Productora results encourage upgrade hopes for Hot Chili

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THE DRILL SERGEANT: Hot Chili (ASX: HCH) has announced its best drilling intersections yet at the company’s Productora copper project in Chile.

The company said it expects the latest results to underpin a resource upgrade for Productora in the fourth quarter of 2012 and provide a substantial boost to the economics of a planned four kilometre long central open pit at the project.

Drilling highlights include:

–    196 metres at 0.9 per cent copper equivalent, (0.7 per cent copper, 0.2 grams per tonne gold, 128 parts per million molybdenum) from 40 metres down-hole, including 23 metres at 2.1 per cent copper equivalent (1.6 per cent copper, 0.4g/t gold and 158ppm molybdenum);

–    126m at 0.9 per cent copper equivalent (0.7 per cent copper, 0.2g/t gold, 169ppm molybdenum) from 54m down-hole, including 30m at 1.5 per cent copper equivalent (1.1 per cent copper, 0.2g/t gold and 248ppm molybdenum);

–    120m at 0.9 per cent copper equivalent (0.7 per cent copper, 0.1g/t gold, 96ppm molybdenum) from 60m down-hole, including 20m at 1.3 per cent copper equivalent (1 per cent copper, 0.2g/t gold and 186ppm molybdenum); and

–    149m at 0.8 per cent copper equivalent (0.6 per cent copper, 0.2g/t gold, 141ppm molybdenum) from 29m down-hole, including 35m at 1.2 per cent copper equivalent (1 per cent copper, 0.2g/t gold and 51ppm molybdenum).

In July 2012 Hot Chili announced it had secured the last critical lease at Productora.

The Uranio 1 to 70 lease lies within the centre of the Productora copper project, forming an encircling landholding around the company’s existing JORC-compliant central resource of 85.1 million tonnes at 0.6 per cent copper, 0.1g/t gold and 146ppm molybdenum.

Hot Chili said the results were recorded in the first drilling to be undertaken over the Uranio 1 to 70.

The company said the latest results vindicated its four-year push to secure the last critical leases at Productora.

“The receipt of such outstanding first drilling results from this area of the project is ä great reward for over four years of efforts to consolidate the Productora landholding,” Hot Chili chairman Murray Black said in the company’s announcement to the Australian Securities Exchange.

“The results point to a substantial resource upgrade and a significant boost to the economics of Productora.”

For the purpose of designing and forecasting economics, the Uranio 1 to 70 lease had already been included in Hot Chili’s current pit designs for the development layout at Productora.

 

New drilling intersections in relation to the Central pit design and new Lease at Productora. Source: Company announcement

However, the widths and grades of the latest drilling results are greater than those assumed for the purposes of this earlier work.

The company indicated that a number of the holes it has drilled on the Uranio 1 to 70 lease intersected a potentially large tonnage zone of the deposit, which it said appears to host both high-grade copper and gold from surface.

In light of these results, Hot Chili has brought forward drilling within the Uranio 1 to 70 lease.

Two RC drill rigs are currently expanding drill coverage around the newly-identified zone.