Hot Chili Quarterly Update - September 30 2025

• Entitlement offer fully subscribed, raising A$14.1 million before costs
• Phase two diamond drilling commenced at La Verde on 22 September 2025, with three holes completed
• Regulatory approval received in October 2025 for expanded drill coverage at La Verde
• Strategic partnering process continues with BMO Capital Markets as financial adviser
• Cash position of A$13.8 million with no debt at quarter end

Hot Chili Limited (ASX: HCH, TSXV: HCH, OTCQX: HHLKF) is an Australian-based company focused on copper-gold exploration in Chile's Atacama region. The company holds the Costa Fuego copper project, which comprises the Cortadera, Productora, Alice and San Antonio deposits, along with the recently discovered La Verde copper-gold porphyry system located 30 kilometres south of Costa Fuego.

Capital Raising and Financial Position

Hot Chili completed a non-renounceable entitlement offer in early September 2025, raising A$14.1 million before costs. The offer was structured as two new shares for every 13 held at A$0.60 per share, with the 8 August 2025 record date. The company reported demand from Australian, Canadian and international shareholders.

At quarter end, Hot Chili reported cash of A$13.8 million and no debt. The company stated that proceeds from the entitlement offer, combined with existing treasury, will fund completion of the strategic partnering process, diamond drilling at La Verde and general working capital.

The quarterly cash flow report showed operating cash outflows of A$2.1 million and investing activities of A$2.9 million, which included A$2.4 million for exploration and evaluation and A$544,000 for tenement payments. The company estimates 6.72 quarters of funding available based on current expenditure rates.

La Verde Discovery - Phase Two Diamond Drilling Programme

Diamond drilling commenced at La Verde on 22 September 2025 with one drill rig operating on a double-shift basis. The phase two programme follows a 10,000 metre reverse circulation drilling programme that identified a copper discovery footprint measuring 1,000 metres by 750 metres, extending to 400 metres vertical depth. Over half of the first-pass drill holes ended in significant mineralisation at the capacity of RC drilling.

Three diamond drill holes have been completed to date. The company reported that all three holes visually recorded wide intersections of porphyry-style copper mineralisation, with assay results pending. The drilling targets depth extensions to three high-grade centres identified in phase one.

In early October 2025, Hot Chili received regulatory approval to expand drill coverage across La Verde. This approval provides access to test lateral and along-strike extensions of the La Verde footprint and enables first-pass drilling of three nearby targets. The company is planning to deploy a second RC drill rig to accelerate phase two drilling. Baseline environmental studies for a second Environmental Impact Assessment are ongoing.

Strategic Partnering Process Advancement

Hot Chili initiated an asset-level strategic partnering process following completion of pre-feasibility studies for Costa Fuego and Huasco Water projects. The stated objective is to introduce one or more partners with financial, technical and operational capability to assist in funding and delivering the projects. BMO Capital Markets has been appointed as financial adviser for the process.

The company reported receiving significant additional interest during the quarter. Hot Chili stated it is assessing a range of non-binding, indicative, incomplete and conditional proposals related to potential transactions. The quarterly report noted that there is no certainty the partnering process will result in a transaction or binding agreement.

The March 2025 pre-feasibility study for Costa Fuego outlined funding requirements of approximately US$1.27 billion, including pre-production capital, working capital and assumed financing charges. The study noted that funding availability remains a key assumption and that such funding may only be available on terms that could be dilutive to existing shareholders.

Next Steps

Hot Chili is awaiting assay results from the three completed diamond drill holes at La Verde. The company plans to continue phase two drilling with the addition of a second RC drill rig following the October 2025 regulatory approval for expanded coverage. Drilling is expected to test lateral extensions of the known mineralisation and conduct first-pass drilling on three additional targets.

The strategic partnering process remains ongoing, with the company committed to updating the market in accordance with continuous disclosure obligations. Environmental baseline studies are continuing to support potential integration of La Verde into Costa Fuego's mine plan.

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