Mr. Christian Easterday reports

HOT CHILI CONTINUES TO EXPAND ITS COSTA FUEGO COASTAL COPPER HUB IN CHILE

Hot Chili Ltd. has entered into option agreements to acquire 100-per-cent interest in two historical copper mine areas, Marsellesa and Cordillera, located near Hot Chili's Costa Fuego copper-gold project in the coastal range of the Atacama region, Chile.

Marsellesa and Cordillera are located approximately 10 kilometres southwest of Costa Fuego's planned central processing hub.

Both mine areas have been privately held and historically exploited for shallow copper oxide and copper sulphide material but have never previously been drill tested.

The Marsellesa mine area is laterally extensive, measuring 400 metres in length and 200 m in width, with mine workings exposing multiple zones of shallowly dipping, strata-bound (manto-style) copper mineralization.

Lying approximately one kilometre west of Marsellesa, the smaller Cordillera mine workings expose outcropping porphyry copper mineralization with well-developed stockwork, and sheeted A- and B-style porphyry veining.

First-pass reverse circulation (RC) drilling is planned to commence at Marsellesa and Cordillera in the coming week, following completion of drilling at the company's Corroteo exploration target, located five km southeast of the Cortadera porphyry copper-gold deposit.

These latest project additions, including the Cometa project (as announced Aug. 28, 2023), provide a pipeline of opportunities and additional optionality for the discovery of new mineral resources for the company's Costa Fuego copper hub.

Hot Chili continues to pursue further regional consolidation as the company advances its growth strategy for Costa Fuego.

The company's recently published preliminary economic assessment entitled "Costa Fuego Copper Project -- NI 43-101 Technical Report Preliminary Economic Assessment," with an effective date of June 28, 2023, establishes Costa Fuego as a low-risk, long life copper project benefiting from a low start-up capital and a high annual copper equivalent (CuEq) metal production profile of over 100,000 tonnes for a 16-year mine life, including 95,000 tonnes copper and 49,000 ounces (oz) gold during primary production (first 14 years) at a C1 cash cost of $1.33 (U.S.)/pound (lb) (estimated, net of byproduct credits).

Hot Chili is focused on up-scaling Costa Fuego's resource base and potential study scale toward a 150,000 tpa (tonne per annum) copper production profile, in order to further enhance project returns ahead of the delivery of the Costa Fuego prefeasibility study (PFS).

The material terms of the executed Marsellesa option agreement are as follows:

• Hot Chili's subsidiary, Sociedad Minera La Frontera SpA, has executed a definitive option agreement with Hermanos Pefaur SpA, the holder of a 100-per-cent interest in the concession comprising Marsellesa, for the grant to Frontera of an option to acquire a 100-per-cent interest in the Marsellesa concession.
• Non-refundable cash payment of $100,000 (U.S.) to Pefaur upon grant of the Marsellesa option.
• Non-refundable cash payment of $100,000 (U.S.) within 12 months from the grant of the Marsellesa option.
• Non-refundable cash payment of $150,000 (U.S.) within 24 months from the grant of the Marsellesa option.
• Option may be exercised within 36 months of the date of grant of the Marsellesa option for a final non-refundable cash payment of $1-million (U.S.).
• Pefaur will also be granted a 1-per-cent NSR (net smelter return) royalty over the Marsellesa concession on exercise of the Marsellesa option. Frontera will have a right of first refusal to buy back the NSR royalty.

The material terms of the executed Cordillera option agreement are as follows:

• Hot Chili's subsidiary, Sociedad Minera La Frontera SpA, has executed a definitive option agreement with Arnaldo Del Campo, the holder of a 100-per-cent interest in the concessions comprising Cordillera, for the grant to Frontera of an option to acquire a 100-per-cent interest in the Cordillera concessions.
• Non-refundable cash payment of $100,000 (U.S.) to Mr. Del Campo upon grant of the Cordillera option.
• Non-refundable cash payment of $200,000 (U.S.) within 24 months from the grant of the Cordillera option.
• Option may be exercised within 48 months of the date of grant of the Cordillera option for a final non-refundable cash payment of $3.7-million (U.S.).
• Within the Cordillera concessions, Mr. Del Campo will also be granted a 1-per-cent NSR royalty over any material extracted from underground operations, and a 1.5-per-cent NSR royalty over any material extracted from open-pit operations, on exercise of the Cordillera option. Frontera will have a right of first refusal to buy back the NSR royalties.

Hot Chili is well positioned, with $21.8-million (Australian) in cash (as of Sept. 30, 2023), and a near-term focus on regional land consolidation and rapid definition of additional high-grade and bulk-tonnage copper resources for Costa Fuego.

The company looks forward to providing further updates as exploration drilling activities progress across Corroteo, Marsellesa and Cordillera.

Qualifying statements

Technical report

Certain scientific, technical and economic information contained in this news release is derived from the PEA. For readers to fully understand such information, they should read the PEA technical report prepared in accordance with National Instrument 43-101 -- Standards of Disclosure for Mineral Projects (available on SEDAR+ or at the company's website) in its entirety, including all qualifications, assumptions, limitations and exclusions that relate to the information set out in this news release. The PEA 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 news release is subject to the assumptions and qualifications contained in the PEA.

Qualified persons -- NI 43-101

The PEA was compiled by Wood Australia Pty. Ltd., with contributions from a team of independent qualified persons (within the meaning of NI 43-101). The scientific, technical and economic information contained in this news release pertaining to Coast Fuego is based on the PEA, which was prepared by the following independent qualified persons:

• Elizabeth Haren, MAUSIMM, CP, MAIG, of Haren Consulting -- mineral resource estimate;
• Dean David, FAUSIMM, CP, of Wood Pty. Ltd. -- metallurgy;
• Piers Wendlandt, PE, of Wood -- market studies and contracts, economic analysis;
• Jeffrey Steven, PE, of Wood -- capital and operating costs;
• Anton von Wielligh, FAUSIMM, ABGM Consulting Pty. Ltd. -- mine planning and scheduling;
• Edmundo Laporte, PE, of GAC -- environmental studies, permitting and social or community impact;
• Dave Morgan, PE, Knight Piesold -- project infrastructure (TSF (tailings storage facility)).

The independent qualified persons have verified the information disclosed in the PEA, including the sampling, preparation, security and analytical procedures underlying such information.

Disclosure regarding mine planning and infrastructure has been reviewed and approved by Grant King, FAUSIMM, Hot Chili's chief operations officer, and a qualified person within the meaning of NI 43-101.

The scientific and technical information in this new release, other than such information derived from the PEA, has been reviewed and approved by Christian Easterday, MAIG, Hot Chili's managing director and chief executive officer, and a qualified person within the meaning of NI 43-101.

All amounts in this news release are in United States dollars unless otherwise noted.

Costa Fuego combined mineral resource (effective date March 31, 2022)

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