Half-Yearly Report: Hot Chili Limited and Controlled Entities Interim Financial Report for the Half-Year Ended 31 December 2024

Half-Yearly Report: Hot Chili Limited and Controlled Entities Interim Financial Report for the Half-Year Ended 31 December 2024

PERTH, Australia, March 14, 2025 /PRNewswire/ -

Review of Operations

Highlights

• Hot Chili adds former La Verde Copper Mine (La Verde) to its Costa Fuego coastal copper hub and confirms significant Cu-Au porphyry discovery.
• Costa Fuego Cu-Au Pre-feasibility Study (PFS): Final Stages Underway.
• Huasco Water – Water Supply PFS: Nearing Completion.
• 31 December 2024 cash position A$19 million.

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

On 11 February 2025, the Company announced new drill results from ten Reverse Circulation (RC) drill holes, confirming La Verde as a significant copper-gold porphyry discovery in low elevation coastal Chile, with broad, consistently mineralised intersections extending over 300 m vertically, commencing at shallow depths.

Drilling confirms scale & growth potential*

• Wide, shallow mineralisation – current discovery footprint extends 550 m by 400 m and remains open in all directions.
• Deeper potential remains untapped – Mineralisation commences from shallow depths, extends to more than 300m below surface, and 8 of 12 drill holes reported to date end in mineralisation at the limit of RC drilling depth capability.
• Gravel cover masking potentially much larger porphyry system – step-out drilling underway.
• Potential below the historical oxide copper open pit untested – drill testing yet to commence.
• Major discovery in its infancy – every drill hole has intersected porphyry-style, copper-gold mineralisation (refer to Table 1 for details on significant intercepts).

As at 11 February 2025, Hot Chili had completed 19 RC drill holes (5,700 m) at La Verde, with assay results from 12 holes reported so far confirming a major copper-gold porphyry discovery* in Chile's coastal range, with assays pending for seven additional RC holes, with geological logging confirming the presence of porphyry host-rock featuring porphyry-style A- and B-type veining in each of the pending drill holes.

Diamond drilling being planned, targeting potential for deeper, higher-grade zones intersected at depth and to test potential for +1km vertical depth extent, typical of other recent major porphyry discoveries, such as Hot Chili's neighbouring Cortadera discovery, *La Verde Mineral Exploration/Exploration Target Area: Exploration targets and/or Exploration zones and/or Exploration areas are speculative and there is no certainy that any future work or evaluation will lead to the definition of a mineral resource.

Hot Chili adds La Verde to its Costa Fuego Coastal Copper Hub

In November 2024, Hot Chili executed an Option Agreement to acquire a 100% interest in the historical La Verde Copper Mine (La Verde), located 30 km south of the Company's low-altitude, Costa Fuego copper-gold project in Chile (Figure 1).

La Verde encompasses 800m strike length of open pit workings, previously exploited by private interests for shallow copper-oxide mineralisation.

The La Verde Option Agreement, along with the recently executed Domeyko Option Agreement (see announcement dated 30^thApril 2024), for the first time consolidates and provides access to, a much larger potential porphyry copper deposit footprint measuring approximately 1.4km by 1.2km, based on geophysical surveys.

The material terms of the executed La Verde Option Agreement are as follows:

Hot Chili's 100% owned subsidiary Sociedad Minera La Frontera SpA ("Frontera") has executed a definitive option agreement with SLM Los Dominiceros una de la Sierra Los Chiqueros ("SLM Dominoceros"), the holder of a 100% interest in the concession comprising La Verde, for the grant to Frontera of an option to acquire a 100% interest in the La Verde concession ("La Verde Option Agreement").

• Non-refundable cash payment of US$320,000 to SLM Dominoceros upon grant of the La Verde Option Agreement.
• Non-refundable cash payment of US$680,000 within 12 months from the grant of the La Verde Option Agreement.
• Non-refundable cash payment of US$1,000,000 within 24 months from the grant of the La Verde Option Agreement.
• Option may be exercised within 36 months of the date of grant of the La Verde Option for a final non-refundable cash payment of US$6,890,000.

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

During the period, 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 from heap leaching of low grade mineralisation.
• 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.

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 lower pre-start capital, faster payback, and optimized production rates.
• Initial capital and operating cost estimates 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.

Huasco Water – Water Supply PFS: Nearing Completion

During the quarter, Hot Chili's 80% owned subsidiary company Huasco Water continued to progress its PFS-level, water supply Business Case Study. Key deliverables finalised this quarter by international engineering firm ILF Group, include:

• Evaluation of marine works and the conveyance system to Costa Fuego and other potential third-party off-takers
• Completion of trade-off studies, including desalination plant (technology, location, and sizing), and pipeline configuration (routing and location of pumping stations) for potential third party off-takers. Note that Costa Fuego does not require desalinated water for processing.
• Optimisation of capital cost estimates for the initial stage of seawater supply to Costa Fuego
• Options for third party water supply, including desalinated water, continue to advance

Huasco Water controls the only active granted maritime water concession and most of the necessary permits to provide non-continental water supply to the Huasco Valley, following over a decade of permitting advancement for Hot Chili's coastal range Costa Fuego copper-gold project.

Uniquely, Huasco Water represents an opportunity for Hot Chili to potentially outsource its water infrastructure capital requirements in addition to providing significant additional funding optionality for Costa Fuego.

Hot Chili is continuing its discussions with potential water off-takers in the Huasco Valley and is also engaging with major water infrastructure groups in relation to potential partnership opportunities for financing and development of Huasco Water's future industrial water infrastructure.  

Qualifying Statements

The Mineral Resource summary for the Costa Fuego Project is presented in Table 2.

The references to mineral resource estimates in this Half-yearly Report have been extracted from the estimate of mineral resources contained in the Company's announcement to ASX dated 26 February 2024 "Hot Chili Indicated Resource at Costa Fuego Copper-Gold Project Increases to 798 Mt", a copy of which is available on the Company's website at www.hotchili. net.au/investors/asx-announcements/. The Company confirms that it is not aware of any new information or data that materially affects the information included in this report about the Company's mineral resources and that all material assumptions and technical parameters underpinning the mineral resource estimates continue to apply and have not materially changed.

The references to exploration results in this Annual Report have been extracted from the Company's announcements to ASX dated 3 August 2023, "Hot Chili Commences 30,000m Drill Programme at Costa Fuego Copper-Gold Project", 28 August 2023, "Hot Chili Signs Binding Letter of Intent for Option to Acquire Cometa Project in Chile", 15 November 2023 "Hot Chili Continues to Expand its Costa Fuego Coastal Copper Hub in Chile", 23 January 2024, "Hot Chili Commences Next Phase of Resource Expansion Drilling Programme at Costa Fuego" and 30 April 2024 "Hot Chili Secures Large Addition to its Costa Fuego Coastal Copper Hub in Chile", copies of which are available on the Company's website at www.hotchili.net.au/investors/asx-announcements/. The Company confirms that it is not aware of any new information or data that materially affects the information included in this report about the Company's exploration results.

Qualified Persons – NI 43-101

The information pertaining to the Mineral Resource Estimates included in this Report has been reviewed and approved by Ms. Elizabeth Haren (FAUSIMM (CP) & MAIG) of Haren Consulting Pty Ltd. All other scientific and technical information in this Report has been reviewed and approved by Mr Christian Easterday, MAIG, Hot Chili's Managing Director and Chief Executive Officer. Each of Ms. Haren and Mr. Easterday are a qualified person within the meaning of NI 43-101.

Competent Person's Statement - JORC

The information in this Report that relates to Mineral Resources for Cortadera, Productora (including Alice) and San Antonio which constitute the combined Costa Fuego Project is based on information compiled by Ms Elizabeth Haren, a Competent Person who is a Fellow and Chartered Professional of The Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Ms Haren is a full-time employee of Haren Consulting Pty Ltd and an independent consultant to Hot Chili.  Ms Haren has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves'.  Ms Haren consents to the inclusion in the Report of the matters based on her information in the form and context in which it appears.

The information in this announcement that relates to Exploration Results for the Cortadera projects is based upon information compiled by Mr Christian Easterday, the Managing Director and a full-time employee of Hot Chili Limited, whom is a Member of the Australasian Institute of Geoscientists (AIG). Mr Easterday has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a 'Competent Person' as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (JORC Code). Mr Easterday consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Production targets and forecast financial information contained in PEA

The information in this report relating to any production targets and forecast financial information derived from the production targets comprised in the statements in this report about the PEA for the Costa Fuego Copper-Gold Project was previously reported in the Company's announcement 'Hot Chili Announces PEA for Costa Fuego' (the "Technical Report") released to ASX on 28 June 2023 and is available to view on the Company's website at www.hotchili.net.au/investors/asx-announcements/.

For readers to fully understand the information in this Half Year Report, they should read the Technical Report (available on www.SEDAR.com or at www.hotchili.net.au ) in its entirety, including all qualifications, assumptions and exclusions that relate to the information set out in this Half Year Report that qualifies the technical information contained in the Technical Report. The Technical Report is intended to be read as a whole, and sections should not be read or relied upon out of context. The technical information in this Half Year Report is subject to the assumptions and qualifications contained in the Report.

The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement, and that all material assumptions and technical parameters underpinning the production targets and forecast financial information derived from the production targets contained in the original market announcement continue to apply and have not materially changed.

Disclaimer

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this Report.

Cautionary Note for U.S. Investors Concerning Mineral Resources

NI 43-101 is a rule of the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Technical disclosure contained in this report has been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification System. These standards differ from the requirements of the U.S. Securities and Exchange Commission ("SEC") and resource information contained in this report may not be comparable to similar information disclosed by domestic United States companies subject to the SEC's reporting and disclosure requirements.

All amounts in this report are in U.S. dollars unless otherwise noted.

Forward Looking Statements

This report contains certain statements that are "forward-looking information" within the meaning of Canadian securities legislation and Australian securities legislation (each, a "forward-looking statement"). Forward-looking statements reflect the Company's current expectations, forecasts, and projections with respect to future events, many of which are beyond the Company's control, and are based on certain assumptions. No assurance can be given that these expectations, forecasts, or projections will prove to be correct, and such forward-looking statements included in this report should not be unduly relied upon. Forward-looking information is by its nature prospective and requires the Company to make certain assumptions and is subject to inherent risks and uncertainties. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "believe", "could", "estimate", "expect", "may", "plan", "potential", "project", "should", "toward", "will", "would" and similar expressions are intended to identify forward-looking statements.

The forward-looking statements within this Report are based on information currently available and what management believes are reasonable assumptions. Forward-looking statements speak only as of the date of this report. In addition, this report may contain forward-looking statements attributed to third-party industry sources, the accuracy of which has not been verified by the Company.

In this Report, forward-looking statements relate, among other things, to: projections for and success of the Company and its projects; the ability of the Company to expand mineral resources beyond current mineral resource estimates; the results of current and planned geophysical, soil sampling and other exploration programs, including MIMDAS and Mag; the results and impacts of current and planned drilling to extend mineral resources and identify new deposits; the Company's ability to convert mineral resources to mineral reserves; the timing and outcomes of current and future planned economic studies including the planned PFS and DFS; the potential to develop a water business in the Huasco valley and the future economics thereof; the timing and results of the Water Supply Business Case Study; whether or not a second maritime water extraction permit will be granted; whether or not water offtake agreements and/or infrastructure partner agreements will be entered into and, if so, on what terms; the timing and outcomes of regulatory processes required to obtain permits for the development and operation of the Costa Fuego Project, including the EIA; whether or not the Company will make a development decision and the timing thereof; and estimates of planned exploration costs and the results thereof.

Forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking statements in this Report, including, but not limited to, the following material factors: operational risks; risks related to the cost estimates of exploration; sovereign risks associated with the Company's operations in Chile; changes in estimates of mineral resources of properties where the Company holds interests; recruiting qualified personnel and retaining key personnel; future financial needs and availability of adequate financing; fluctuations in mineral prices; market volatility; exchange rate fluctuations; ability to exploit successful discoveries; the production at or performance of properties where the Company holds interests; ability to retain title to mining concessions; environmental risks; financial failure or default of joint venture partners, contractors or service providers; competition risks; economic and market conditions; and other risks and uncertainties described elsewhere in this report and elsewhere in the Company's public disclosure record.

Although the forward-looking statements contained in this Report are based upon assumptions which the Company believes to be reasonable, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this Report, the Company has made assumptions regarding: future commodity prices and demand; availability of skilled labour; timing and amount of capital expenditures; future currency exchange and interest rates; the impact of increasing competition; general conditions in economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; future tax rates; future operating costs; availability of future sources of funding; ability to obtain financing; and assumptions underlying estimates related to adjusted funds from operations. The Company has included the above summary of assumptions and risks related to forward-looking information provided in this Report to provide investors with a more complete perspective on the Company's future operations, and such information may not be appropriate for other purposes. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom.

For additional information with respect to these and other factors and assumptions underlying the forward-looking statements made herein, please refer to the public disclosure record of the Company, including the Company's most recent Annual Report, which is available on SEDAR+ (www.sedarplus.ca) under the Company's issuer profile. New factors emerge from time to time, and it is not possible for management to predict all those factors or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

The forward-looking statements contained in this report are expressly qualified by the foregoing cautionary statements and are made as of the date of this Report. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking statement to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. Investors should read this entire report and consult their own professional advisors to ascertain and assess the income tax and legal risks and other aspects of an investment.

Director's Report

The Directors of Hot Chili Limited present their report on the consolidated entity consisting of Hot Chili Limited ("the Company" or "Hot Chili") and the entities it controlled ("consolidated entity" or "the Group") at the end of, or during, the half-year ended 31 December 2024.

Directors

The following persons held office as directors of Hot Chili Limited at the date of this report or were directors at any time during the half-year ended 31 December 2024, unless otherwise stated:

Dr Nicole Adshead-Bell (Independent Non-Executive Chairman) (Resigned 11 March 2025)
Christian Easterday (Managing Director)
Roberto de Andraca Adriasola (Non-Executive Director)
Mark Jamieson (Non-Executive Director)
Stephen Quin (Independent Non-Executive Director) (Resigned 11 March 2025)

Principal Activities

The principal continuing activity of the consolidated entity is mineral exploration.

Significant Changes in the State of Affairs

During the half year under review, significant changes in the state of affairs of the consolidated entity were as follows:

In November 2024, the Company executed an Option Agreement to acquire a 100% interest in the historical La Verde Copper Mine (La Verde), located 30 km south of the Company's low-altitude, Costa Fuego copper-gold project in Chile.

In December 2024, the Company announced significant copper-gold, porphyry-style mineralisation at La Verde, with 202m grading 0.6% copper, 0.3g/t gold from 70m depth.

Results of Operations for the Half-Year Ended 31 December 2024

The results of the consolidated entity from continuing operations after providing for income tax and non-controlling interest for the half-year ended 31 December 2024 was a loss of $6,509,483 (half-year ended 31 December 2023: loss of $4,131,534).

Dividends

No dividends were paid or declared since the end of the previous year ending 30 June 2024. The Directors do not recommend the payment of a dividend.

Rounding Off of Amounts

The Company is of a kind referred to in ASICCorporations (Rounding in Financial/Directors' Reports) Instrument 2016/191, dated 24 March 2016, issued by the Australian Securities and Investments Commission. Therefore, the amounts contained in the Directors' Report and in the financial report have been rounded to the nearest dollar in accordance with that Corporations Instrument, unless otherwise stated.

Review of Operations and Qualifying Statements

Refer to the Review of Operations report in Section 1 and associated Qualifying Statements in Section 2.

Matters Subsequent to Reporting Date 31 December 2024

On 6 January 2025, the Company issued 352,913 Service Rights and 366,094 Performance Rights under an employee incentive scheme.  The Service and Performance Rights have been issued effective from the individuals start dates with the Company.

On 7 January 2025, announced that 1,850,001 options had expired without exercise or conversion.

On 4 February 2025, the Company announced that 1,259,789 options had expired without exercise or conversion.

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 the Company's Costa Fuego Copper-Gold Project planned central processing hub at low elevation in the coastal range of the Atacama region, Chile.  The Company has now completed 19 RC drill holes (5,700 m) at La Verde, with assay results from 12 holes reported so far confirming a major copper-gold porphyry discovery in Chile's coastal range.

On 11 March 2025 Dr Nicole Adshead-Bell, Non-Executive Chairman and Mr Stephen Quin, Non-Executive Director tendered their resignations, effectively immediately.

Auditors' Independence Declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this Directors' Report.

This report is made in accordance with a resolution of the Board of Directors made pursuant to section 306(3)(a) of the Corporations Act 2001.

Signed on behalf of the Board of Directors by:

Christian Easterday
Managing Director
Dated this 13^th day of March 2025
Perth, Western Australia

For the Auditor's Independence Declaration and the Indpendent Auditor's Review Report, please refer to SEDAR+.

Director's Declaration

In the opinion of the Directors:

a)       the attached financial statements and notes thereto comply with the Corporations Act 2001, the accounting standards (including Australian Accounting Standard AASB 134 Interim Financial Reporting), the Corporations Regulations 2001 and other mandatory professional reporting requirements;

b)       the attached financial statements and notes thereto give a true and fair view of the consolidated entity's financial position as at 31 December 2024 and of its performance for the half-year ended on that date; and

c)       there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors made pursuant to section 303(5)(a) of the Corporations Act 2001.

Signed on behalf of the Board of Directors by:

Christian Easterday
Managing Director
Dated this 13^th day of March 2025
Perth, Western Australia

Statement of Profit or Loss and Other Comprehensive Income
For the Half-Year Ended 31 December 2024

The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. 

Statement of Financial Position
As at 31 December 2024

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

Statement of Changes in Equity
For the Half-Year Ended 31 December 2024

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Statement of Cash Flows
For the Half-Year Ended 31 December 2024

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

Notes to the Financial Statements
For the Half-Year Ended 31 December 2024

1.   SUMMARY OF MATERIAL ACCOUNTING POLICIES

Statement of Compliance

The half-year financial report is a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting.

The half-year financial report does not include full disclosures of the type normally included in an annual financial report. Accordingly, it is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2024 and any public announcements made by Hot Chili Limited and its controlled entities during the half-year in accordance with the continuous disclosure requirements of the Corporations Act 2001.

Basis of Preparation

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements, unless otherwise stated. The accounting policies are consistent with Australian Accounting Standards and with IFRS Standards.

New or Amended Accounting Standards and Interpretations Adopted

The consolidated entity has adopted all new or amended accounting standards, interpretations and other accounting pronouncements issued by the Australian Accounting Standards Board ("AASB") that are effective for reporting periods beginning on or after 1 January 2025 and therefore mandatory for the current reporting period.

Any new or amended accounting standards, interpretations and other accounting pronouncements that are not yet mandatory have not been early adopted.

2.    OPERATING SEGMENTS

The Company's operations are in one reportable business segment, being the exploration for Copper.  The Company operates in one geographical segment, being Chile.

The operating segment information is the same information as provided throughout the consolidated financial statements and therefore not duplicated. The information reported to the CODM is on at least a monthly basis.

3.    EXPLORATION AND EVALUATION EXPENDITURE

4.    RIGHT-OF-USE ASSETS

5.    LEASE LIABILITIES

6.    COMMITMENTS FOR EXPENDITURE

(a)      Exploration Commitments
In order to maintain current rights of tenure to exploration and mining tenements, the consolidated entity has the following discretionary exploration expenditure requirements up until the expiry of leases. These obligations are not provided for in the financial statements and are payable as follows:

(b)     Option Payment Commitments
The mining rights (which vary between 90% to 100%) of the various projects undertaken by Hot Chili will be transferred upon satisfaction of the option payments committed as at 31 December 2024, as tabled below:

7.    CONTINGENT LIABILITIES

a)       VAT
As at 31 December 2024, Hot Chili Limited had accumulated:

• VAT refund payments of $15,434,266 (30 June 2024: $14,939,275) with respect to VAT recovered as at 31 December 2024 by Sociedad Minera El Águila SpA (refer to the table below); and
• VAT refund payments of $10,157,243 (30 June 2024: $9,731,571) with respect to VAT recovered as at 31 December 2024 by Sociedad Minera Frontera SpA (refer to the table below).

Under the initial terms of the VAT refund payment, the consolidated entity initially had until the 31 December 2019 to commercialise production from Productora and meet certain export targets. Hot Chili also had the right to extend this term. The Company exercised its right to extend the date of commercial production from Productora with the Chilean Tax Authority. An extension to the benefit was extended to 30 June 2022 and a further extension until 30 June 2026 was also granted. An agreement with Sociedad Minera Fronters SpA provides an extension to 31 December 2026 for exports related to the Cortadera deposit.

In the event that the term is not extended further and the Company does not meet certain export targets, the Company will be required to re-pay the VAT refund payments to the Chilean Tax Authority subject to certain terms and conditions. However, if Hot Chili achieves the export targets within that timeframe or its renewal, if required, any VAT refund payments will not be required to be repaid.

b)        Future Royalty Payments
In July 2023, the Company closed an Investment Agreement with Osisko Gold Royalties Ltd ("Osisko"). Under the terms of the Investment Agreement Osisko purchased a net smelter return royalty comprising 1% of payable copper production and 3% of gold payable production. Hot Chili retains a buyback right if a change of control event occurs prior to the 4th anniversary of closing under the terms and conditions of the announcement dated 28 June 2023.

8.    CONTRIBUTED EQUITY

b)        Movement in Ordinary Share Capital

c)        Unlisted Options Over Ordinary Share Capital

The weighted average exercise price of options on issue is $2.07 (30 June 2024: $2.16). The weighted average remaining contractual life of options outstanding at the end of the period was 0.08 years (30 June 2024: 0.38 years)

8.  CONTRIBUTED EQUITY (CONT'D)

d)        Service Rights

e)        Performance Rights

9.    RELATED PARTY TRANSACTIONS

Remuneration, share-based payments and other arrangements of key management personnel are disclosed in the annual financial report for the year ended 30 June 2024. These arrangements with related parties continued to be in place during the period. No further related party arrangements were made, nor were there further related party transactions during the half-year period to 31 December 2024.

10. EVENTS OCCURRING AFTER REPORTING DATE

On 6 January 2025, the Company issued 352,913 Service Rights and 366,094 Performance Rights under an employee incentive scheme.  The Service and Performance Rights have been issued effective from the individuals start dates with the Company.

On 7 January 2025, the Company announced that 1,850,001 options had expired without exercise or conversion.

On 4 February 2025, the Company announced that 1,259,789 options had expired without exercise or conversion.

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 the Company's Costa Fuego Copper-Gold Project planned central processing hub at low elevation in the coastal range of the Atacama region, Chile.  The Company has now completed 19 RC drill holes (5,700 m) at La Verde, with assay results from 12 holes reported so far confirming a major copper-gold porphyry discovery in Chile's coastal range.

On 11 March 2025 Dr Nicole Adshead-Bell, Non-Executive Chairman and Mr Stephen Quin, Non-Executive Director tendered their resignations, effectively immediately.

The Directors are not aware of any other matters or circumstances that have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the consolidated entity the results of those operations, or the state of affairs of the consolidated entity in future financial periods.

11. DIVIDENDS

No dividends were paid or declared for the period.

This section does not form part of the notes to the financial statements.

Table 3: Current Tenement (Patente) Holdings in Chile as at 31 Dec 2024

Cortadera Project

Table 3: Current Tenement (Patente) Holdings in Chile as at 31 Dec 2024 (Cont'd)

Productora Project

Table 3: Current Tenement (Patente) Holdings in Chile as at 31 Dec 2024 (Cont'd)

Productora Project (Cont'd)

Table 3: Current Tenement (Patente) Holdings in Chile as at 31 Dec 2024 (Cont'd)

Productora Project (Cont'd)

El Fuego Project

Table 3: Current Tenement (Patente) Holdings in Chile as at 31 Dec 2024 (Cont'd)

El Fuego Project (Cont'd)

Table 3: Current Tenement (Patente) Holdings in Chile as at 31 Dec 2024 (Cont'd)

El Fuego Project (Cont'd)

Table 3: Current Tenement (Patente) Holdings in Chile as at 31 Dec 2024 (Cont'd)

El Fuego Project (Cont'd)