Hot Chili cashes in on mounting interest, raises $40m to advance Costa Fuego
Glencore is a cornerstone investor in the raising – kicking-in $14.4 million to secure a 9.99% stake in Hot Chili.
Hot Chili (ASX: HCH) has cashed-in on the mounting interest in its activities at Costa Fuego copper project in Chile with the announcement it plans to raise $40 million.
The $40 million raising will be split into a fully underwritten $4 million share purchase plan and $35 million private placement.
As reported earlier this week, with its $14.4 million investment in Hot Chili, Glencore will be a cornerstoning the placement and will own a 9.99% stake.
New shares were issued at $0.032 each with Veritas Securities and iA Private Wealth of Canada acting as joint lead managers.
This issue price represents an 11.1% discount to Hot Chili’s last closing price prior to entering a trading halt on 2 August. Its also a 11.6% discount to the company’s 15-day volume weighted average price prior to the halt.
Hot Chili noted the raising received strong demand from both Australian and overseas institutional investors.
Use of funds
From the raising $15 million of the funds will be used to secure the final acquisition payment for the Cortadera copper-gold discovery in Chile, which is part of the wider Costa Fuego project and within 10km of the other primary deposit Productora.
The payment will be made immediately and give Hot Chili full ownership.
Remaining proceeds will be used to deliver a major resource upgrade and complete the pre-feasibility study for Cost Fuego.
The project has a current resource of 724Mt at 0.48% copper equivalent for 2.9Mt copper, 2.7Moz gold, 9.9Moz silver and 64,000t of molybdenum.
Productora accounts for 273Mt at 0.52% copper equivalent for 1.2Mt copper, 800,000oz gold and 36,000t molybdenum, while Cortadera contributes 451Mt at 0.46% copper equivalent for 1.7Mt copper, 1.9Moz gold, 9.9Moz silver and 27,000t molybdenum.
Hot Chili managing director Christian Easterday said the $40 million in funding and Glencore’s investment and involvement is a “strong endorsement” of the project’s future.