Perth-based exploration company Hot Chili (ASX: HCH) has made a final US$15 million (A$20 million) payment to secure ownership rights to the world-class Cortadera copper-gold discovery in Chile.
The company made the payment to Chilean mining group SCM Carola which owns the Cortadera landholding, bringing to a close its commitment to pay a total US$32 million (A$44 million) over three years in consideration for the acquisition.
The payment was made earlier than planned under the terms of a “potentially transformational” option agreement signed between the two companies in 2019 which required Hot Chili to pay for Cortadera in three instalments over a 30-month term.
Managing director Christian Easterday said the early acquisition was an important milestone for the company.
“We are extremely pleased to move to full ownership of Cortadera almost one year ahead of schedule, given the success of our exploration to date,” he said.
“Cortadera is already one of the lowest-cost acquisitions in the copper sector and we believe it has a long way to grow.”
Cortadera is the centrepiece of Hot Chili’s Costa Fuego copper-gold development hub, which contains 724 million tonnes grading 0.48% copper equivalent for 2.9Mt copper, 2.7 million ounces gold, 9.9Moz silver and 64,000 tonnes molybdenum.
It lies 14 kilometres directly southeast of the Productora copper target (which Hot Chili holds in joint venture with Chilean mining major Compania Minera Pacifica) and has demonstrated potential to host a large copper-gold deposit which may be amenable to open pit mining.
Mr Easterday said the acquisition would provide the immediate critical mass required to develop a new large-scale, long-life copper mine.
“Successful completion of this transaction has potential to lay the foundations for the creation of a globally significant new development centred around two bulk tonnage deposits at Productora and Cortadera,” he said.
“The consolidated development could place [us] within the production scale range of the world’s top 30 largest operating copper mines … we believe combining the two makes a lot of sense.”
Mr Easterday said the strategy follows a similar move by Teck Resources and Barrick Gold Corporation at the neighbouring Nueva Unión copper project, which saw the Relincho and El Morro deposits combine to form a more robust and consolidated copper development.