Hot Chili Quarterly Report

Hot Chili Announces Preliminary Feasibility Study (PFS) & Maiden¹ Ore Reserve² for the Costa Fuego Cu-Au Project

• Low-risk, Chilean coastal copper development with advanced permitting - multi-decade mine life, top quartile copper production scale³ and lowest quartile capital intensity
• Strong economics and leverage to rising copper price:
  • Post-tax Net Present Value (NPV8%) of US$1.2 billion (approximately, within a range of US$786 million to US$1.62 billion) and post-tax Internal Rate of Return (IRR) of 19% (approximately, within a range of 15% to 22%)
• Maiden ore reserve for Costa Fuego Copper-Gold Project (Costa Fuego) lowers operational risk^1,2:
  • Probable Ore Reserves of 502 Mt at 0.37% Cu, 0.10 g/t Au, 0.49 g/t Ag and 97 ppm Mo:  Across sulphide concentrator, oxide leach and low-grade sulphide leach processing streams

Hot Chili Announces PFS for Huasco Water & MOU for Seawater Supply to Costa Fuego

• Strong economics for a large, multi-user, water business opportunity
• Stage 1 PFS⁴  for 500L/s of potential seawater supply to Costa Fuego
  • Post-tax NPV8% of US$122 million and IRR of 19%
• Staged approach for regional, desalinated water supply with large 4,000 L/s catchment of potential off-takers
• Stage 2 PFS for 1,300 L/s of potential desalinated water supply
  • Post-tax NPV8% of US$977 million and IRR of 19%
• First-Mover Advantage, only active maritime licence in the Huasco Valley region of Chile

Hot Chili Confirms Major Cu-Au Porphyry Discovery at La Verde

• Multiple new significant drill intersections underpin rapidly growing oxide and sulphide discovery, located 30km south of Costa Fuego, providing significant potential for front-end, open pit, mine life growth
• Phase 1 drill programme completed on 10 April 2025, phase 2 planned and awaiting regulatory approval
• Assay results for nineteen holes pending and second Environmental Impact Assessment (EIA) commenced to integrate La Verde into Costa Fuego and materially enhance project economics

A$7.5M Cash and A$5.0M in Returns Expected (VAT and JV recoup)

• Expenditure reduced by 60% to 65% over next six months during Definitive Feasibility Study (DFS) planning & PFS optimisation phases

Potential Strategic Funding Discussions Advancing

• Strong interest in asset-level investment opportunities for Costa Fuego and Huasco Water

Cautionary Statement – JORC Code (2012)

SUMMARY OF OPERATIONAL ACTIVITIES

Costa Fuego PFS Delivered On-Time & Within Guidance

The Costa Fuego PFS was announced on 27th March 2025. The PFS delivered globally meaningful scale and a multi-decade project life for Costa Fuego.  Highlights included:

Globally Meaningful Scale & Multi-Decade Mine Life

• Project Life Extended to 20 Years
• Average Annual Production Increased 116 ktpa Average CuEq¹ Production Rate: Including 95 kt Cu and 48 koz Au during primary production (first 14 years)
• Competitive Cost Position: Life of mine (LOM) average C1 Cash Cost² of US$ 1.38/lb and All-in-Sustaining Cost of US$1.85/lb (both estimated net of by-product credits)
• Increase in Total Copper and Gold Production: 1.5 Mt Cu (3.31 Blb Cu) and 780 koz Au produced over the LOM
• Robust Financial Profile: Total LOM revenue of approximately US$17.3 billion and total LOM free cash flow of approximately US$3.86 billion (post-tax, after operating costs, capital costs, and royalties)
• Significant Risk Reduction: PFS prepared assuming ± 25% accuracy. An additional US$442 million of capital costs applied to significantly reduce key areas of risk, including changes in project scope and inflationary pressures

Strong Economics and Leverage to Rising Copper Price

• Post-tax NPV8% of US$1.2 billion (approximately, within a range of US$786 million to US$1.62 billion) and post-tax IRR of 19% (approximately, within a range of 15% to 22%)
• First Quartile Capital Intensity: Start-up Capital Cost of US$ 1.27 billion delivers a capital intensity of US$ 14,079/t of average annual CuEq. metal produced
• Highly Leveraged to Copper Price: At spot copper price of US$5.30/lb³, post-tax NPV8% increases to US$2.2 billion and post-tax IRR to 30%, respectively

Low-Risk, Coastal Copper Development with Advanced Permitting

• Low Elevation and Over a Decade of Permitting Advance Provides a Foundation for Development: One of only a few global copper development projects at low elevation with a water permit, and grid power 
• Preparing to submit Environmental Impact Assessment (EIA): Costa Fuego Stage-1 (EIA-1) based on current PFS-scale and definition

Maiden Ore Reserve for Costa Fuego Lowers Operational Risk

• Maiden⁴ Ore Reserve⁵ for Costa Fuego. Probable Ore Reserves of 502 Mt at 0.37% Cu, 0.10 g/t Au, 0.49 g/t Ag and 97 ppm Mo:  Across sulphide concentrator, oxide leach and low-grade sulphide leach processing streams

Sphere size represents Leverage Index – which was calculated as the ratio of % increase in Cu price to % increase in NPV8%.
The Global Developer Peer Group of project studies were selected on the following basis: Global primary copper projects (not controlled by a major miner), with net by-product credits where applicable, reporting studies of average annual life-of-mine copper production of greater than 40 kt, which have been published within the last 5 years.  Projects with older studies were considered to be on hold.  Significant projects such as Pebble and King-king were excluded by Hot Chili due to high perceived geopolitical risk, limiting the probability of development. Projects controlled by mid-tier mining companies near Costa Fuego were also included (Josemaría, Santa Domingo, Mantos Blanco and Mantoverde) for comparison purposes.  References to active mines and other mineral projects is for illustration purposes only. There can be no assurances the Company will achieve comparable results.
Source: Published Company reports on studies undertaken on projects that were not in production at the time of the studies. Information from projects has been sourced from publicly available data that has been provided under differing economic assumptions. Public information for projects has been adjusted to provide a standardised data set under a US$4.30/lb Cu price. Published sensitivity data provided results that bracketed an US$4.30/lb Cu price, which was then calculated. Details of the adjustment are provided in the reference table on Benchmarking Data in the appendix (see slides 55-59 of presentation "Costa Fuego Copper-Gold Project Preliminary Feasibility Study & Maiden Ore Reserve" Dated 27th March 2025 ).

Sphere size represents projected Life of Mine Average Annual CuEq* Production. ¹ PFS CuEq considers long-term commodity prices and PFS metallurgical recoveries for the production feed from testwork. The CuEq metal was determined as the equivalent copper metal with equal value to all saleable production. See slide 37 for PFS commodity prices and slides 33 & 34 for PFS metallurgical recoveries.
The South American Developer Peer Group of project studies were selected on the following basis: South American primary copper projects (not controlled by a major miner), net of by-product credits where applicable, reporting studies of average annual life-of-mine copper production of greater than 40 kt, which have been published within the last 5 years.  Projects with older studies were considered to be on hold. Projects controlled by mid-tier mining companies near Costa Fuego were also included (Josemaría, Santa Domingo, Mantos Blanco and Mantoverde) for comparison purposes. References to active mines and other mineral projects is for illustration purposes only. There can be no assurances the Company will achieve comparable results.
Source: Published Company reports on studies undertaken on projects that were not in production at the time of the studies. Information from projects has been sourced from publicly available data that has been provided under differing economic assumptions. Public information for projects has been adjusted to provide a standardised data set under a US$4.30/lb Cu price. Published sensitivity data provided results that bracketed an US$4.30/lb Cu price, which was then calculated.
Details of the adjustment are provided in the reference table on Benchmarking Data in the appendix (see slides 55-59 of presentation "Costa Fuego Copper-Gold Project Preliminary Feasibility Study & Maiden Ore Reserve" Dated 27th March 2025 ).

Huasco Water PFS Outlines Valuable Strategic Asset

The Huasco Water¹ PFS was announced on 31 March 2025. The Huasco Water PFS presented a robust business case for both Stage 1 and Stage 2 of its proposed regional scale seawater and desalinated water business, with a conceptual level study for Stage 3 desalinated water supply expansion. Highlights included:

Strong Economics for a Large, Multi-User, Water Business

• Stage 1² Water Supply PFS for 500L/s of Potential Seawater Supply: Post-tax NPV8% of US$122 million and IRR of 19%.  Construction capital cost for seawater supply estimated at US$151 million with a 4.5-year payback
• Stage 2 Water Supply PFS for 1,300 L/s of Potential Desalinated Water Supply: Post-tax NPV8% of US$977 million and IRR of 19%.  Construction capital cost for desalinated water supply estimated at US$1.4 billion with a 4-year payback. Stage 2 financial outcomes include Stage 1 capital and operating cashflows
• Stage 3 Conceptual Study for Expansion to 2,300 L/s of Potential Desalinated Water Supply

Stage 1- Multi-Decade Seawater Supply to Costa Fuego

• 20 Year Seawater Supply with Foundation Off-taker: Memorandum of Understanding (MOU) executed for water supply of up to 500 L/s to Costa Fuego
• Long Lead-times Permits Secured: Granted maritime water concession to extract seawater, permit for coastal land access, Stage 1 pipeline easements and connection to the electrical grid secured
• Near-Term Development Decision Tied to Costa Fuego: First water supply planned for end of decade

Stage 2 and 3 – Regional, Desalinated Water Supply Opportunity

• Large Catchment of Potential Off-takers: Over 4,000 L/s of desalinated water demand identified, including six undeveloped mining projects without secured access to desalinated water supply. No offtake agreements have been secured for stage 2 or 3 and discussions with potential customers are ongoing
• Staged Growth Approach: Establishment of seawater supply infrastructure toward the end of the decade, followed by the commencement of initial desalinated water supply shortly thereafter, and subsequent staged expansion. The staged approach enables long term scalable water supply to support mining, community, and agriculture in the Huasco Valley region with potential to extend well beyond the initial project horizons

First-Mover Advantage

• Only Active Maritime License: HW Aguas para El Huasco SpA (Huasco Water), a joint venture between Hot Chili (80% interest) and Compañia Minera Del Pacifico "CMP" (20% interest), is the only company with permitted access to supply seawater in the Huasco Valley region following a ten-year regulatory approval process
• Desalination Permitting Advancing: Over a year advanced on regulatory applications to enable the supply of desalinated water from the existing maritime concession and a second maritime concession application by Huasco Water
• Long Permitting Timelines Continue: No regulatory changes have been made to Chile's maritime permitting process since Huasco Water was granted its concession.  Hot Chili maintains a competitive advantage as the first mover in the area for a water distribution business
• EIA Advanced: Stage 1 seawater supply is included within the Costa Fuego EIA, baseline studies complete.

Huasco Water PFS Key Outcomes

La Verde Exploration Update

On 11 February 2025, Hot Chili reported a second round of strong assay results from its La Verde copper-gold discovery, located approximately 30km south of Costa Fuego.  Highlights included:

Rapidly Emerging Major Copper-Gold Porphyry Discovery

• New drill results from an additional ten Reverse Circulation (RC) drill holes confirm La Verde as a major copper-gold porphyry discovery in low elevation coastal Chile, with broad, consistently mineralised intersections extending over 300 m vertically, commencing at shallow depths.
• Multiple new significant drill intersections underpin rapidly growing oxide and sulphide discovery:

• 320 m grading 0.3% Cu and 0.1 g/t Au from 34 m to end-of-hole (DKP009)
• including 134 m at 0.4% Cu and 0.2 g/t Au from 180 m depth
• including 56 m at 0.5% Cu and 0.2 g/t Au from 258 m depth
• 200 m grading 0.4% Cu and 0.1 g/t Au from 48 m to end-of-hole (DKP005)
• including 38 m at 0.5% Cu and 0.2 g/t Au from 68 m depth
• 172 m grading 0.4% Cu and 0.2 g/t Au from 48 m (DKP012)
• including 20 m at 0.5% Cu and 0.2 g/t Au from 62 m depth

and 78 m grading 0.5% Cu and 0.1 g/t Au from 228 m to end-of-hole

• including 32 m at 0.6% Cu and 0.2 g/t Au from 232 m depth
• 135.5 m grading 0.3% Cu and 0.1 g/t Au from 64 m to end-of-hole (DKP006)
• including 62 m at 0.4% Cu and 0.2 g/t Au from 124 m depth
• which included 26 m at 0.5% Cu and 0.3g/t Au from 124 m depth
• 32 m grading 0.4% Cu from surface (DKP011)

• 80 m grading 0.3% Cu and 0.1 g/t Au from 8 m depth (DKP004)
  • including 34 m at 0.4% Cu from 8 m depth

La Verde Discovery Keeps Growing – Large Scale Appeal

• New drill results reinforce La Verde's potential scale, adding to the strong results reported on 18 December 2024:

• 308 m grading 0.5% Cu, 0.3 g/t Au from 46 m to end-of-hole (DKP002)

• • including 202 m at 0.6% Cu, 0.3g/t Au from 70 m depth
  • which included 100 m at 0.7% Cu and 0.3g/t Au from 118 m depth

• 362 m grading 0.3% Cu, 0.1g/t Au from 28m to end-of-hole (DKP001)
  • including 174 m at 0.4% Cu and 0.1 g/t Au from 36 m depth
  • which included 22 m at 0.6% Cu, 0.2g/t Au from 144 m depth

Drilling Coverage at La Verde Doubled & Porphyry Mineralisation Remains Open

• First-pass drill coverage now extends across an area measuring 1,000 m by 550 m: 30 reverse circulation (RC) holes for 9,352 m drilled.
• Assay results pending for nineteen drill holes: Assay turnaround time from laboratories slower than usual due to peak summer drilling season in the high Andes
• Shallow porphyry mineralisation remains open in all directions
• Phase 1 drill programme completed on 10^th April 2025

Next Steps

• Regulatory application for further clearing access being advanced
• Phase 2 drill programme (RC and diamond drilling) planned to commence following regulatory approval
• Deeper diamond drill testing being planned: 8 of 12 RC drill holes reported to date recorded significant mineralisation to end-of-hole
• Advanced four-dimensional geological modelling underway in addition to regional scale exploration activities across the La Verde discovery area and Domeyko landholdings
• Second EIA commenced to integrate La Verde into Costa Fuego

Table 1 - Drill Holes Completed for Costa Fuego in Quarter 1 2025

Table 2 – Significant Intersections returned for Costa Fuego in Quarter 1 2025

SUMMARY OF CORPORATE ACTIVITIES

Cash Position and Capital Structure Changes

As of 31 March 2025, the Company had cash of A$7.5 million and no debt. The Company expects to receive approximately A$5 million in funds from VAT repayments and joint venture recoup from its partner CMP.

The operating expenditure for quarter ended 31 March 2025 included payments for exploration and evaluation of A$7.9 million. Included in this amount was A$4.0 million related to the completion of the two PFS for Costa Fuego and Huasco Water, and the advancement of the EIA. A total of A$3.9 million was spent on exploration activities across the La Verde copper-gold porphyry discovery and southern landholdings included in the Domeyko project.

The investing expenditure for quarter ended 31 March 2025 related to payments for patentes (annual rent) for the Company's mining tenements.

The Company expects monthly expenditure to be materially reduced by approximately 60% to 65% over the coming six months compared to this quarter, due to the completion and release of both the Costa Fuego and Huasco Water PFS, with only planning and optimisation activities expected during the next two quarters. Exploration expenditure will also be significantly reduced, with phase 1 drilling activities at La Verde having been completed on 10 April 2025.

In addition, the Company is engaged in discussions related to potential renegotiation of forthcoming Option payments later in 2025 to maximise funds, while Hot Chili engages in potential future strategic funding discussions.

The following summarises the Company's securities on issue:

• 151,596,149 ordinary fully paid shares
• 1,914,000 options at AUD $1.50 expiring 24 July 2026
• 5,938,248 service and performance rights

Board Changes

With the release of the Company's Pre-feasibility Studies for its Chilean Costa Fuego copper-gold project and Huasco Water project, Hot Chili commenced preparation in its next steps toward a final phase of development. 

On 11 March 2025, Hot Chili advised that Dr Nicole Adshead-Bell, Non-Executive Chair and Mr Stephen Quin, Non-Executive Director had tendered their resignations as Directors of the Company, effective immediately.

On 17 March 2025, the Company announced the appointment of experienced and well-regarded Australian mining executive, Mrs Fiona Van Maanen, to the Board of Hot Chili as an Independent Non-Executive Director

Further board and key executive appointments are planned and aim to strengthen and align the Company's capability at an important inflection in the Company's growth.

Additional ASX Disclosure Information

ASX Listing Rule 5.3.2: There was no substantive mining production and development activities during the quarter.

ASX Listing Rule 5.3.3 - Schedule of Mineral Tenements as of 31 March 2025

The schedule of Mineral Tenements and changes in interests is appended at the end of this activities report.

ASX Listing Rule 5.3.4: Reporting under a use of funds statement in a Prospectus does not apply to the Company currently.

ASX Listing Rule 5.3.5: Payments to related parties of the Company and their associates during the quarter per Section 6.1 of the Appendix 5B totalled $126,000. This is comprised of directors' salaries and superannuation of $126,000

Health, Safety, Environment and Quality

Field operations during the period included geological reconnaissance activities, reverse-circulation drilling, field mapping, and sampling exercises across the major Cortadera and Productora landholdings, as well as new project at La Verde. Activities on new tenements are run from the Productora or Cortadera operations centres and their safety statistics are included under the figures for all projects.

There were no Lost Time Injuries (LTI) during the quarter.

Hot Chili's sustainability framework ensures an emphasis on business processes that target long-term economic, environmental and social value. The Company is dedicated to continual monitoring and improvement of health, safety and the environmental systems. There is no greater importance than ensuring the safety of our people and their families. 

Table 4. HSEQ Quarter 1 2025 Performance and Statistics

Tenement Changes During the Quarter

During the Quarter, Sociedad Minera La Frontera SpA ("La Frontera") has abandoned the Marsellesa option agreement and the Cometa option agreement and the mining rights have been returned to the respective owners. Furthermore, the Domeyko Option Agreement Offeror has claimed the exploitation concessions "Cazurro 3 1/60", "Cazurro 4 1/60" and "Cazurro 7 1/40" in use of the preferential right held by virtue of exploration concessions "Cazurro 3", "Cazurro 4" and "Cazurro 7" respectively. Consequently, the Domeyko Option Agreement has been amended, including the mentioned concessions and the exploitation concession called "Antonio 36 1/15".

During the same period, Sociedad Minera El Águila has claimed 2 mining exploitation concessions "Suerte 1/7" and "Suerte II 1/15", which are in process to be constituted.

The Company's existing tenements are detailed in the table below.

Table 4 Current Tenement (Patente) Holdings in Chile as of 31 March 2025

Cortadera Project Tenements