An Applecross-based explorer has struck while the iron is hot and tapped investors for $29.9 million to advance its flagship copper project in the South American nation of Chile.
Hot Chili told the market on Monday it had raised $24.9m via a private placement to institutional investors and will conduct a share purchase plan to secure an additional $5m from existing shareholders.
Both the placement and purchase plan are at $1 a share, a 20 per cent discount to Hot Chili’s previous closing price.
The company plans to use the bulk of the cash to complete a pre-feasibility study of its Costa Fuego copper-gold project near the Chilean coast next half and a bankable feasibility study over the coming 18 months.
Costa Fuego currently has an estimated price tag of at least $US1 billion ($1.5b).
Additionally, Hot Chili intends to advance a water supply study and the creation of a new water company next half.
Hot Chili managing director Christian Easterday said the rising copper price environment provides confidence to accelerate the company’s growth and development plans.
“We control large-scale assets in two of the most critical commodities of our time – copper and water – with two of the most desirable attributes – low-risk and near-term,“ he said.
“The placement and share purchase plan maintain the company’s strategic funding optionality, while ensuring Costa Fuego remains one of a limited number of globally significant copper developments, not owned by a major mining company, that could deliver meaningful new copper supply this decade.
“Market conditions are indicative of the initial stages of a new copper price cycle being driven by a lack of new supply.”
The copper spot price has risen nearly 15 per cent over the past year to current sit at around $US9730 a tonne.