Hot Chili (ASX:HCH) is raising $14 million through an entitlement offer while engaging strategic partners to aid the development of the Costa Fuego and Huasco Water projects following the return of a Prefeasibility Study.
The offer, set down for 13 August, will issue shares at $0.60 under a two for 13 basis, representing a 3.4% premium to the last trading price at $0.58 on 4 August as well as a 4% discount to the 15-day volume weighted average price.
Eligible shareholders will be entitled to apply for additional shares under the shortfall facility if entitlement is fulfilled.
BMO Capital Markets is acting as the financial advisor for the partnering process, while Hot Chili assesses several proposals from investors.
Managing Director Christian Easterday says the company is pleased to open the entitlement offer to eligible shareholders.
“Funding from the rights issue will facilitate another significant upgrade to the company’s copper and gold resource base at a time of strong market conditions for both commodities,” Easterday says.
“A strengthened balance sheet will also provide the company with the necessary funds to complete its strategic partnering process aimed at potentially unlocking asset-level funding for Costa Fuego and Huasco Water.”
Hot Chili intends to boost financial, technical, and operational capability of its Costa Fuego and Huasco Water projects with one or more partners.
Meanwhile, the company is expediting phase two of diamond drilling at its La Verde discovery, within the Costa Fuego Project in the Atacama region of Chile.
The company completed 31 reverse circulation drillholes over 9,600m in April, which defined more than 0.2% of copper mineralisation spanning 1,000m by 750m.
This footprint remains open laterally and at depth, extending up to 400m of vertical depth.
Hot Chili intends to streamline a maiden resource estimate for the project with phase two of drilling.
Write to Maddison Elliott at Mining.com.au
Images: Hot Chili
