Hot Chili Hits High-Grade Copper, Paving Way for Costa Fuego Starter Pit

PERTH, Australia – February 16, 2026 – Hot Chili Limited (ASX: HCH, TSXV: HCH, OTCQX: HHLKF) today announced a series of strong drilling results from its La Verde copper-gold discovery in Chile, further defining a shallow, high-grade zone that significantly enhances the prospects of its flagship Costa Fuego project.

The latest assay results confirm wide intercepts of copper and gold mineralization beginning just tens of meters from the surface. Drillhole DKD036 returned an impressive 150-meter section grading 0.52% copper equivalent (CuEq) from only 30 meters depth. This included a richer, 38-meter interval of 0.70% CuEq. Similarly, drillhole DKD035 recorded 220 meters grading 0.47% CuEq from 38 meters downhole.

These results, located in Chile's prolific coastal Atacama region, are pivotal as they outline what the company believes could be a high-grade 'starter pit,' a development that could dramatically improve the financial outlook of the entire Costa Fuego copper-gold complex.

The 'Starter Pit' Advantage

The confirmation of significant mineralization so close to the surface is a critical development for the project's economics. A 'starter pit' allows a mining company to access and process higher-grade ore early in the mine's life. This strategy can generate substantial early cash flow, which in turn reduces the initial capital investment risk and shortens the time it takes for the project to pay back its construction costs.

Hot Chili's March 2025 Pre-Feasibility Study (PFS) for Costa Fuego already outlined a robust project with a post-tax Net Present Value (NPV) of US$1.2 billion and a 20-year mine life. The potential to integrate the La Verde starter pit into this plan is expected to materially improve these already strong metrics. The shallow nature of the deposit, lying just beneath a layer of gravel, suggests that overburden removal could be simple and cost-effective, further bolstering the economic case.

The latest intercepts from DKD035 and DKD036 build upon nine previous significant drill results, collectively defining a near-surface, high-grade zone spanning approximately 400 by 400 meters. This growing body of evidence provides a strong foundation for a revised mine schedule that could front-load production with more valuable ore, a scenario highly attractive to investors and financiers.

Deeper Potential and Resource Growth

While the shallow results grab headlines for their immediate economic implications, Hot Chili's deeper drilling is revealing the true scale of the La Verde discovery. The company also reported compelling visual evidence from its current drillhole, DKD039, which has intersected a 150-meter-wide zone of strong copper porphyry-style mineralization much deeper in the system.

Visual estimates, while not a substitute for laboratory assays, suggest chalcopyrite (a primary copper ore mineral) abundance averages over 1% and reaches up to 3% in several intervals within this deeper zone. These observations point to a significant expansion of La Verde's high-grade core at depth, signaling substantial resource growth potential beyond the initial starter pit concept. The official assay results for DKD039 and five other drillholes are highly anticipated and expected in April 2026.

This two-pronged success—confirming a shallow starter zone while simultaneously expanding the deeper resource—is a powerful combination. It positions Costa Fuego not just as a project with a solid, economically viable starting point, but as a large-scale system with the potential for a multi-decade operational life. The company has previously stated its ambition for Costa Fuego to achieve an annual production rate approaching 150,000 tonnes of copper equivalent, and the ongoing expansion at La Verde is a critical step toward that goal.

A Strategic Asset in a Surging Metals Market

Hot Chili's progress at Costa Fuego is unfolding against a backdrop of extremely bullish market conditions for both copper and gold. Copper prices have climbed to record highs, with major financial institutions like J.P. Morgan and Goldman Sachs forecasting prices to exceed US$12,000 per metric tonne in 2026. This surge is driven by a structural supply deficit colliding with soaring demand from global decarbonization efforts, including electric vehicles and renewable energy infrastructure, as well as the rapid expansion of power-hungry data centers.

Simultaneously, gold prices are being propelled by geopolitical uncertainty and strong purchasing by central banks, with some analysts predicting prices could surpass US$5,000 per ounce by late 2026. As a copper-gold project, Costa Fuego is perfectly positioned to benefit from these powerful, concurrent market trends.

In this environment, large-scale, advanced-stage copper projects in stable jurisdictions that are not already controlled by major mining corporations are exceptionally rare. Costa Fuego stands out as one of the most significant new copper developments globally, offering a level of scale and potential that is increasingly scarce.

De-Risking the Path to Production

Beyond geology and market dynamics, Hot Chili has been systematically de-risking the logistical and regulatory pathway to production. A critical achievement has been the successful metallurgical testwork for La Verde using seawater. In the arid Atacama region, access to water is a major operational challenge for mining projects. By confirming that La Verde's ore can be processed effectively with seawater—for which Hot Chili already holds a maritime concession—the company has overcome a significant potential hurdle.

This is further supported by the company's 80% ownership of the Huasco Water project, a strategic asset designed to supply industrial water to the region, positioning Hot Chili as a key infrastructure player.

On the regulatory front, both the Costa Fuego and Huasco Water projects were granted "priority status" by the Chilean government in April 2025. This designation is intended to streamline and accelerate the permitting process, a crucial step in keeping the project on track for its target of initial production before the end of the decade. This combination of secured resources, advanced permitting, and strong government support provides a clear and viable path forward.

With double-shift diamond drilling continuing and a second Reverse Circulation (RC) drill rig expected to commence work shortly, the pace of activity at La Verde is set to accelerate. The company's confidence is evident in its expanded drill program, aimed at rapidly growing the resource. With five drill holes already completed and awaiting assays, the market is now keenly focused on the upcoming results, which have the potential to further validate La Verde's emergence as a world-class copper-gold discovery.