Hot Chili Eyes Top Spot in Aussie Copper Market
Hot Chili (ASX:HCH) is on track to become one of Australia's top copper developers, according to its founder and managing director Christian Easterday. The company has made significant progress in recent years, including completing a prefeasibility study on the Costa Fuego project in Chile.
The study outlined a US$1.27 billion, 14-year open pit operation that would produce 116,000t of CuEq per year at all-in sustaining costs of US$1.38 per pound of copper, net of by-product credits. The post-tax net present value (8% discount rate) was estimated to be US$1.2 billion, with an internal rate of return of 19% and a payback period of 4.5 years.
Copper prices have risen significantly since the study's completion, with current prices at US$6.50/lb compared to US$4.30/lb in the study. Easterday believes that this increase will make Costa Fuego an even more attractive project, and that the company is well-positioned for success.
Hot Chili recently acquired the La Verde project, 35km south of its proposed processing plant, where a new copper-gold porphyry discovery has been made. The company plans to release a maiden resource for La Verde later this year, which could significantly change the economics of the Costa Fuego project.
Easterday predicts that Hot Chili will become the most leveraged meaningful copper developer in the world, with an 18-year head start on other projects. He believes that the company's focus on execution and new major supply will make it a key player in the industry.