Hot Chili’s flagship project is Costa Fuego, a coastal copper-gold hub in Chile’s Atacama about 600 km north of Santiago. It is made up of Cortadera, Productora, Alice and San Antonio, plus the newer La Verde discovery about 30 km south of the planned processing plant. They also own 80% of Huasco Water, a seawater business that supplies the project and could sell water to others in the valley. In this first-pass interview with the CEO, I asked about the incentives, management’s track record, the history of the asset, and the biggest potential risks for the company’s future.
TL;DR
The 2025 PFS showed about 116,000 t CuEq per year for 14 years, US$1.3B start-up capex, a US$1.2B post-tax NPV8, a 19% IRR and roughly 4.5-year payback at US$4.30 copper and US$2,280 gold. I asked Christian about La Verde and he told me that could add around 500 Mt at about 0.45% CuEq, including roughly 100 Mt above 0.6% CuEq starting at surface, which would feed the early years. In the revised PFS he is aiming for an NPV near US$2.4B, a high-30s IRR, payback under three years and 130,000 to 135,000 t CuEq per year, with capex possibly rising to about US$1.5B. Cortadera gets pushed to around year 20, so the mine becomes mostly open pit. The schedule is EIA submission in Q2 2027, about two years for approval, FID in 2029 and first production in 2031 on a two-year build. They also just confirmed a second porphyry, La Verde South, about 250 m further south, which he thinks could match La Verde in size, but it is early.
What have they done for shareholders lately?
The stock ran from 42 cents after the PFS to about $2.10, then settled into a $1.40 to $2.00 range and sits near C$1.39 today, a C$282M market cap. When I asked why, he pointed to the risk-off market and said peers are down 12% to 23% recently. Insiders, including the founder group, hold under 10%, and he admitted early holders are underwater. He said there are no insider royalties and no golden parachutes, and about half of performance rights are tied to share price. They did a 50:1 consolidation when listing on the TSXV, and shareholders voted down a proposed name change. New board members include Stuart Mathews (ex-Gold Fields) as chair and Fiona Van Maanen. Glencore is a shareholder and holds offtake on 60% of concentrate for the first eight years, conditional on keeping at least 7.5% of the company.
How much money do they have and what are they spending it on?
They raised A$40M in February at A$1.65 with no warrants, then took US$15M from OR Royalties in July by extending the existing royalty to La Verde. He said they had A$43M to A$44M at the last quarterly and estimates about 30 million now, spending quickly on four rigs, the La Verde resource and the revised PFS. He told me the next funding will likely come out of the BMO-run partnering process, not another royalty. For the build, the plan combines a partner with construction and financing capability, prepayment on the 40% of offtake not committed to Glencore, a gold stream (he estimates 60,000 to 70,000 oz per year available), and a staged sale of Huasco Water, which he believes could cover most of the equity side. He said they have received multiple non-binding offers, some parties are in second-stage due diligence, and most interest has been for 100% of the company. OR holds a right of first offer on any future royalty or stream.
Upcoming catalysts
Expect steady drill results from La Verde, with assays now moving through two labs after El Niño rain delays. The maiden La Verde resource is targeted for year-end, but with 25 to 26 holes and about 7,000 m still pending, it could slip into early 2027. He also flagged news on a bulk transport solution between La Verde and the plant, possible approval of Huasco Water’s second maritime licence for desalinated water (late after the change of government), and possible water partners, noting NDAs with nine of the 13 largest water companies. A binding deal from the partnering process could come at any point, followed by the revised PFS around Q1 2027 and EIA submission in Q2 2027.
Risks
By his own account, funding and landing the right partner is the main worry, since equity markets are disconnected from metal prices and money isn’t secured until it’s in the bank. The La Verde numbers above are management targets until the resource and revised PFS are published, and he acknowledged drill intercepts get diluted when converted to tonnes. Moving lower-grade La Verde material 30 km depends on a transport solution still being designed. Chilean permitting is getting slower, the original water licence took 10 years, and the second maritime licence is already delayed. With cash at roughly 30 million and falling, further dilution is possible if partnering takes longer than planned.
Hot Chili CEO Interview
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