Hot Chili set to raise $35.5 million

THE BOURSE WHISPERER: Hot Chili Limited (ASX:HCH) has arranged a two tranche placement to raise $32.5 million at 50 cents per share as part of a proposed capital raising of up to $35.5 million.

Hot Chili said funds raised will largely be directed towards a resource growth drilling program and continuation of development studies at the company’s Productora copper project in Chile.

Productora is being fast-tracked towards a decision to mine on a large-scale open pit project in cooperation with Hot Chili’s project partner and substantial shareholder Compañía Minera del Pacífico S.A. (CMP- Chile’s largest iron ore miner).

Hot Chili claim the project to be one of the fastest emerging mid-tier copper projects being developed in Chile, with significant infrastructure advantages in the low-altitude coastal range.


Drilling intersections in relation to landholding and development lay-out at Productora. Source: Company announcement


In addition to its current cash balance of approximately $10.8 million, Hot Chili said the funds will be directed toward the following activities at Productora during 2012 and 2013:

–    Completion of a major resource drilling program comprising a further 80,000m of reverse circulation (RC) and 15,000m diamond drilling (DD);

–    Completion of two major resource up-grades – the first in the December quarter of 2012, and the second expected in the June quarter of 2013;

–    Completion of a pre-feasibility study at Productora in the second half of 2013;

–    Completion of further key land acquisitions during 2012/2013 to bolster the company’s copper project centre in the third and fourth regions of Chile’s coastal range;

–    Completion of joint infrastructure and iron exploitation agreement for the Productora project with Hot Chili’s major project partner CMP; and
–    Submission of an Environmental Impact Assessment in the first half of 2013 to facilitate environmental and regulatory approval for mining.

The company indicated it also intends to direct some funds towards continued exploration assessment of other projects within its Chilean copper project portfolio.

“The Board of Hot Chili is very pleased with the interest shown in the placement by a number of highly regarded institutions and fund groups both in Australia and overseas,” Hot Chili said in its ASX announcement.

“The successful capital raising is a strong vote of confidence in the company’s growth and development strategy by some of Hot Chili’s largest shareholders and pedigree names in the copper industry.

“The capital raising will allow participation by new investors, institutions and fund groups as well as existing shareholders in a stand-out growth opportunity in the Chilean copper industry.”