Hot Chili arranges $14-million (Australian) financing

Mr. Christian Easterday reports HOT CHILI ANNOUNCES A$14M RIGHTS ISSUE TO SUPPORT COMPLETION OF STRATEGIC PARTNERING PROCESS & MAIDEN LA VERDE RESOURCE ESTIMATE Hot Chili Ltd. will be undertaking a $14-million (Australian) funding, exclusively offered to all eligible shareholders. The $14-million (Australian) funding will be via non-renounceable entitlements offer of new shares on a two for 13 basis, at an issue price of 60 Australian cents per share. The rights issue provides an opportunity for all eligible shareholders to participate in the funding of the company at a pivotal time, removing near-term funding uncertainty and providing a pathway to delivering several transformational catalysts over the coming months, including: Completion of the company's asset-level strategic partnering process: As detailed in the company's recent quarterly report for the period ending June 30, 2025 (released July 29, 2025), following completion of the prefeasibility studies (PFS) for Costa Fuego and Huasco Water, Hot Chili initiated asset-level strategic partnering processes to introduce one or more qualified partners with the financial, technical and operational capability to assist in funding and delivering each project. The partnering process is continuing, and the company confirms it is currently assessing several non-binding, indicative, incomplete and conditional proposals. The partnering process may result in a range of possible transactions for the projects. Investors are cautioned that there is no certainty the partnering process will result in a transaction or binding agreement. The company will keep the market updated in accordance with its continuous disclosure obligations. Hot Chili has appointed BMO Capital Markets as its financial adviser in connection with the partnering process. Commencement of phase 2 diamond drilling at the La Verde copper-gold discovery: The La Verde copper-gold (Cu-Au) discovery is located approximately 30 kilometres south of the company's Costa Fuego Cu-Au project planned central processing hub, at low elevation, in the coastal range of the Atacama region, Chile. The company concluded a phase-one drilling campaign across La Verde on April 10, 2025, with a total of 31 reverse circulation (RC) drill holes (9,600 metres) completed to date. Drill results have defined an extensive plus 0.2 per cent Cu mineralization footprint of 1,000 m by 750 m extending up to 400 m vertical depth and remaining open laterally and at depth. Importantly, multiple distinct higher-grade centres have been confirmed from near surface, with several standout drill results reported including 308 m grading 0.5 per cent Cu and 0.3 gram per tonne Au from 46 m depth to end of hole, which included 100 m grading 0.7 per cent Cu, 0.3 g/t Au from 118 m depth (announced Dec. 18, 2024). Over half of Hot Chili's drill holes have ended in significant mineralzation (at the depth of RC drill rig capability). Planned diamond drilling is expected to facilitate a maiden mineral resource estimate for La Verde, providing near-term, material resource growth and potential front-end, open pit, higher-grade mine life additions for Costa Fuego. Hot Chili's managing director, Christian Easterday, said: "Funding from the rights issue will facilitate another significant upgrade to the company's copper and gold resource base at a time of strong market conditions for both commodities. "A strengthened balance sheet will also provide the company with the necessary funds to complete its strategic partnering process aimed at potentially unlocking asset-level funding for Costa Fuego and Huasco Water. "We are very pleased to exclusively offer to all eligible shareholders, full exposure to both near-term, key catalysts which this funding will support." Details of the rights issue (entitlement offer) The rights issue is a non-renounceable pro rata offer of two fully paid ordinary shares in the company for every 13 existing shares held by eligible shareholders registered at 5 p.m. (AWST) on Aug. 8, 2025 (record date), at an issue price of 60 Australian cents per new share to raise up to approximately $14-million before costs. The entitlement offer will be made pursuant to an offer document under Section 708AA of the corporations act. The offer price represents a 3.4-per-cent premium to the last closing price of the company's shares traded on Australian Securities Exchange on Aug. 4, 2025, of 58 Australian cents and a 4-per-cent discount to the 15-day VWAP (volume weighted average price). The entitlement offer is non-renounceable and is not underwritten. Eligible shareholders who take up their entitlements in full may also apply for additional new shares under the shortfall facility to the entitlement offer. In respect to any potential shortfall to the entitlement offer, the directors of Hot Chili will reserve the right to allocate any, all, or none of the shortfall to sophisticated and professional investors at their discretion. The issue of new shares under the entitlement offer and placement of any shortfall to the entitlement offer to non-related parties of the company is not subject to shareholder approval. The entitlement offer and the placement of any shortfall to the entitlement offer is exclusively managed by Veritas Securities Ltd. as lead manager. Certain insiders of the company are expected to participate in the entitlement offer and as a result, the entitlement offer may constitute a related party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Shareholders in Special Transactions. The entitlement offer is not subject to the formal valuation and minority shareholder approval requirements under MI 61-101 as the entitlement offer is a transaction in which the general body of holders of the company's ordinary shares in Canada are treated identically on a per share basis and the transaction has no interested party within the meaning of MI 61-101. If the entitlement offer is subject to the formal valuation and minority shareholder approval requirements under MI 61-101, the entitlement offer would in any event be exempt from such requirements in reliance upon the exemptions contained in 5.5(a) and 5.7(1)(a), respectively, of MI 61-101 as the fair market value of the entitlement offer, insofar as it involves interested parties, will not be more than 25 per cent of the company's market capitalization. Full details of the entitlement offer are set out in the offer document which will be available for review on the company's website and on SEDAR+ under Hot Chili's issuer profile. Timetable The proposed timetable for the entitlement offer is as shown in the attached table (stated times and dates are times and dates in Perth, Western Australia). Note: These dates are indicative only and subject to change. Subject to the ASX Listing Rules and the policies of the TSX Venture Exchange, the company may vary these dates without notice. In particular, the company reserves the right to extend the closing date and to accept late acceptances either generally or in particular cases. Any extension of the closing date will have a consequential effect on the allotment date of new shares. The commencement of quotation of the new shares on ASX is subject to confirmation from ASX. The listing of the new shares on TSX-V is subject to the approval of the TSX-V. This announcement is authorised by the board of directors for release to ASX and TSX-V. Qualifying statements Qualified person -- National Instrument 43-101 The technical information in this announcement has been reviewed and approved by Christian Easterday, MAIG, Hot Chili's managing director and a qualified person within the meaning of National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. Exploration results -- JORC (Joint Ore Reserves Committee) and ASX The information in this announcement that relates to exploration results for the La Verde project was previously reported in the company's announcements released to ASX on Dec. 18, 2024, "Hot Chili Intersects Significant Copper-Gold, Porphyry-style Mineralisation at La Verde" and May 19, 2025, "Hot Chili Announces Latest Drill Results for La Verde, Doubling Porphyry Discovery Footprint," which are available to view on the company's website. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements. We seek Safe Harbor.