AUS
NZ
UK
CA
USA
IND
Highlights
- Extended mine life and significant production rates unveiled by (HCH)
- Forecasted revenue and strategic financial planning bolster future operations
- Promising environmental and development advancements position the project favorably
Hot Chili’s (ASX:HCH) has announced promising results from its recent Prefeasibility Study (PFS) for the Costa Fuego Copper-Gold Project, indicating a substantial extension in mine life to 20 years. This development confirms the project's robust potential and promising future in the copper and gold sectors.
The study outlined that for the first 14 years, Costa Fuego is expected to produce an average of 116,000 tonnes per year in copper-equivalent terms, including 95,000 tonnes of copper and 48,000 ounces of gold annually. Over the lifespan of the mine, total production is anticipated to reach 1.5 million tonnes of copper and 780,000 ounces of gold, which translates to a life-of-mine revenue projected at US$17.3 billion.
Financial projections from the study are equally robust, with a post-tax net present value (NPV8%) estimated at US$1.2 billion and an internal rate of return (IRR) of 19%. These figures are set to improve with current high copper prices, as noted by the company, with a potential increase in post-tax NPV8% to US$2.2 billion and an IRR of 30% at a copper price of US$5.30 per pound.
(HCH) has reported that the initial capital cost for starting the project is pegged at US$1.27 billion. This positions the project with a capital intensity of US$14,079 per tonne of average annual copper equivalent produced, highlighting the project's efficiency in terms of capital utilization.
Management at (HCH) remains optimistic about the project’s future, citing the PFS as a solid foundation for entering the final stages of development. The study places Costa Fuego among the top tier of global copper projects due to its significant production capacity and competitive capital intensity.
The company is now focusing on further developing the project through a dual approach: accelerating drilling and environmental activities at La Verde to integrate additional resources and extend the mine's life, and initiating a Definitive Feasibility Study (DFS). A preliminary environmental impact assessment is also slated for submission soon, aiming to keep the project on track for production commencement before the decade's end.
Moreover, recent market conditions have favored copper investments, as highlighted by the recent increase in copper prices, further bolstered by geopolitical moves such as potential new tariffs on copper imports by the US.
(HCH)’s Costa Fuego project not only promises substantial financial returns but also positions the company for strategic partnerships and funding opportunities, ensuring its place as a prominent player in the global copper and gold markets.
