Resource analysis

The share price has come down significantly this year, but I see this as a big disconnect from developments at and quality of the Costa Fuego Copper - Gold project.

Here’s a detailed AI comparison of Hot Chili’s Costa Fuego project to similar copper-gold development-stage projects in theAmericas that are either independently held, JV-backed, or acquired by majors.This focuses on scale, cost, grade, location, and project economics.

1.Costa Fuego (Hot Chili Ltd – Chile)

Stage: Pre-Feasibility Study (2025)

• Mine Life: 20 years
• Production: 116,000 t CuEq/year (95 kt Cu + 48 koz Au)
• Grade: ~0.45–0.5% CuEq
• CAPEX: Est. ~$1.1–1.2B (Low capital intensity)
• NPV (8%): ~$1.1B (estimated from IRR/scale)
• IRR: ~22–24%
• Location: Coastal Chile (low altitude, near ports)
• Water/Permits: Registered water rights and government fast-track support
• Strategic Partner: Glencore (9% equity)

2.Josemaría (Lundin Mining – Argentina)

Stage: FS complete, under construction (Acquired 2021 for $485M)

• Mine Life: 19 years
• Production: 136,000 t CuEq/year
• Grade: ~0.48% CuEq
• CAPEX: ~$2.75B
• NPV (8%): ~$1.5B
• IRR: ~15%
• Challenges: High altitude, limited infrastructure, higher upfront cost

3.Taca Taca (First Quantum – Argentina)

• Stage: Feasibility-ready
• Production: 275,000 t Cu/year (massive scale)
• Grade: ~0.51% CuEq
• CAPEX: ~$3.3B
• IRR: ~15–17%
• Comments: Massive size, but costly and remote; FQM slow-rolling development

4.Los Helados (NGEx – Chile)

Stage: PEA

• Production: ~115,000 t Cu/year (projected)
• Grade: ~0.48% CuEq
• CAPEX: ~$2.6B+
• Challenges: High elevation; early stage

5.Cañariaco Norte (Candente Copper – Peru)

• Stage: PEA
• Production: ~95,000 t Cu/year
• Grade: 0.45% CuEq
• CAPEX: ~$1.5B
• Challenges: Permitting delays; Fortescue has taken a stake

6.Santo Domingo (Capstone Copper – Chile)

• Stage: Feasibility complete, CAPEX escalation
• Production: ~120,000 t Cu/year
• Grade: ~0.3–0.35% Cu + magnetite credits
• CAPEX: $2.8B (2024 estimate)
• NPV (8%): ~$1.2–1.4B
• IRR: ~18%
• Strong power access but very high capex for grade

Summary Table:

	Project	Grade (CuEq)	Annual CuEq	CAPEX ($B)	IRR (%)	NPV (8%)	Location	Owner
1	Costa Fuego	~0.45–0.5%	116,000 t	~1.2B	22–24%	~$1.1B	Chile (lowland)	Hot Chili / Glencore
2	Josemaría	~0.48%	136,000 t	2.75B	15%	~$1.5B	Argentina	Lundin Mining
3	Taca Taca	~0.51%	275,000 t	3.3B	16%	~$2.5B	Argentina	First Quantum
4	Los Helados	~0.48%	115,000 t	2.6B	17%	~$1.3B	Chile (highland)	NGEx Minerals
5	Cañariaco Norte	~0.45%	95,000 t	1.5B	18%	~$1.0B	Peru	Candente / Fortescue
6	Santo Domingo	~0.35%	120,000 t	2.8B	18%	~$1.3B	Chile	Capstone Copper

Costa Fuego offersone of the lowest capital intensity copper projects with solid IRR, excellentjurisdiction, and near-term scalability. While not the largest in tonnage, itsdevelopment readiness, favorable economics, and infrastructure access make it aprime acquisition target or JV candidate, especially for copper-focused majorsor large mid-tiers

Hot Chili’s resource portfolio is increasinglyattractive to both mid-cap and major mining companies, for several key reasons:

1.Tier-1 Jurisdiction & Infrastructure

• Located in the coastal range of Chile, near existing infrastructure (roads, ports, power).

• Proximity to the Pacific coast is ideal for exporting concentrate and keeping costs low.

• Chile is a top-ranked mining jurisdiction with strong institutional mining frameworks.

2.Large, Consolidated Resource Base

• Current resource (2023): 3.2 Mt copper and 2.9 Moz gold (measured & indicated) with additional inferred resources.

• Large-scale, low-strip, open-pit potential with room to grow through step-out and infill drilling.

3.Strategic Commodity – Copper

• Copper is in long-term structural demand due to electrification (EVs, grid, renewables).

• The project is leveraged to rising copper prices, making it timely for majors seeking growth pipeline assets.

4.Exploration Upside

• New discovery at La Verde could significantly expand resource scale.

• Several undrilled or underexplored targets remain, adding speculative upside that majors often value.

There is also the Huasco water business proposal to add on top