Hot Chili Limited Quarterly Report - Period Ending 30th September 2023

PERTH, Australia, Oct. 31, 2023 /PRNewswire/ - 

Highlights

Hot Chili Files NI 43-101 Technical Report for the Costa Fuego Copper-Gold Project in Chile

• The Company filed the report titled "Costa Fuego Copper Project NI 43–101 Technical Report Preliminary Economic Assessment" ¹ and dated August 2023, with an effective date of June 28, 2023 (the "Technical Report"), prepared pursuant to CIM National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101")
• The Technical Report supported the Costa Fuego PEA news release dated 28 June 2023, outlining Costa Fuego as one of world's lowest capital intensity, major copper developments, not controlled by a major miner ¹

Closing of US$15 Million Investment Agreement with Osisko Gold Royalties

• Closing of an Investment Agreement (see announcement dated 28^th July 2023) and the receipt of US$15 million in funds in late July 2023
• Strong endorsement from a leading North American royalty-streaming group with funds being used to advance the growth and development of Costa Fuego

Water Business Conceptual Study Underway

• Potential to monetise water assets while securing water for Costa Fuego adds further non-dilutive funding optionality for Hot Chili

Drilling Programme Underway at Costa Fuego

• Drilling operations re-commenced, initially focused on extensional targets to the Cortadera porphyry resource
• First drilling underway at the Corroteo target, located 5km SE of Cortadera

Further Regional Consolidation Steps

• Binding letter of intent executed for an Option to acquire the Cometa Project, lying contiguous to the Company's Costa Fuego landholding (see announcement dated 28^th August 2023)
• Further opportunities being pursued to expand the scale of the Costa Fuego copper hub

Strong Cash Position of A$21.8 million

Cautionary Statement – JORC Code (2012)

SUMMARY OF OPERATIONAL ACTIVITIES

Hot Chili Files NI 43-101 Technical Report for the Costa Fuego Copper-Gold Project in Chile

The Company filed the report titled "Costa Fuego Copper Project NI 43–101 Technical Report Preliminary Economic Assessment"¹ dated August 2023, with an effective date of June 28, 2023 (the "Technical Report"), prepared pursuant to CIM National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43- 101").

As outlined in the announcement dated Wednesday 28 June 2023 titled "Hot Chili Announces PEA for Costa Fuego", highlights from the Technical Report include:

• Strong Economics: Costa Fuego PEA delivers using an 8% discount rate and long-term metal price assumptions of US$3.85/lb copper (Cu) and US$1,750/oz gold (Au)
• Base-case post-tax Net Present Value (NPV_8%) of US$1.10 Billion (approximately, within a range of US$733 Million to US$1.46 Billion) and Internal Rate of Return (IRR) of 21% (approximately, within a range of 17% to 25%)
• Low Start-up Capital: US$1.05 Billion estimated, resulting in fast 3.5-year payback. Initial phases of open pit mining fully fund development of a bulk underground operation
• Low Capital Intensity: One of the lowest capital intensities of global copper development projects
• Approximately 112 ktpa Average CuEq² Production Rate: Including 95 kt Cu and 49 koz Au during primary production (first 14 years) at C1 Cash Cost³ of US$1.33/lb (estimated, net of by- product credits)
• Initial Mine Life: 16-years with 1.41 Mt Cu and 718 koz Au produced for total revenue of approximately US$13.52 Billion and total free cash flow of approximately US$3.28 Billion (post-tax, after operating costs, capital costs, and royalties)

Key Development Study Workstreams Advancing

Approximately 80% of Pre-feasibility Study (PFS) workstreams for Costa Fuego are already complete. Since completion of the PEA in late June 2023, the Company's development expenditure has been focused on advancing key long lead-time study items, such as:

• Hydrogeology Drilling and Water Monitoring Programme: Eleven water monitoring wells for a total of 557m of drilling have been completed at Cortadera and Productora over the past month. Water and groundwater monitoring data is a key input requirement for the Company's Environmental Impact Assessment (EIA), which requires a minimum of one year of water monitoring data from down-stream water catchments. The data from this programme is one of the few remaining inputs required in advance of submission of an EIA for Costa Fuego.
• Low-grade Leach Metallurgy Programme: Bulk samples, including 19 tonnes of underground ore from Productora and 3 tonnes of drill core from Cortadera, have been collected and sent to Nova Mineralis in Chile for preparation and long-duration column leach testwork using intermediate bulk containers. In addition, a further 1.5 tonne of drill core was collected for variability leach testwork using 1m columns. Long lead-time, leach recovery testwork is now underway to support PFS level metallurgy results for this component of Costa Fuego's process flow sheet.

Water Business Conceptual Study Underway

Hot Chili has initiated a conceptual study of the Company's water assets (water easements, maritime concession and associated coastal land access rights) and their potential to underpin a future water utility business for the Huasco region of the Atacama, Chile.

Hot Chili controls one of the few registered maritime concessions in the region, and there is no other major water utility provider in the Huasco Valley.

Hot Chili's water licence for the extraction of 2,000 litres per second of sea water (maritime concession) can be expanded and is transferable. The Company is also assessing the application for the licence to be upgraded to include the supply of de-salinated water.

Based on the Technical Report, Costa Fuego is estimated to require approximately 600 litres per second of sea water at its current study scale of future annual metal production (95ktpa Cu & 49koz Au).

A large new water supplier could help to unlock multiple undeveloped mining projects in the Huasco Valley that do not currently have access to water supply. New mine developments are driving a forecast water supply deficit, which has been estimated at approximately 15,000 litres per second for the Atacama region.

The opportunity to potentially monetise a portion of the Company's Chilean water assets, while also securing future seawater supply for the Costa Fuego Projects, may add further non-dilutive funding optionality for Hot Chili.

Exploration Drilling Underway at Costa Fuego

Drilling re-commenced at Costa Fuego in late July 2023 with one Reverse Circulation (RC) drill rig in operation for the majority of the quarter. In addition, four diamond drill holes were completed over a four-week period (two completed during the quarter). Drilling expenditure is being prudently managed to maximize the impact of invested dollars, with only one RC drill rig planned to be operating for the remainder of this year.

A total of 26 holes for 6,442m of drilling was completed during the quarter with numerous low-grade significant intersections recorded. Tables 1 and 2 summarise details of drilling undertaken during the quarter and significant drill results received to date, respectively.

Drilling initially focused on satisfying the Company's remaining 3,000m drill commitment with Antofagasta Minerals (see announcement dated 28th November 2022) to acquire key leases lying along the western extension of Cortadera. In addition, numerous drill holes have been completed across extensional targets to the Cortadera resource, peripheral to Cuerpo 2 and Cuerpo 3.

Drill holes CRP0220 and CRP0222 have confirmed extensions to the south and east of Cuerpo 2, and drill hole CRP0217D has confirmed further extensions to the east at Cuerpo 3. These new results will add to other potential additions to the Cortadera Mineral Resource Estimate from drilling undertaken since March 2022. Further drill results from drilling undertaken during the quarter at Cortadera are pending.

Following completion of a limited hydrogeology drilling programme (11 RC holes for 557m) during October, RC drilling operations commenced at the large-scale Corroteo exploration target, located approximately 5km SE of Cortadera. A total of seven deep RC holes for approximately 2,000m are planned in the current first- pass exploration drill programme at Corroteo.

Corroteo features a surface alteration footprint measuring approximately 2km in strike length by 500m in width and has never previously been drilled. Detailed mapping and surface geochemical programmes confirm some similarities to the deposit style and footprint of the Company's Productora copper-gold resource.

Corroteo is one of several exploration targets being advanced toward first drill testing over the coming year.

SUMMARY OF CORPORATE ACTIVITIES

Closing of US$15 Million Investment Agreement with Osisko Gold Royalties

In late July 2023, Hot Chili closed its previously announced transaction with Osisko Gold Royalties Ltd ("Osisko"), pursuant to which Hot Chili received proceeds of US$15 million in exchange for the sale of a 1.0% Net Smelter Return (NSR) royalty on copper and a 3% NSR royalty on gold (the "Investment") across the Company's Costa Fuego Copper-Gold Project.

The Investment by Osisko has strengthened the Company's current cash position without the need for a dilutive equity capital raise, demonstrated strong look-through value of the Project's economics. It also provided another significant endorsement of Hot Chili's Costa Fuego project from one of North America's leading royalty-streaming groups (see the Company's announcement dated 28th June 2023, entitled "Hot Chili Announces US$15 Million Investment Agreement with Osisko Gold Royalties").

The Company is now well funded to deliver the next steps in its growth and development plan to advance the Costa Fuego Pre-Feasibility Studies (PFS), resource growth drilling programmes and general advancement of the Project.

Further Regional Consolidation Steps

In late August, the Hot Chili executed a binding letter of intent ("LOI") with Bastion Minerals Limited (ASX: BMO) ("Bastion") for the grant to Hot Chili of an Option to acquire 100% of Bastion's Cometa Project in Chile ("Cometa"), located near Costa Fuego (see announcement dated 28th August).

Cometa consists of exploration and mining concessions covering an area of approximately 56km2, located almost 15km SE of Costa Fuego's planned operating centre and contiguous with Hot Chili's landholdings in the region (see Figure 1 below).

The Option is another step in Hot Chili's consolidation strategy for the Costa Fuego copper project.

Cometa provides additional optionality for the discovery of further mineral deposits in the Costa Fuego Project area, with the potential to provide supplemental feed and/or a longer mine life to the project laid out in the Company's PEA.

The material terms of the LOI are as follows:

• Exclusivity period of 60 days for Hot Chili to conduct due diligence and for Hot Chili's subsidiary Sociedad Minera La Frontera SpA ("Frontera") to enter into a definitive Option agreement with Bastion's subsidiary SCM Cornet Constelación, the holder of a 100% interest in the concessions comprising Cometa, for the grant to Frontera of an option to acquire a 100% interest in the Cometa concessions ("Option").
• Non-refundable cash payment of US$100,000 to Bastion upon grant of the Option.
• Non-refundable cash payment of US$200,000 within 12 months from the grant of the Option to keep the Option in good standing.
• Option may be exercised within 30 months of the date of grant.
• If the Option is exercised, the consideration payable to Bastion to purchase the Cometa concessions is:
  • US$2,400,000 if the Option is exercised by Hot Chili within 18 months from the date of grant of the Option; or
  • US$3,000,000 if the Option is exercised by Hot Chili within 30 months from the date of grant of the Option.
• Hot Chili may elect to satisfy the purchase consideration in cash (100%), or in cash (50%) and ordinary shares of Hot Chili (50%) issued at a price per share equal to the 15-day VWAP at the date of exercise of the Option, subject to applicable regulatory approvals, including the approval of the TSX Venture Exchange ("TSXV").

The Company has recently agreed to an extension of the Exclusivity period by 45 days to allow for completion of due diligence in advance of exercise of the Option, expected by mid-December 2023.

Further opportunities are being pursued to expand the scale of the Costa Fuego copper hub, with multiple discussions underway on prospective exploration targets in the area.

Sustainability

The Company has continued local community engagement, holding several meetings with stakeholders and local indigenous communities. Continued support programs in the Vallenar municipality delivering water to irrigation, funding for social programmes and the development of counselling programmes for mental health support in partnership with the University of Chile.

A spring flora and vegetation survey was carried out on the entire Costa Fuego Project footprint, focused on strengthening the environmental baseline information for the EIA submission.

As the Company advances the Costa Fuego Project, it continues to focus on innovative techniques to minimise the environmental impact of the development, including the use of renewable energy for the delivery of power and the use of sea water for processing.

Cash Position and Capital Structure Changes

As of 30 September 2023, the company had cash of A$21.8 million and no debt.

The Company issued 345,000 service rights and 345,000 performance rights during the period to employees and consultants.

The Company has the following securities on issue:

• 119,445,206 ordinary fully paid shares
• 10,900,000 warrants at CAD$2.50 expiring 31 January 2024
• 1,259,789 options at CAD$1.85 expiring 31 January 2025
• 1,850,001 AUD$2.25 options expiring 30 September 2024
• 5,996,728 unvested services and performance rights.

Table 1 – Significant Drill Results for Costa Fuego in Quarter 3 2023

Table 2 - Drill Holes Completed for Costa Fuego in Quarter 3 2023

Additional ASX Disclosure Information

ASX Listing Rule 5.3.2: There was no substantive mining production and development activities during the quarter.

ASX Listing Rule 5.3.3 - Schedule of Mineral Tenements as of 30 September 2023

The schedule of Mineral Tenements and changes in interests is appended at the end of this activities report.

ASX Listing Rule 5.3.4: Reporting under a use of funds statement in a Prospectus does not apply to the Company currently.

ASX Listing Rule 5.3.5: Payments to related parties of the Company and their associates during the quarter per Section 6.1 of the Appendix 5B totaled $166,458. This is comprised of directors' salaries and superannuation of $166,458.

Health, Safety, Environment and Quality

Field operations during the period included geological reconnaissance activities, core-testing and logging, field mapping, and sampling exercises across the Cortadera, El Fuego and Productora landholdings. El Fuego field activities are run from the Cortadera operations centre and safety statistics are combined for reporting.

No safety incidents were recorded during the quarter. The Company's HSEQ quarterly performance is summarised in Table 3 below.

Hot Chili's sustainability framework ensures an emphasis on business processes that target long-term economic, environmental and social value. The Company is dedicated to continual monitoring and improvement of health, safety and the environmental systems. There is no greater importance than ensuring the safety of our people and their families.

Table 3 HSEQ Quarter 3 2023 Performance and Statistics

Tenement Changes During the Quarter

During the Quarter, the Company has claimed the exploitation concession Chilis 12 1/60 in use of the preferential right held by virtue of exploration concession Chilis 12 and renewed the following mining exploration concessions:

• Chilis 13 replaces Chilis 13, which expired on August 9th, 2023,
• Chilis 14 replaces Chilis 14, which expired on August 19th, 2023,
• Chilis 15 replaces Chilis 15, which expired on July 29th, 2023,
• Chilis 16 replaces Chilis 16, which expired on August 17th, 2023,
• Chilis 17 replaces Chilis 17, which expired on July 29th, 2023,
• Chilis 18 replaces Chilis 18, which expired on August 25th, 2023,
• Porfiada G replaces Porfiada G, which expired on August 23rd, 2023,
• Porfiada V replaces Porfiada V, which expires on October 26th, 2023 and
• Porfiada VI replaces Porfiada VI, which expires on November 19th, 2023.

The Company's existing tenements are detailed in the table below.

Table 4 Current Tenement (Patente) Holdings in Chile as of 30 September 2023

Cortadera Project

Productora Project

El Fuego Project

Qualifying Statements

Costa Fuego Combined Mineral Resource (Effective Date 31st March 2022)

Competent Person's Statement - Exploration Results

Exploration information in this Report is based upon work compiled by Mr Christian Easterday, the Managing Director and a full-time employee of Hot Chili Limited whom is a Member of the Australasian Institute of Geoscientists (AIG). Mr Easterday has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a 'Competent Person' as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (JORC Code). Mr Easterday consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Disclaimer

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this report.

This report is to be used by the recipient for informational purposes only and does not purport to be complete or contain all the information that may be material to the current or future business, operations, financial condition, or prospects of Hot Chili Limited ("Hot Chili" or the "Company"). Each recipient should perform its own independent investigation and analysis of Hot Chili, and the information contained in this report is not a substitute therefore. Hot Chili makes no representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this report or in any other written or oral communication transmitted to any recipient by any party. Except for liability that cannot be disclaimed by law, by accepting this Document, the recipient agrees that neither Hot Chili nor any of its officers, directors, employees, or representatives has any liability for any representations or warranties, express or implied, contained in, or for any omissions from, this report or any such other written or oral communication from any person.

Certain information contained herein is based on, or derived from, information provided by independent third-party sources. Hot Chili believes that such information is accurate and that the sources from which it has been obtained are reliable; however, Hot Chili has not independently verified such information and does not assume any responsibility for the accuracy or completeness of such information.

This report should not be considered as a recommendation from any person to purchase any securities. Each person for whom this report is made available should consult its own professional advisors in making its own independent investigations and assessment and, after making such independent investigations and assessments, as it deems necessary, in determining whether to proceed with any investment in the Company.

Technical Report

For readers to fully understand the information in this report, they should read the PEA Technical Report prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") (available on www.sedar.com or at www.hotchili.net.au) in its entirety, including all qualifications, assumptions, limitations and exclusions that relate to the information set out in this report that qualifies the technical information contained in the Technical Report. The Technical Report is intended to be read as a whole, and sections should not be read or relied upon out of context. The technical information in this report is subject to the assumptions and qualifications contained in the Technical Report.

Qualified Persons – NI 43-101

The Technical Report was compiled by Wood Australia Pty Ltd with contributions from a team of independent Qualified Persons within the meaning of Canadian Securities Administrators' National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43 - 101"). The scientific and technical information contained in the Technical Report pertaining to Coast Fuego was reviewed and verified by the following independent qualified persons within the meaning of NI 43-101:

• Ms Elizabeth Haren (MAUSIMM (CP) & MAIG) of Haren Consulting – Mineral Resource Estimate
• Mr Dean David (FAUSIMM (CP)) of Wood Pty Ltd – Metallurgy
• Mr Piers Wendlandt (PE) of Wood Pty Ltd – Market Studies and Contracts, Economic Analysis
• Mr Jeffrey Steven (PE) of Wood Pty Ltd – Capital and Operating Costs
• Mr Anton von Wielligh (FAUSIMM) of ABGM Consulting Pty Ltd – Mine Planning and Scheduling
• Mr Edmundo Laporte (PE) of GAC – Environmental Studies, Permitting and Social or Community Impact
• Mr Dave Morgan (PE) of Knight Piésold – Project Infrastructure (TSF)

The independent qualified persons have verified the information in the Technical Report, including the sampling, preparation, security, and analytical procedures underlying such information.

Disclosure regarding mine planning and infrastructure has been reviewed and approved by Mr Grant King, FAUSIMM, Hot Chili's Chief Operations Officer, and a Qualified Person within the meaning of NI43-101.

Competent Persons – JORC

The information in the Technical Report that relates to Mineral Resources for the Costa Fuego Project is based on information compiled by:

• Ms Elizabeth Haren (MAUSIMM (CP) & MAIG) of Haren Consulting – Mineral Resource Estimate
• Mr Dean David (FAUSIMM (CP)) of Wood Pty Ltd – Metallurgy
• Mr Piers Wendlandt (PE) of Wood Pty Ltd – Market Studies and Contracts, and Economic Analysis
• Mr Jeffrey Steven (PE) of Wood Pty Ltd – Capital and Operating Costs
• Mr Anton von Wielligh (FAUSIMM) of ABGM Consulting Pty Ltd – Mine Planning and Scheduling
• Mr Edmundo Laporte (PE) of GAC – Environmental Studies, Permitting and Social or Community Impact
• Mr Dave Morgan (PE) of Knight Piésold – Project Infrastructure (TSF)

Ms Haren, Mr David, Mr Wendlandt, Mr Steven, Mr von Wielligh, Mr Laporte and Mr Morgan have sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves' and as Qualified Persons under NI43-101.

For further information on the Costa Fuego Project, refer to the technical report titled "NI 43-101 Resource Report for the Costa Fuego Copper Project Located in Atacama, Chile", dated May 13, 2022 with an effective date of March 31, 2022, which is available for review on SEDAR (www.sedar.com) under Hot Chili's issuer profile.

Cautionary Note for U.S. Investors Concerning Mineral Resources

National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") is a rule of the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Technical disclosure contained in this report has been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification System. These standards differ from the requirements of the U.S. Securities and Exchange Commission ("SEC") and resource information contained in this press release may not be comparable to similar information disclosed by domestic United States companies subject to the SEC's reporting and disclosure requirements.

All amounts in this report are in U.S. dollars unless otherwise noted.

Non IFRS Financial Performance Measures

"C1 cash cost" is not performance measures reported in accordance with International Financial Reporting Standards ("IFRS"). These performance measures are included because these statistics are key performance measures that management uses to monitor performance. Management uses these statistics to assess how the Costa Fuego Project compares against its peer projects and to assess the overall effectiveness and efficiency of the contemplated mining operations. These performance measures do not have a meaning within IFRS and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS.

Scientific and Technical Information

The scientific and technical information contained in this document was reviewed and approved by Ms Kirsty Sheerin, a Member of the Australian Institute of Geoscientists, Hot Chili's Resource Development Manager and a qualified person for the purposes of National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

Ms Sheerin has undertaken extensive data verification and is satisfied with the exploration, sampling, security, and QA/QC procedures employed by Hot Chili for Costa Fuego and that their results are sufficient to produce data suitable for the purposes desc ribed in the Technical Report, as well as for public reporting purposes subsequent to the technical report.

Sampling, Analysis and Data Verification

A fixed cone splitter was used to create two nominal 12.5% samples (Sample "A" and "B"), along with the large bulk reject sample. The "A" sample is always taken from the same sampling chute, and comprises the primary sample submitted to the laboratory. The "B" samples were retained for use as the field duplicate sample. The coarse residues were collected into large plastic bags and were retained on the ground near the drillhole collar, generally in rows of 50 bags.

All RC drillhole sampling was executed at two metre intervals for Costa Fuego. Within logged mineralisation zones, the 2-metre sample ("A" sample) was submitted. Outside the main mineralised zones (as determined by the logging geologist), 4-metre composites were created from scoops of 2-metre sample residues over this interval. The composited 4-metre samples were analysed first and, if required, the individual and original 2-metre "A" samples comprising this 4-metre interval were sent for analysis. This ensured that no mineralisation was missed while minimising analytical costs. The same procedure was applied to RC drilling undertaken across Productora, however, drillhole sampling was executed at 1-metre intervals.

At Costa Fuego, the majority of diamond core has had systematic half-core sampled at 2-metre intervals. Half-core was chosen as the preferred sampling method to ensure a representative sample was submitted for analysis, while also retaining half-core for review of lithology and mineralisation, and for further test work as required.

Prior to the cutting and sample process, two additional samples are also taken for Costa Fuego being Density and Geotechnical samples.

• Density samples are selected based on the deposit type. For Productora this was completed every 5m on drill core, for Cortadera it was every 30 metres, and for San Antonio a total of 107 measurements across 44 drillholes, if the geological conditions allowed it and wereprovided to the laboratory for testwork.
• Geotechnical samples are taken for tests including triaxial (one sample per 250 m) and uniaxial tests (one sample per 50 m).

Once assigned a sample number, individual samples to be sent to ALS laboratories were sealed using a staple gun and accompanied by three identical sample tickets (one stapled to plastic bag to identify any tampering/breakage of seal prior to opening at the laboratory in preparation and another placed in the bag). Any broken staple seals on samples were to be notified by ALS to Hot Chili. No sealed bags were reported as being opened or broken by ALS.

For both RC and diamond samples, sample bags were placed inside larger plastic bags and delivered by a dedicated truck to the ALS analytical laboratory in Coquimbo and Copiapó (Chile) for sample preparation and routine analysis.

Following analysis at ALS, the RC and diamond drilling coarse rejects were returned to site and stored in sequence in plastic bags under shade cloth at Hot Chili's nearby Productora core farm. The laboratory pulps were returned and stored at the Productora core farm where they are stored in organised, dry and safe storage containers.

Hot Chili has strict chain of custody security procedures for all samples sent to and from the analytical laboratories.

The ALS analytical laboratory in Coquimbo (Chile) completed all sample preparation and specific gravity test work, while ALS Santiago (Chile) completed all gold analysis, and ALS Lima (Peru) completed all other multielement analysis for the Cortadera assays used in the resource estimate. Hot Chili has implemented rigorous sample preparation and analytical procedures for both RC and diamond core samples, following consultation with ALS in Chile, to ensure that mineralised assays were reported with a high degree of confidence and a wide range of appropriate commodities were assessed.

Samples have been analysed by certified laboratories in Chile and Lima, Peru by standard analytical techniques including:

• Copper, silver and molybdenum were analysed by 4-acid digestion (Hydrochloric-Nitric- Perchloric-Hydrofluoric) followed by evaluation using Inductively Coupled Plasma - Optical Emission Spectrometry ("ICP-OES") or Atomic Absorption Spectrometry ("AAS");
• Copper results > 10,000 ppm were analysed by "ore grade" method Cu-AA62 (upper limit 40% Cu);
• Samples within the oxide and transitional weathering domains (as determined by geologists' logging) were analysed for "soluble copper" (upper limit 10% Cu) to detect the leachability of copper oxide minerals within these domains; and
• Gold was analysed by 30 or 50 g lead-collection Fire Assay, followed by ICP-OES or AAS.

The verification of input data included the use of company QA/QC blanks and reference material, field and laboratory duplicates, umpire laboratory checks and independent sample and assay verification.

The Qualified Person has assessed the drillhole database validation work and QAQC undertaken by Hot Chili and was satisfied the input data could be relied upon for the estimation of Indicated and Inferred Classified Mineral Resources.

All laboratories used are independent of Hot Chili and the work is performed under a commercial arrangement.

Forward Looking Statements

This report contains certain statements that are "forward-looking information" within the meaning of Canadian securities legislation and Australian securities legislation (each, a "forward-looking statement"). Forward-looking statements reflect the Company's current expectations, forecasts, and projections with respect to future events, many of which are beyond the Company's control, and are based on certain assumptions. No assurance can be given that these expectations, forecasts, or projections will prove to be correct, and such forward-looking statements included in this report should not be unduly relied upon. Forward-looking information is by its nature prospective and requires the Company to make certain assumptions and is subject to inherent risks and uncertainties. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "believe", "could", "estimate", "expect", "may", "plan", "potential", "project", "should", "will", "would" and similar expressions are intended to identify forward- looking statements.

The forward-looking statements within this report are based on information currently available and what management believes are reasonable assumptions. Forward-looking statements speak only as of the date of this report. In addition, this report may contain forward- looking statements attributed to third-party industry sources, the accuracy of which has not been verified by the Company.

In this report, forward-looking statements relate, among other things, to: prospects, projections and success of the Company and its projects; expected cash inflows; the ability of the Company to expand mineral resources beyond current mineral resource estimates; the results and impacts of current and planned drilling to convert inferred mineral resources to indicated, to extend mineral resources and to identify new deposits; the timing and results of the planned 30,000m drill program; the results of planned updates to current mineral resource estimates; the Company's ability to convert mineral resources to mineral reserves; the Company's ability to secure additional mineral rights as part of its consolidation strategy, and the potential of such to host additional mineral resources; the timing and results of the PFS; opportunities for growth in mineral projects; the ability of the Company to secure necessary infrastructure; the terms and conditions related to use of existing port and electrical infrastructure; the timing and outcomes of this current and future planned economic studies; the timing and outcomes of regulatory processes required to obtain permits for the development and operation of the Costa Fuego Project as contemplated in this and future planned economic studies; whether or not the Company will make a development decision and the timing thereof; the ability of the Company to consolidate additional landholdings around its project; estima tes of cost; and estimates of planned exploration.

Forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking statements in this report, including, but not limited to, the following material factors: operational risks; risks related to the cost estimates of exploration; sovereign risks associated with the Company's operations in Chile; changes in estimates of mineral resources of properties where the Company holds interests; recruiting qualified personnel and retaining key personnel; future financial needs and availability of adequate financing; fluctuations in mineral prices; market volatility; exchange rate fluctuations; ability to exploit successful discoveries; the production at or performance of properties where the Company holds interests; ability to retain title to mining concessions; environmental risks; financial failure or default of joint venture partners, contractors or service providers; competition risks; economic and market conditions; and other risks and uncertainties described elsewhere in this report and elsewhere in the Company's public disclosure record.

Although the forward-looking statements contained in this report are based upon assumptions which the Company believes to be reasonable, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this report, the Company has made assumptions regarding: future commodity prices and demand; availability of skilled labour; timing and amount of capital expenditures; future currency exchange and interest rates; the impact of increasing competition; general conditions in economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; future tax rates; future operating costs; availability of future sources of funding; ability to obtain financing; and assumptions underlying estimates related to adjusted funds from operations. The Company has included the above summary of assumptions and risks related to forward-looking information provided in this report to provide investors with a more complete perspective on the Company's future operations, and such information may not be appropriate for other purposes. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom.

For additional information with respect to these and other factors and assumptions underlying the forward-looking statements made herein, please refer to the public disclosure record of the Company, including the Company's most recent Annual Report, which is available on SEDAR (www.sedar.com) under the Company's issuer profile. New factors emerge from time to time, and it is not possible for management to predict all those factors or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward- looking statement.

The forward-looking statements contained in this report are expressly qualified by the foregoing cautionary statements and are made as of the date of this report. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking statement to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. Investors should read this entire report and consult their own professional advisors to ascertain and assess the income tax and legal risks and other aspects of an investment in the Company.

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Date:                .................31 October 2023.........................................

Authorised by: ...........By the Board.....................................................

                      (Name of body or officer authorising release – see note 4)

For more information please contact:

SOURCE Hot Chili Limited

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