Hot Chili drills one of spiciest copper results at La Verde

Drilling at Hot Chili’s (ASX, TSXV: HCH; US-OTC: HHLKF) La Verde project in Chile returned one of the deepest and most continuously mineralized copper-gold intercepts yet at the site. Shares rose.

Twin diamond drillhole DKD032 returned 529 metres grading 0.41% copper and 0.21 gram gold per tonne from 41 metres depth, the company reported Thursday. That included 148 metres at 0.6% copper and 0.3 gram gold and 66 metres grading 0.45% copper and 0.31 gram gold. La Verde is part of Hot Chili’s larger Costa Fuego project.

‘Third major discovery’

“We are very pleased to be adding a third major copper discovery to our Costa Fuego copper hub, shaping to be a material addition to our 1-billion-tonne resource base,” Hot Chili Managing Director and CEO Christian Easterday said in a statement sent to The Northern Miner. “Wide, higher grade porphyry drill intersections like this are more well known from neighbouring discoveries like Filo (BHP/Lundin) and Valeriano (Atex) at 4,000 metres elevation in the Andes and at depths of 500 metres or more down hole.”

The result, which Hot Chili said exceeded expectations, confirms that copper-gold mineralization comes together at depth and expands a high-grade core. It increases the vertical and lateral extent of the northeastern higher-grade centre of mineralization, and extends the 308-metre intercept found in hole DKP002 last December by 221 metres.

Costa Fuego is located in northern Chile’s Atacama region, about 600 km north of Santiago. Chile is the world’s top producer of copper, with much of it coming from Atacama.

Hot Chili shares gained 11% to A$1 on Friday in Sydney, valuing the company at A$178.2 million ($116.7 million). The stock has traded in a 12-month range of A40¢ to A$1.11.

Stage two drilling

The result is from 2,700 metres of drilling completed thus far at Costa Fuego in its stage two, 10,000-metre drill program that started in September. About 3,000 metres is to be diamond drilling and 7,000 metres reverse circulation. 

The program is aimed at extending the initial discovery footprint of more than 0.2% copper at 1-km long, 750 metres wide and 400 metres deep, while extending the more than 0.3% copper distribution that was identified in the first stage of drilling.

Costa Fuego hosts probable reserves of 502 million tonnes grading 0.37% copper, 0.1 gram gold, 0.49 gram silver and 97 parts per million molybdenum, according to an estimate from March.

The project has a post-tax net present value (at an 8% discount rate) of $1.2 billion, a 19% internal rate of return and a 4.5-year payback period, according to a prefeasibility study released in March. It could produce 1.5 million tonnes of copper and 780,000 oz. of gold over a 20-year life.