Hot Chili Advances La Verde Discovery While Securing Additional Non-Dilutive Funding

• Drilling at La Verde returned multiple high-grade intersections, including 391 metres grading 0.51% copper equivalent from surface
• OR Royalties provided an additional US$15 million, lifting total non-dilutive royalty funding under the arrangement to US$30 million
• Cash position stood at A$25 million at quarter end, with a further A$21.4 million expected in the coming days
• Costa Fuego's revised Pre-Feasibility Study and Environmental Impact Assessment are being progressed under a single project governance structure
• A community perception study recorded a 93% positive awareness score across the Huasco Valley region

Hot Chili Limited (ASX:HCH, TSXV:HCH, OTCQX:HHLKF) is a Chile-based copper and gold exploration and development company. Its Costa Fuego project, located along the coastal range of Chile's Atacama Region, combines several deposits, including Cortadera, Productora and the more recently discovered La Verde, into a single development plan.

Continued La Verde Drilling Success With Multiple High-Grade Intersections Including 391m at 0.51% CuEq From Surface

La Verde, a copper-gold porphyry deposit within the Costa Fuego project, continued to return drill results through the quarter, with a third drill rig commencing operations in May. Hole DKD044 intersected 391.1 metres grading 0.51% copper equivalent (CuEq) from surface, a measure combining the value of copper, gold, silver and molybdenum in a sample into one comparable grade. Within that interval, a higher-grade zone of 85.4 metres graded 0.61% CuEq from 160 metres depth.

Other holes reported during the quarter included DKP053, which returned 250 metres at 0.50% CuEq from 64 metres depth, and DKP058, which returned 108 metres at 0.54% CuEq from 24 metres depth. Deeper step-out holes DKD049 and DKP028D extended mineralisation along the eastern and western flanks of the deposit at depth.

Assay turnaround extended to more than ten weeks in some cases during the quarter. Hot Chili engaged a second ISO accredited laboratory in response, and turnaround times have since improved. Twenty-one drillholes still have assays pending. A maiden Mineral Resource Estimate for La Verde is expected later this year.

US$15 Million OR Royalties Amendment Agreement Bringing Total Non-Dilutive Royalty Funding to US$30 Million

Hot Chili executed a binding Amended and Restated Investment Agreement with OR Royalties Inc, under which OR will acquire a Net Smelter Return royalty over the La Verde project for a cash payment of US$15 million. A Net Smelter Return royalty entitles the holder to a percentage of future production revenue rather than equity in the Company, meaning the funding does not dilute existing shareholders. This expands the existing 2023 royalty arrangement between the two parties, lifting total consideration under it to US$30 million.

The expanded royalty is equivalent to a 1.12% CuEq Net Smelter Return across payable metals. An updated change of control buyback right was also negotiated as part of the agreement, structured to accommodate Hot Chili's ongoing strategic partnering process, through which the Company continues discussions with prospective partners with support from financial adviser BMO Capital Markets.

Combined with the A$40 million equity raising completed in February 2026, the expected receipt of the additional US$15 million (approximately A$21.4 million) adds to Hot Chili's funding position. At 30 June 2026, the Company held A$25 million in cash with no debt.

Revised PFS and Costa Fuego EIA Advancing in Parallel Under Unified Project Development Governance Framework

Hot Chili has established a dedicated project development team, led by project director David Bayona, to advance Costa Fuego. The revised Pre-Feasibility Study (PFS), which assesses the technical and economic viability of the project, and the Environmental Impact Assessment (EIA), the regulatory review required before construction can proceed in Chile, are being managed under one governance framework covering engineering, permitting and stakeholder workstreams.

The revised PFS, which commenced in May 2026, is assessing incorporation of the La Verde discovery into the Costa Fuego mine plan, as well as a large open-pit mining scenario at Cortadera as an alternative to the underground block cave approach used in the 2025 study. The EIA has been split into two separate applications: one covering the Huasco Water seawater intake system, and one covering the Costa Fuego development itself.

A community perception study completed in June 2026 recorded a 93% "High Positive Awareness" score among respondents in the Huasco Valley. During a state of emergency declared after severe regional rainfall in July, Hot Chili's community team provided water, fuel, food and coal to neighbouring residents.

Milestones and Next Steps

Outstanding assay results from 21 La Verde drillholes are expected in coming months, alongside a maiden Mineral Resource Estimate for La Verde later this year. The revised PFS and EIA 1B continue in parallel, with formal submission of the Costa Fuego EIA targeted for the second quarter of calendar 2027. An update on Huasco Water's second maritime licence application is also expected in the coming months.