola, Hot Chili could acquire the Cortadera project for $30-million, payable in three tranches.

The buy will be subject to Hot Chile securing project-level funding, as well as shareholder approval.

In addition to the Carola MoU, Hot Chili has also inked an option agreement with Sociedad Legal Minera Purisima Una Sierra La Cortadera, over the Purisima mining right.

The company was hoping to obtain the Purisima mining right for $1.5-million, payable in installments, and a 1.5% net smelter royalty over any future production from the Purisima mining right.

The option agreement, along with the Carola MoU, provided Hot Chili with the ability to consolidate the entire Cortadera discovery.