Hot Chili takes option on copper project near Costa Fuego
Copper development company Hot Chili has taken another step in its consolidation strategy for the Costa Fuego project, in Chile, with a binding letter of intent (LoI) for an option to acquire Australia-listed Bastion’s Cometa project.
Cometa consists of exploration and mining concessions covering about 56 km2 in the area located about 15 km southwest of Costa Fuego’s planned operating centre and contiguous with Hot Chili landholdings in the region.
The company is focused on upscaling Costa Fuego’s resource base and potential study scale towards 150 000 t/y production profile ahead of the delivery of a prefeasibility study in the second half of next year.
Cometa provides additional optionality for the discovery of further mineral deposits in the project area with the potential to provide supplemental feed and or a longer mine life than laid out in the recently released preliminary economic assessment (PEA).
The June 2023 PEA establishes Costa Fuego as a low-risk, long-life copper project benefitting from a low startup capital and high yearly copper equivalent profile of more than 100 000 t/y for a 16-year mine life, including 95 000 t/y of copper and 49 000 oz/y of gold during the first 14 years of production.
In terms of the LoI, Hot Chili has been granted a 60-day exclusivity period for a due diligence and for its subsidiary, Sociedad Minera La Frontera to enter into a definitive option agreement with Bastion’s subsidiary.
Upon grant of the option, there is a $100 000 nonrefundable cash payment owing, and 12 months later, a $200 000 cash payment.
If the option is exercised, Hot Chili must pay Bastion $2.4-million within 18 months and $3-million within 30 months from the date of the grant of the option.
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