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On 4 February 2019, Hot Chili Limited (ASX:HCH) has disclosed on ASX that it has executed a formal Option Agreement to acquire 100% of a mining right which contains a portion of the Cortadera copper-gold discovery, located 14km directly southeast of the Companyâs large-scale Productora copper project, located at low altitude along Chileâs coastal range. The MOU has outlined key terms for an option to acquire a complete interest in approximately 1.5km of the 2km long Cortadera discovery zone.
The company has further detailed that its wholly owned subsidiary, Frontera SpA, has entered into an Option Agreement with a private Chilean group to acquire a 100% interest in the mining right called Purisima (âPurisima Mining Rightâ), comprising approximately 500m of strike extent across the Cortadera discovery zone.
The Cortadera copper-gold discovery lies 14km directly southeast of Productora and comprises a cluster of three copper-gold porphyry centers extending from the surface to depths of 900m, as currently drill tested. Some 4,000m of the entire 23,231m of diamond drilling (HQ core) completed at Cortadera are contained within the Purisima Mining Right, accounting for one of the three porphyry centers discovered to date.
Significant drilling intersections at Purisima, similar to those announced already, reveal wide copper and gold mineralization from the surface which remains open at depth and along strike.
Under the Option Agreement between Frontera SpA (âFronteraâ - 100% subsidiary of Hot Chili) and Sociedad Legal Minera Purisima Una Sierra La Cortadera, who own the Purisima Mining Right, Frontera has the option to acquire a 100% interest in the Purisima Mining Right over a three-year period on the following terms:
The purchase price to buy the Purisima Mining Right is US$1.5 million, payable in installments as follows:
US$50,000 payable by 14th February 2019,
US$100,000 on the 12-month anniversary of the first payment,
US$250,000 on the 24-month anniversary of the first payment, and
US$1,100,000 on the 36-month anniversary of the first payment.
A net smelter return royalty of 1.5% will be granted across any future production within the Purisima Mining Right. Frontera shall have a first right of refusal to purchase the royalty at agreed commercial terms at any time.
Consolidation of the entire footprint of the discovery zone will allow Cortaderaâs growth potential to be maximized along strike. Within the coming months, Hot Chili plans to commence systematic exploration and resource definition drilling across Cortadera.
Now let us quickly have a look at the companyâs stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $0.014 and is trading up by 27.273% during the dayâs trade, with a market capitalization of ~$8.12 million. The counter opened the day at $0.015, reached a dayâs high of $ 0.018 & touched an Intraday low of $0.014. The stock has yielded a Year Till Date returns of 10% and posted returns of -62.07%, -38.89% & 10% over the past six months, three months & one-month period respectively. It had a 52-week high price of $0.040 and touched 52 weeks low of $0.010, with an average volume of 427,178 approximately.
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