Mr. Christian Easterday reports

HOT CHILI COMMENCES NEXT PHASE OF RESOURCE EXPANSION DRILLING PROGRAMME AT COSTA FUEGO

Hot Chili Ltd. has commenced the next phase of the company's 30,000-metre resource growth focused drill program for the Costa Fuego Copper-Gold Project ("Costa Fuego" or "the Project"), located in the coastal range of the Atacama Region, Chile.

A total of 47 Reverse Circulation (RC) drill holes for 11,500m have been completed since the company's resource growth focused drill program commenced in late July 2023.

Drilling aims to test multiple resource growth opportunities, which may allow Hot Chili to consider an up-lift in the Pre-feasibility study scale for Costa Fuego.

The first phase of drilling in H2 2023 focused on resource extensional potential at Cortadera and first-pass drilling across new satellite targets. In addition, several RC pre-collars were drilled in preparation for the second phase of diamond drill testing in 2024 adjacent to the company's two principal mineral resources: Cortadera; and Productora.

The second phase of drilling commenced on 12th January with one diamond drill rig operating on a 24-hour basis (double-shift). A program of 10 diamond (DD) drill holes for approximately 5,000m is initially planned. The initial diamond drill program comprises:

Five DD holes planned to test four large-scale targets at Cortadera (refer to Figures 2 and 3). The first DD hole is currently testing a large co-incident conductivity and chargeability geophysical anomaly located north of Cortadera.

A further five DD holes are planned to test three large-scale targets adjacent to Productora (refer to Figures 2 and 4)

The company looks forward to providing further updates as DD drilling advances across these targets over the coming months.

First-Pass Exploration Drill Results Returned

Assay results have been received for first-pass drilling undertaken in late 2023 across three new satellite targets within the Costa Fuego landholding: Marsellesa, Cordillera and Corroteo.

Both Marsellesa and Cordillera are located approximately 10km southwest of Costa Fuego's planned central processing hub at Productora, and Corroteo is located approximately 5km southeast of Cortadera (refer to Figures 1 and 2).

A total of 4 RC drill holes for 1,244m were completed across the historical Marsellesa open pit copper mine footprint (refer to Figure 5). Significant intersections were recorded in each of the four drill holes:

• 25m grading 0.4 per cent Copper (Cu) from surface including 10m grading 0.8 per cent Cu from 7m depth
• 16m grading 0.5 per cent Cu from 197m depth downhole including 6m grading 1.1 per cent Cu from 198m depth
• 19m grading 0.5 per cent Cu from 195m depth downhole including 2m grading 2.2 per cent Cu from 195m depth
• 8m grading 0.8 per cent Cu from 1m depth downhole including 4m grading 1.0 per cent Cu from 4m depth

Higher grade copper drilling intersections are associated with both copper oxide (Cu bearing limonite, brochantite and chrysocolla) and copper sulphide (chalcopyrite) mineralization localised within moderately east-dipping manto horizons (refer to Figure 5). Follow-up work is being planned to further assess mineralization continuity across the 500m of prospective strike length.

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

A total of 6 RC drill holes for 1,450m were completed across the historical Cordillera copper mine footprint, located approximately 1km west of Marsellesa (refer to Figure 6). Significant intersections recorded, include:

• 93m grading 0.3 per cent Cu from surface including 14m grading 0.4 per cent Cu from surface
• 53m grading 0.3 per cent Cu from 19m depth including 10m grading 0.4 per cent Cu from 44m depth
• 184m grading 0.2 per cent Cu from surface including 14m grading 0.3 per cent Cu from 42m depth

Wide RC drilling intersections returned at Cordillera relate to broad zones of oxide (Cu bearing limonite with very minor cuprite) and sulphide (chalcopyrite, molybdenite) porphyry copper mineralization confirmed below and surrounding the small surface mine workings.

Porphyry copper mineralization with well-developed stockwork and sheeted A and B style porphyry veining is exposed in the Cordillera open pit mine workings, and porphyry outcrop has been mapped across an area measuring 300m in length and 200m in width.

A total of 8 RC drill holes for 2,324m was completed across the greenfield Corroteo exploration target located 5km southeast of Cortadera (refer to Figure 7). No significant intersections were recorded.

Wide spaced RC drilling has tested approximately 1.8km strike extent of the large-scale Corroteo alteration footprint. Significant pyrite mineralization was encountered in drilling toward the northern extent of the target area extending under a wide alluvial gravel plain. Final drilling directed under this alluvial cover confirmed the presence of tonalitic porphyry.

Hot Chili's exploration team is currently assessing the new drill results on each of these satellite exploration targets in preparation for potential follow-up drilling and exploration work programs.

Resource upgrade being finalized

The company is in the final stages of completing an upgrade to its mineral resource for Costa Fuego based on all drilling completed since February 2022. The resource upgrade is expected to be released in Q1 2024.

Ongoing Development and Water Studies Advancing

The company also looks forward to providing further updates on development study and water supply concept study advances this quarter.

This announcement is authorised by the Board of Directors for release to ASX and TSXV.

Hot Chili's Managing Director and Chief Executive Officer Mr Christian Easterday is responsible for this announcement and has provided sign-off for release to the ASX and TSXV.

Qualifying Statements

Qualified Persons - NI 43-101

The scientific and technical information in this new release, has been reviewed and approved by Mr Christian Easterday, MAIG, Hot Chili's Managing Director and Chief Executive Officer, and a qualified person within the meaning of NI 43-101.

Competent Persons - JORC

The information in this announcement that relates to Exploration Results for the Marsellesa and Cordillera projects is based upon information compiled by Mr Christian Easterday, the Managing Director and a full-time employee of Hot Chili Limited whom is a Member of the Australasian Institute of Geoscientists (AIG). Mr Easterday has sufficient experience that is relevant to the style of mineralization and type of deposits under consideration and to the activity which he is undertaking to qualify as a 'Competent Person' as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (JORC Code). Mr Easterday consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

All amounts in this news release are in U.S. dollars unless otherwise noted.

Mineral Resource Statement

Costa Fuego Combined Mineral Resource (Effective Date 31st March 2022)

We seek Safe Harbor.