Market takes interest as Hot Chili hits pocket of high grade copper at Chilean Valentina project

Hot Chili (ASX:HCH) shares have risen to 81c in trades today with 4.5% gains retained in mid-afternoon trades.

The upward move comes as the company hits a pocket of high-grade copper at its Valentina copper project, located in Chile, revealed in the company’s most recent assay results.

The diamond drill run recently concluded, and Hot Chili is still waiting for results covering another six holes from the August campaign. 

What has Hot Chili found? 

Before we dive into the results, let’s talk about grades. 

Investor information provider Undervalued Equity notes high grade copper mineralisation is considered that over concentrations of 1.5%. 

Silver, meanwhile, is considered high grade when occurring in concentrations over fifty grams a tonne (50g/t) and medium grades between 10g/t and 49g/t.

Compare that to today’s results from drillhole VALMET0002: 

• 12m @ 04.6g/t copper and 16.5g/t silver from 25m depth, including: 

  • 03m @ 11.8% copper and 52.6g/t silver from 29m depth

While that three metre intersection may not itself be the thickest core result ever received, there is an important consideration the company has been awarded. 

In short, the drillhole these results are pulled from was sunk 120m to the south of an existing underground mine-on site. Strike length at Valentina now sits at over 300m.

Results add weight to previous data 

The fact copper-silver mineralisation continues beyond known mineralisation gives geotechs evidence suggesting mineralisation underground on-site extends further than thought. 

The ultimate implication here for a potential mineral resource boost on-site, though, Hot Chili has made no comment of this so far. 

The relatively shallow depths (starting at 25m) are also a point of confidence for the company; the existence of a previously constructed underground mine is a huge advantage to the company in reaching mineral deposits underground. 

Previous results from Valentina are less exciting, but further evidence copper-silver mineralisation may exist in commercial quantities on-site. 

They include:

• 05m @ 01.5% copper and 7.8g/t silver 

• 02m @ 01.9% copper and 6.7g/t silver 

• 02 m @ 1.5% copper and 9.3g/t silver 

Assays pending 

Hot Chili is to receive another six assay results for its most recent diamond drill campaign at Valentina, likely to be released in the coming weeks and months. 

Worth noting is that Hot Chili also awaits twelve assay results at another copper project boasting high-grades, which is called San Antonio. 

Based on assay results received so far, Hot Chili perceives the consistent observation of sulphides in core samples suggests relatively low cost and straightforward flotation processing could fast-track the company’s path to copper production. 

Quick look at cash

Of most interest to investors will be Hot Chili’s strong cash position. 

The company ended the June quarter with $23.6m in cash; meaning it is well-funded to continue exploration activities at Valentina, as well as its overall portfolio. 

AUD$10.00 buys $6,313.36 Chilean pesos.

Morningstar rates Hot Chili undervalued; giving it a fair value estimate of $1.83—a fair value difference of 56.7%.

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