Hot Chili Confirms La Verde as Significant Cu-Au Porphyry Discovery

Quarterly Report

Period Ending 31 December 2024

Highlights

Hot Chili Confirms La Verde as Significant Cu-Au Porphyry Discovery

• Drill results returned wide intersections of continuous copper-gold mineralisation from near surface to approximately 300m vertical depth including:
  • 308m of 0.5% Cu, and 0.3g/t from 46m (to end-of-hole) (DKP002)

including 202m of 0.6% Cu and 0.3g/t Au from 70m depth

• 174m of 0.4% Cu and 0.1g/t Au from 36m depth (DKP001), 120m NW of DKP002

Unlocking La Verde’s Full Potential

• First-ever unified exploration of these highly prospective concessions
• 15 more RC drill results pending, with the program now expanded

AI-Powered Exploration Advantage

• Hot Chili has commenced preparation to aggressively leverage Artificial Intelligence (AI) combined with Machine Learning and 16 years of Chilean expertise to fast-track discovery in the world’s top copper-producing nation.

Costa Fuego Cu-Au Pre-feasibility Study (PFS): Final Stages Underway

Huasco Water – Water Supply PFS: Nearing Completion

Environmental Impact Assessment Progressing

Strong Financials: A$19M Cash

Hot Chili Limited ACN 130 955 725 Contact

ASX: HCH

@hotchililimited First Floor, 768 Canning Highway, Applecross, Western Australia 6153 Mr Christian Easterday PO Box 1725, Applecross, Western Australia 6953 Managing Director OTCQX: HHLKF @hotchiliIR P: +61 8 9315 9009 F: +61 8 9315 5004 www.hotchili.net.au E: [email protected]

Drilling operations continuing at La Verde, located 30km south of Costa Fuego in coastal Chile

Cautionary Statement – JORC Code (2012)

The Preliminary Economic Assessment referred to in this Report is equivalent to a Scoping Study under JORC Code (2012) reporting guidelines. It has been undertaken for the purpose of initial evaluation of a potential development of the Costa Fuego Copper Project in Chile. It is a preliminary technical and economic study of the potential viability of the Costa Fuego Copper Project. The PEA outcomes, production target and forecast financial information referred to in the Report are based on low level technical and economic assessments that are insufficient to support estimation of Ore Reserves. The PEA is presented in US dollars to an accuracy level of +/- 35%. While each of the modifying factors was considered and applied, there is no certainty of eventual conversion to Ore Reserves or that the production target itself will be realised. Further exploration and evaluation and appropriate studies are required before Hot Chili will be in a position to estimate any Ore Reserves or to provide any assurance of any economic development case. Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the PEA.

Of the Mineral Resources scheduled for extraction in the PEA production plan, approximately 99% are classified as Indicated and 1% as Inferred. The Company has concluded that it has reasonable grounds for disclosing a production target which includes a small amount of Inferred Mineral Resources, as permitted under the JORC Code. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised. The viability of the development scenario envisaged in the PEA does not depend on the inclusion of Inferred Mineral Resources. However, it is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Measured or Indicated Mineral Resource with continued drilling.

The Mineral Resources underpinning the production target in the PEA have been prepared by a competent person in accordance with the requirements of the JORC 2012. For full details on the Mineral Resource estimate, please refer to the ASX announcement of 31 March 2022. The Mineral Resource Estimate update released in February 2024 does not materially change the Mineral Resource inventory that formed the basis of the 2023 PEA, and no new scientific or technical information has been developed that would materially affect the outcome of the 2023 PEA and, therefore, the results and conclusions of the 2023 PEA are considered current and have been restated for this Report.

To achieve the outcomes indicated in the PEA, including reaching Definitive Feasibility Study (“DFS”), mine construction and production stages, funding in the order of US$1.10 Billion will be required, including pre-production and working capital and assumed financing charges. Investors should note that that there is no certainty that Hot Chili will be able to raise that amount of funding when needed. One of the key assumptions is that the funding for the Project will be available when required and on acceptable terms. It is also possible that such funding may only be available on terms that may be dilutive to, or otherwise affect the value of, Hot Chili’s existing shares. It is also possible that Hot Chili could pursue other value realisation strategies such as debt financing, a sale or partial sale of its interest in the Costa Fuego Copper Project and/or Huasco Water, sale of further royalties and/or streaming rights, sale of non-committed offtake rights, and sale of non-core assets.

This Report contains forward-looking statements. Hot Chili has concluded that it has a reasonable basis for providing these forward-looking statements and believes it has a reasonable basis to expect it will be able to fund development of the Costa Fuego Copper Project. However, a number of factors could cause actual results or expectations to differ materially from the results expressed or implied in the forward-looking statements. Given the uncertainties involved, investors should not make any investment decisions based solely of the results of the PEA.

SUMMARY OF OPERATIONAL ACTIVITIES Hot Chili Expands Drilling at La Verde, Confirming Significant Cu-Au Porphyry Discovery

Hot Chili recommenced drilling in October 2024 at its new La Verde Cu-Au porphyry project, 30km south of Costa Fuego’s planned processing hub in Chile’s Atacama region. This marks the first unified exploration of the Domeyko landholding, unlocking a large, untapped Cu-Au porphyry target.

Drilling Highlights

Thirteen drill holes completed (3,820.5m), during the quarter, an additional 4 drill holes (1,453m) completed in January 2025 to date – 15 holes pending assay results.

• First two holes confirm significant mineralization and higher-grade zones.
• Drill Hole DKP001 (validating historic results)
  • 174m @ 0.4% Cu, 0.1g/t Au from 36m, including:
  • 26m @ 0.5% Cu, 0.1g/t Au from 96m
  • 22m @ 0.6% Cu, 0.2g/t Au from 144m
• Drill Hole DKP002 (120m SE of DKP001 – identifying higher-grade zone)
  • 308m @ 0.5% Cu, 0.3g/t Au from 46m (to end-of-hole), including:
  • 202m @ 0.6% Cu, 0.3g/t Au from 70m, or
  • 100m @ 0.7% Cu, 0.3g/t Au from 118m

Rapidly Emerging Cu-Au Porphyry System

Recent drilling confirms La Verde’s potential as a significant copper-gold discovery, extending the porphyry system 400m NE of the historic open pit—a large step-out given the pit’s 200m x 400m footprint.

• La Verde’s footprint is comparable to Cuerpo 3 at Cortadera, which hosts approximately 70% of Cortadera’s 531Mt Indicated and 149Mt Inferred resources (see announcement dated 26th February 2024)
• Higher grade zones under shallow cover:
  • Oxide mineralisation (copper limonite & chalcocite) extends to ~80m depth.
  • Primary sulphide mineralisation (chalcopyrite & pyrite) continues at depth.
• System Remains Open: mineralisation is open in all directions, with further potential under cover.
• Incorporating AI powered exploration with machine learning and over 16 years of local geological expertise to fast track discoveries.

Next Steps

Hot Chili has expanded its first-pass RC drilling program, now targeting completion by late February 2025.

Drilling underway across the La Verde copper-gold porphyry discovery with historical copper oxide pit in the background – November 2024 Figure 1. Plan view map of the La Verde porphyry system showing the significant intercepts of DKP001 and DKP002 compared to historic drill collars, open pit extent (white), in pit geological mapping, +1% A+B vein footprint from mapping and drillholes (blue) and logged copper mineralisation footprint from historic logging (yellow).

Figure 2. Plan view (Left) map of La Verde showing the +1% A+B vein footprint from mapping and drillholes (blue) and strong copper mineralisation footprint (light pink) relative to the copper mineralisation footprint from historic logging (yellow) with the recently acquired ground magnetic survey reduced to the pole (RTP). Plan view (Right) map of Cuerpo 3 at Cortadera showing the +1% A+B vein footprint (from drillholes) relative to the +0.1% copper (yellow), +0.4% copper (light pink) and +0.6% copper (dark pink) interpolants with the ground magnetics survey reduced to pole (RTP). Black arrows and distances indicate the length and width of +1% A+B vein footprints.

Table 1 - Drill Holes Completed for Costa Fuego in Quarter 4 2024

Table 2 – Significant Intersections returned for Costa Fuego in Quarter 4 2024

Costa Fuego Cu-Au Pre-feasibility Study (PFS): Final Stages Underway

During the December 2024 quarter, Hot Chili completed key workstreams for Costa Fuego’s PFS and Environmental Impact Assessment (EIA), achieving milestones in metallurgy, mining, infrastructure, and environmental planning.

Metallurgy

• Finalized metallurgical testwork using Nova Mineralis Novaminore® technology, which leverages saline water and regulated irrigation cycles for enhanced chalcopyrite recovery.
• Demonstrated reduced freshwater dependency, aligning with Costa Fuego’s planned seawater processing.
• Results informed predictive models for copper recovery and acid consumption, optimizing the mine schedule.

Figure 3. Novaminore® 1 m Column Leaching Test on Productora Oxide material

Mining

• Mine scheduling finalised using advanced software, incorporating feed from four open pits (Productora, Cortadera, Alice, and San Antonio) and an underground block cave at Cortadera.
• Multiple schedule iterations prioritized low pre-start capital, fast payback, and optimized production rates.
• Initial capital and operating cost estimations were completed, with further optimization underway for inclusion in the PFS financial model.

Infrastructure

• Finalized site layout, including placement of heap/dump leach pads, waste dumps, stockpiles, mill site, tailings storage, and support buildings.

• Integrated surface water management systems, including diversion channels and dewatering infrastructure.
• Ongoing road optimization to align with the mining schedule.

Environment

• Advanced EIA preparation with additional hydrogeological and geotechnical investigations planned for 2025.
• Completed collection of 122 rock samples for acid rock drainage (ARD) and metal leaching (ML) tests to inform long-term infrastructure and mine closure planning.
• Conducted baseline environmental studies and integrated results into design decisions.

EIA Preparations and Social Licence to Operate

Hot Chili is preparing its EIA for Costa Fuego ahead of planned submission in 2025. During the quarter, the Company’s environmental team made several advances, including:

• Expanded community communication with bilingual digital updates and public events in Vallenar, including presentations and information booths.
• Continued support for local at-risk children, celebrating Christmas with communities in Vallenar and Freirina.

Both events were well attended and received, and additional information booths and presentations are planned for the townships of Huasco and Freirina in the first quarter of 2025.

Figure 4. Images from Vallenar Community Information Events Q4 2024

Figure 5. Compilation of photos from the children’s Christmas party 2024

Costa Fuego Analyst Tour

On the 21^st and 22^nd November 2024, the Company hosted nine analysts representing Australian and North American financial institutions, at the Costa Fuego and Huasco Water Projects. Key stops on the tour included:

• Las Losas Port for concentrate shipping infrastructure.
• Huasco Water’s maritime concession at Playa Brava.
• Productora, Cortadera, and the La Verde project, showcasing current drilling and regional exploration plans.

Hot Chili team at the Cortadera copper-gold deposit – November 2024

Advancing Regional Targets

During the quarter, Hot Chili’s field team expanded its regional exploration pipeline, focusing on key areas:

• Pastos Largos (9km north of Domeyko): Ongoing geological mapping and soil sampling, with assay results pending.
• Domeyko Project: Continued detailed mapping around the La Verde Cu-Au porphyry discovery.
• Rock Chip Sampling: Multiple promising copper, gold, and silver results returned. (see Table 3, Figures 6).
• Soil Sample Results: 397 samples collected in the previous quarter returned (see Figures 7).

Table 3 – Domeyko Rock Chip samples returned in Quarter 4 2024, sorted by Cu%

Figure 6. Location of reconnaissance rock chip sampling at Domeyko, coloured by Cu%