Hot Chilli signs offtake with Glencore for Chilean copper-gold project

Copper developer Hot Chilli has announced the agreement of an offtake with leading commodity producer and trader Glencore for its Costa Fuego copper-gold project in Chile.

The agreement with Glencore, Hot Chilli’s largest shareholder at 9.96%, covers 60% of Costa Fuego’s copper concentrate for an eight-year period from the start of commercial production and is based on arms-length economically competitive benchmark conditions.

Glencore will retain the right to board representation and will be given participation in a technical steering committee, subject to holding at least 7.5% of the ASX and TSXV-listed company.

Hot Chili managing director Christian Easterday said he was pleased to have signed a new agreement with Glencore that will be an ‘important part of [its] strategy to successfully transform’ the firm.

“The quality of Costa Fuego continues to be externally validated with Glencore’s 2021 equity investments and the execution of this offtake agreement on commercially competitive terms,” he said.

“We ensured project financing flexibility with 40% of our first eight years of concentrate production remaining uncommitted ahead of initiating project financing discussions in 2022, following completion of the Costa Fuego pre-feasibility study.”

Costa Fuego consists of three separate deposits and is estimated to host 2.9 million tonnes of copper, 2.7 million ounces (Moz) of gold, 9.9 Moz of silver and 64,000 tonnes of molybdenum.