Hot Chili welcomes Chilean major
THE CONFERENCE CALLER: Hot Chili (ASX: HCH) saved its best for the last day of Diggers & Dealers by announcing a joint infrastructure agreement with Chilean resources major Compañía Minera del Pacífico S.A (CMP), which will emerge with a 17.5 per cent stake in the Productora copper project in Chile.
“It is a milestone we have been working towards for a very long time,” Hot Chili managing director Christian Easterday told The Roadhouse.
“From our consideration it is transformational – it really puts Hot Chili now in firm sight of a very large copper development, firmly partnered with one of Chile’s premier resource majors.
As well as being a transformational deal, Easterday said the deal also derisks the company’s funding situation going forward to build a large project.
“Most importantly, it really is about a co-operative relationship to develop Productora in a fast time frame at a low cost,” he said.
“It doesn’t get any better than that.”
Under the deal CMP will contribute surface rights, easements and its 35 per cent interest in certain Productora tenements in return for a 17.5 per cent stake in the project.
Hot Chili said the CMP assets will help save time and reduce costs associated with infrastructure needed to underpin Productora.
In addition, Hot Chili will grant CMP an Additional Purchase Option under which, the major may acquire a further 32.6 per cent interest in Productora for a minimum of US$80 million following successful completion of a Pre-feasibility study, expected in the first half of 2015.
Hot Chili explained the option compares with its current market capitalisation of $70 million at 20c a share.
CMP will pay Hot Chili US$1.5 million for the grant of the Additional Purchase Option subject to ratification of the MOU by CMP’s Board and approval by
Hot Chili’s shareholders.
Hot Chili indicated it also soon expects to announce an update in regard to port access study negotiations for the Las Losas port facility, approximately 40 kilometres west of Productora.
Email: admin@hotchili.net.au
Website: www.hotchili.net.au