Hot Chili Launches A$14M Rights Issue for Partnership Process and Drilling Programme

• Non-renounceable rights issue offering 2-for-13 shares at A$0.60, priced 3.4% above last trading price of A$0.58 
• Proceeds will fund completion of asset-level strategic partnering process for Costa Fuego and Huasco Water projects 
• Capital will finance phase-two diamond drilling at La Verde copper-gold discovery for maiden resource estimate 
• Company currently assessing multiple nonbinding proposals with BMO Capital Markets as financial adviser 
• Offer opens 13 August 2025, closes 2 September 2025, with new shares issued 9 September 2025

Hot Chili Limited (ASX: HCH) is an Australian copper-gold development company focused on advancing its flagship Costa Fuego project in Chile's Atacama region. The company's primary asset is the Costa Fuego project, for which it completed Pre-feasibility Studies in March 2025. The studies outlined a 20-year project life with annual copper equivalent production of 116,000 tonnes over the first 14 years.

The company holds additional assets including the Huasco Water project and the La Verde discovery. Hot Chili completed phase-one drilling at La Verde in April 2025, comprising 31 reverse circulation drill holes totalling 9,600 metres. Results defined mineralisation across a 1,000 by 750-metre footprint extending to 400 metres vertical depth.

Use of Proceeds

The company will allocate proceeds primarily to complete its strategic partnering process. Following completion of Pre-feasibility Studies for Costa Fuego and Huasco Water, Hot Chili initiated asset-level strategic partnering processes to identify partners with financial and operational capability to assist project development. The company has appointed BMO Capital Markets as financial adviser for this process.

Hot Chili confirmed it is currently assessing several nonbinding, indicative and conditional proposals. The partnering process may result in various transaction structures for the projects. The company stated there is no certainty the process will result in a binding agreement or transaction.

The remaining proceeds will fund phase-two diamond drilling at the La Verde discovery, located 30 kilometres south of Costa Fuego's planned processing hub. The drilling programme aims to establish a maiden mineral resource estimate. Phase-one drilling identified multiple higher-grade centres, including 308 metres grading 0.5% copper and 0.3 grams per tonne gold from 46 metres depth, with 100 metres grading 0.7% copper and 0.3 grams per tonne gold from 118 metres depth.

Summary and Next Steps

Hot Chili's A$14 million rights issue will fund completion of its strategic partnering process and advance drilling at the La Verde discovery. The company is evaluating multiple partnership proposals for its Costa Fuego and Huasco Water projects, though no binding agreements are in place. Planned diamond drilling at La Verde aims to establish a maiden resource estimate, building on phase-one results that identified extensive copper-gold mineralisation. The offer closes 2 September 2025, with new shares to be issued 9 September 2025.

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