Second Porphyry Discovery Confirmed at La Verde

Hot Chili Limited (ASX/TSXV: HCH) has announced that step-out drilling at its La Verde Cu-Au porphyry project in the coastal Atacama region of Chile has identified a second porphyry centre, dubbed "La Verde South." Located 30 km south of the planned Costa Fuego processing hub, the company states this discovery near-doubles the growth potential of the La Verde asset.

The results include significant intercepts from drill hole DKP084, an RC step-out hole collared approximately 250 m south of the existing "+0.4% Cu" mineralisation footprint. This hole serves as a follow-up to prior RC hole DKP024, announced on 19 May 2025. Key intercepts from DKP084 include:

• 148 m grading 0.44% CuEq (0.39% Cu, 0.07 g/t Au) from 36 m; including 44 m grading 0.56% CuEq (0.50% Cu, 0.06 g/t Au) from 138 m.

Another step-out hole, DKD100, was collared approximately 100 m south of DKP084. This DD hole encountered a 307 m down-hole visual interval of copper porphyry-style mineralisation. The oxide zone spans from 40 m to 172 m, characterised by copper clays, malachite, and black copper oxide, while the sulphide zone extends from 172 m to 347 m, featuring disseminated chalcopyrite and A/B/C veining. No assays were reported for DKD100, and drilling is continuing with a planned depth of 500 m.

The company uses a nominal cutoff grade of 0.20% Cu, with internal dilution permitted to greater than 30 m downhole. Copper equivalent grades are calculated using the formula: CuEq% = Cu(%) + 0.69 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0043 x Ag(g/t). This calculation assumes metal prices of $4.50/lb for copper, $3,150/oz for gold, $20/lb for molybdenum, and $30/oz for silver. Recovery rates, based on a Cortadera proxy, are set at 83% for copper, 56% for gold, 83% for molybdenum, and 37% for silver.

Currently, four rigs are operating at the site. Assays are pending for 25 holes, comprising six southern step-out holes and 19 resource definition holes. Assays for DKD100 are expected in December 2026. The company reports that the maiden La Verde Mineral Resource Estimate (MRE), the revised Costa Fuego Pre-Feasibility Study (PFS), and Environmental Impact Assessment (EIA) preparation remain on track.

Hot Chili Limited (HCH) is a pre-resource explorer on La Verde and an established developer on Costa Fuego, which holds a 798 Mt Indicated resource averaging 0.45% CuEq. The March 2025 Preliminary Feasibility Study for Costa Fuego reports a net present value of US$1.20 billion and an internal rate of return of 19%. The company’s market capitalization is approximately A$292 million, classifying it as a small-cap developer rather than a sub-C$25 million micro-cap.

The recent news release concerns drill and step-out discovery results rather than earnings. Prior-period financial context, not disclosed in this release, indicates a FY-2026 net loss of A$10.6 million and cash reserves of A$24.9 million at 30 June 2026. The presentation cites cash of approximately A$46 million at 31 July 2026 and a market capitalization of A$316 million at A$1.55 on 14 September 2026.

On the same southern zone, the prior result was DKP024, which returned 114 meters at 0.4% CuEq on 19 May 2025; the new result, DKP084, improves upon that.

The stock roughly doubled-plus on that discovery but has since round-tripped to $1.44, down approximately 30% from the June high and only approximately $0.05 above the year's mid-point. The stock has been drifting down through the September-October releases. The market is not paying a premium for the current news flow, and La Verde South is a brand-new zone that is entirely unpriced. The anchor is only partially embedded, and the bar this release must clear is moderate, not elevated.

The result is a genuine, unpriced, system-growing step-out, but the substance is a single 148 meters at 0.44% CuEq hole, which is below the porphyry "good" length band, plus a visual-only DD hole. Scale is hinted, not proven.

This enlarges the option on a bigger La Verde system but does not change the resource, the PFS, the mine life, or the NAV today. It is a positive increment, not a transformation.

Hot Chili Limited (ASX/TSXV: HCH; OTCQX: HHLKF), headquartered in Applecross, Western Australia, is a Chile-focused copper-gold developer. Its flagship asset is the Costa Fuego Cu-Au project in the Huasco Valley of coastal Chile, which combines the Cortadera, Productora, Alice, and San Antonio deposits. As of 27 March 2025, the project holds a total Mineral Resource of 798 Mt Indicated at 0.45% CuEq (comprising 0.37% Cu, 0.10 g/t Au, and 0.50 ppm Mo), alongside 203 Mt Inferred at 0.31% CuEq.

A Preliminary Feasibility Study (PFS) released in March 2025 outlined a 20-year mine life, including a 14-year primary phase, with a strip ratio of 1.5. The study projected a start-up capital cost of US$1.27 billion, an internal rate of return (IRR) of 19%, and a post-tax net present value (NPV8) of US$1.20 billion. Operating costs were estimated at C1 US$1.38/lb Cu, with targeted production of 116 kt CuEq per year, scaling to approximately 150 kt Cu.

The company is also advancing La Verde, a Cu-Au porphyry discovery located approximately 30 km south of the planned processing hub. Currently in the pre-resource stage, a maiden Mineral Resource Estimate is pending for 2026, with the area now considered a probable second centre, referred to as La Verde South.

Infrastructure advantages include low elevation and proximity to existing facilities, including a 20 Mtpa concentrator and a 4 Mtpa leach plant at Productora. The site is near the Pan-American highway, powerline, and seawater pipeline corridors, and is supported by Huasco Water, an 80%-owned desalination facility.

The company has approximately 202.7 million shares outstanding and maintains no debt. Funding was secured through an A$40 million placement in February 2026 at A$1.65 per share, and a US$15 million options and royalties non-smelter royalty (NSR) top-up, bringing the total raise to US$30 million for approximately 1.12% CuEq NSR on La Verde. Major holders include Glencore, GS Group, and Blue Spec.

The project timeline targets an Environmental Impact Assessment (EIA) submission in the second quarter of 2027, a final investment decision (FID) in 2029, and first production in 2031.