Huasco water is strategic and the differentiating factor to other junior mining projects.
In Chile taking out ground water for mining is not allowed. So where are the multiple developing mining projects in the Atacama region going to get their water from? HCH has one of only two maritime licences ever issued and shows the foresight of the management in Chile to get this while the mega-caps were asleep. I have confidence that the same team in Chile will succeed in getting the desalination licence. Yes there can be other applications for maritime licences but this will take a long time to be issued and will push back mining / cash flow generation which nobody wants.
There are now similar discussions in Argentina about the water table and restricting the use of ground water for mining. There are many projects on the Argentine side where it would be more economical to get the desalinated sea water from Huasco than from Argentina's Atlantic coast
A commentator here mentioned that Huasco value is 5% of what Antofagasta sold. He gets this from a video interview with a mining analysts where the low market cap of Hot Chile was discussed and the analyst was making an example that even at such a low % compared to Antofagasta, that is till nearly $30 million addition to market cap which is not at all priced in. The real value could be much much more and equivalent to Antofagasta water business.
The Huasco prospects on their own are enough for me to invest in Hot Chile at current market cap. Water desalination and pipelines are a strategic infrastructure asset with endless supply from the sea.
HCH Price at posting:
53.0¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)