Mr. Christian Easterday reports

HOT CHILI INDICATED RESOURCE AT COSTA FUEGO COPPER-GOLD PROJECT INCREASES TO 798 MT

Hot Chili Ltd. has released another resource increase for its Costa Fuego copper-gold project, located in the coastal range, 600 kilometres north of Santiago, Chile.

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

Costa Fuego comprises the Cortadera, Productora (including Alice) and San Antonio deposits, all of which have updated mineral resource estimates (MRE or resource) and lie proximal to one another, at low altitude (800 metres to 1,000 metres), approximately 600 km north of Santiago.

The MRE update follows 24 months of material investment, totalling 24.5 km of drilling across Costa Fuego -- a mix of development, metallurgical, geotechnical, resource expansion and exploration drilling -- designed to progress the Costa Fuego project toward its prefeasibility study (PFS) expected in H2 2024.

At Cortadera, the company completed 43 reverse circulation (RC) and diamond drill hole tails (DD) for 17,000 metres of additional exploration and resource extension drilling at Cortadera, including six development drill holes. The Cortadera MRE (porphyry copper-gold deposit) has again delivered the majority of resource growth for Costa Fuego. Cortadera is defined by over 108,000 metres of drilling and now contains an indicated resource of 531 million tonnes (Mt) grading 0.44 per cent copper equivalent (CuEq) (previously 471 Mt grading 0.46 per cent CuEq) and an inferred resource of 149 Mt grading 0.29 per cent CuEq (previously 108 Mt grading 0.35 per cent CuEq) -- see the table entitled "Costa Fuego copper-gold project mineral resource estimate, Feb. 26, 2024," for a complete breakdown.

Cortadera's indicated resource tonnage has grown by a further 13 per cent, further supporting the company's June, 2023, preliminary economic assessment (PEA), which outlined Costa Fuego as having the potential to be one of the world's lowest-capital-intensity major copper developments. The proportion of indicated resource now reported within the open-pit reasonable prospect of eventual economic extraction (RPEEE) constraints has also increased by 32 per cent, with no change in the reported CuEq grade (0.44 per cent). The higher-grade plus-0.6-per-cent CuEq indicated material has also increased by 14 per cent, at an average grade of 0.76 per cent CuEq. This material sits largely within the open-pit RPEEE constraints, with the balance of the resource within the underground RPEEE constraints.

The Productora MRE (breccia-hosted copper-gold deposit) has been re-estimated following an additional 16 RC and DD exploration drill holes for 5,000 metres (including four metallurgical drill holes), a large pulp resampling campaign for silver and soluble copper assays, and a new approach to estimating the oxide and transition weathering domains. The MRE was reported using RPEEE constraints, similar to those used at Cortadera. Immaterial positive changes were reported for the Productora indicated MRE copper and gold contained metal, as well as an additional 2.8 million ounces (Moz) of silver metal at 0.35 g/t, which has now been incorporated into the CuEq contained metal, in line with the approach at Cortadera.

The porphyry deposit Alice (previously included in Productora MRE reporting) has also been re-estimated. The previous historical MRE was completed in 2015 and has now been brought into line with the approach taken at Cortadera, which comprises a similar style of mineralization. An additional nine drill holes for 2,600 metres, including one DD metallurgical drill hole (800 m), completed in 2017 and 2022, respectively, were also included. These changes did not result in a material change to the overall MRE tonnage or grade, but improved confidence in the local variability of the estimation, which has been reflected in the updated resource classifications.

A San Antonio MRE update included an additional 16 drill holes (2,500 metres), including three DD metallurgical drill holes, designed to upgrade the inferred resource to indicated classification. Additional mapping and sampling were also completed to validate the higher-grade copper mineralization exposed at surface. This additional information resulted in three Mt grading 0.71 per cent CuEq being converted to indicated classification, from the previously inferred four Mt grading 1.15 per cent CuEq.

The company is encouraged by the further conversion of inferred material to indicated classification, now standing at 85 per cent of the total CuEq contained metal, following focused development drilling (metallurgical and geotechnical) designed to support a prefeasibility study, and targeted exploration and resource extension drill programs. The expansion of Costa Fuego indicated resources, without material impact to reported metal grades, increases confidence in the reliability of the MRE and its ability to inform the company's planned PFS.

Cut-off grade and reporting copper price analysis

Following release of the company's PEA in June, 2023, a review of MRE-appropriate CuEq cut-off grades (COG) was completed, with revisions to long-term consensus copper price assumptions and break-even grade assessments considered.

The long-term consensus copper price assumption changed from $3.30 (U.S.)/pound (lb) copper (Cu) in 2022, to $3.85 (U.S.)/lb Cu in 2024. The change in copper price, in combination with the latest costs, as informed by the company's PEA in June, 2023, has reduced the break-even grade for Costa Fuego.

The revised COGs reflect these changes in assumptions and have been set appropriately higher than the calculated break-even grade. These key assumptions in relation to COG's are summarized in the table entitled "Summary of cut-off grades and copper price changes."

Cortadera mineral resource increase

The Cortadera MRE increase follows an additional 17,000 metres of DD and RC drilling since the March, 2022, mineral resource estimate. Samples used during the MRE update were obtained using both RC and DD, and were analyzed using inductively coupled plasma (ICP) techniques to quantify 33 elements, along with fire-assay techniques to quantify gold. The update resulted in a 7-per-cent increase in total indicated resource tonnage at the same cut-off grade, for approximately 88,000 tonnes of additional CuEq contained metal.

Cortadera has maintained a proportion of 84 per cent indicated CuEq contained metal during this MRE update, with the spacing and location of drilling at Cortadera ranging from 80 m to 300 m. The selected drill spacing and orientation over the resource area ensures that drilling is optimized, where possible, to intersect perpendicular to mineralization.

The additional drilling enabled improved delineation of low-grade copper across Cortadera, but particularly at Cuerpo 3, where the porphyry mineralization halo extends the farthest, following analysis during the preliminary economic assessment. The economics of the low-grade sulphide leach presented in the PEA indicated processing material down to grades of 0.15 per cent Cu at Costa Fuego would be profitable.

Drilling below Cuerpo 1 resulted in additional resource material at depth, included largely within the underground RPEEE.

Continuity of grade and geology is controlled by the emplacement of mineralized porphyry intrusions into shallow-dipping host stratigraphy. While these porphyry intrusions have a reasonably consistent pipe-like geometry, grade distribution also extends into the host stratigraphy.

Mineralization models have been generated using over 109,000 m of drilling and continued increase in knowledge of the geological controls on mineralization. Each metal has been independently optimized following the completion of extensional drilling, resulting in improved continuity of copper, gold, silver and molybdenum within each of Cortadera's three porphyry bodies (Cuerpos). These models correlate well with higher A plus B porphyry vein percentages, and other key porphyry mineralization metrics.

Review of the late-stage dike model was also completed following infill drilling of six diamond development drill holes, which resulted in additional narrow dikes being added to the geology model, particularly beneath the dike-eye at Cuerpo 3. This improved geology model reduced dilution of the estimated porphyry mineralization and contributed to a 14-per-cent increase in indicated CuEq contained metal above 0.6 per cent CuEq.

Extensive test work was completed to determine an optimal estimation approach and ensure the model was representative of the underlying porphyry mineralization controls. The updated Cortadera MRE continues to utilize a probabilistic estimation approach (categorical indicator kriging (CIK)) within each mineralization domain. This approach enabled the spatial and chronological aspects of the multiple phases of mineralization to be better represented.

The table entitled "Cortadera deposit mineral resource estimate, Feb. 26, 2024," outlines the upgraded Cortadera MRE.

Productora mineral resource update

The Productora MRE has been updated following an additional 16 RC and DD exploration drill holes (approximately 5,000 metres), including four metallurgical drill holes. The drilling increased confidence in the previously developed probabilistic CIK technique used for estimation, with the model able to predict high- and low-grade zones within the structurally complex, breccia-hosted Productora mineralization. This increase in confidence allowed for the lateral expansion of classification boundaries, converting material from inferred to indicated, before subsequent application RPEEE open-pit constraint. These changes resulted in a minimal increase (2 per cent) in indicated CuEq contained metal above 0.20 per cent CuEq.

Drill hole spacing at Productora varies from 40 m by 40 m to 160 m by 160 m, and has provided a high level of support for the geological, mineralization and resource estimation models, with both indicated and inferred resource classification at Productora. Samples used during the MRE update were obtained using both RC and DD, and were analyzed using ICP for 33 elements and fire-assay for gold.

A large pulp resampling campaign for silver, comprising approximately 3,000 samples, culminated in a maiden indicated resource of 2.8 Moz of silver at Productora. A smaller pulp resampling campaign (approximately 900 samples) was completed for soluble copper, which was also been included in the updated Productora MRE to allow for modelling of metallurgical recovery in the company's planned PFS later this year.

An updated approach to the modelling of weathering surfaces was also developed, utilizing a combination of quantitative (that is, ratio of soluble copper to total copper) and qualitative (that is, proximity to structures and logged regolith) data to model the oxide, transitional and fresh weathering zones. This technique accounts for the impact of structural complexity on weathering at Productora and allows for the more accurate application of metal recoveries for calculation of CuEq per cent.

The table entitled "Productora deposit mineral resource estimate, Feb. 26, 2024," shows the upgraded Productora MRE.

Alice mineral resource update

The Alice MRE has been updated following the addition of nine drill holes for 2,600 metres, including one DD metallurgical drill hole (800 m). Alice was previously reported as part of the Productora MRE due to its proximity (less than 300 metres). Drill hole spacing at Alice is on a nominal 80 m by 40 m spacing. This drill hole spacing has provided a high level of support for domaining of mineralization. Geological and grade continuity is sufficient for mineral resource estimation, with both indicated and inferred resources being classified at Alice. Samples used during the MRE update were obtained using both RC and DD, and were analyzed using ICP (33 elements) and fire-assay for gold.

Alice is an outcropping copper-mineralized porphyry, with minor gold and molybdenum. Significant work has been completed since the maiden MRE in 2015, including surface mapping for mineralization and structures, and relogging of RC chips and DD core. This culminated in the construction of an updated litho-structural model at Alice, which then informed the mineralized envelopes. Many of the lessons from Cortadera were able to be applied to Alice due to the similarities in deposit style.

While the estimation updates did not result in a material change to the Alice MRE tonnes and grade, they did improve confidence in the local variability of the estimation, which has been reflected in the resource classification. Open-pit RPEEE constraints have been applied for resource reporting at Alice.

The table entitled "Alice deposit mineral resource estimate, Feb. 26, 2024," shows the upgraded Alice MRE.

San Antonio mineral resource update

The San Antonio MRE has also been updated with an additional 16 drill holes completed (2,500 metres), including four metallurgical drill holes. The aim of the drilling was to define along-strike and down-dip extents of the mineralization, and aid conversion of the maiden MRE from inferred to indicated classification.

Drill hole spacing at San Antonio is on a nominal 40 m spacing along strike, and between 40 m and 80 m spacing up/down dip of the mineralized diorite unit. Historic drilling includes underground channel and sludge drilling, providing high-density drill spacing down to 20 m in some areas. Drill spacing has the highest density around the old underground workings. Samples used during the MRE update were obtained using both RC and DD, and were analyzed using ICP (33 elements) and fire assay for gold.

The San Antonio deposit is characterized by narrow mineralization along an north-northeast-south-southwest-trending shear through the host rocks, which are a shallowly west-dipping sedimentary and volcanic sequence. An updated litho-structural model was informed by surface mapping (campaigns completed in 2018 and 2022), underground mapping (2018 and 2019), drill hole logging and assay data (2018 and 2022), and an RC chip relogging campaign (2022).

The reporting of an indicated resource at San Antonio is a significant outcome, primarily driven by infill drilling completed since the previous MRE and detailed surface mapping work, culminating in a high-confidence interpretation of the mineralization. Existing underground workings at San Antonio also assisted in validating mineralization interpretations.

The San Antonio indicated resource totals three Mt grading 0.71 per cent CuEq and the inferred resource totals two Mt grading 0.41 per cent CuEq. The previous 2022 MRE for San Antonio was an inferred four Mt grading 1.15 per cent CuEq.

The table entitled "San Antonio deposit mineral resource estimate, Feb. 26, 2024," outlines the updated San Antonio MRE.

Hot Chili's managing director and chief executive officer Christian Easterday is responsible for this announcement, and has provided sign-off for release to the Australian Stock Exchange and TSX Venture Exchange.

Qualifying statements

Qualified persons

The information pertaining to the mineral resource estimates included in this news release has been reviewed and approved by Elizabeth Haren, MAUSIMM (CP), MAIG, of Haren Consulting Pty. Ltd. All other scientific and technical information in this news release has been reviewed and approved by Mr. Easterday, MAIG, Hot Chili's managing director and chief executive officer. Each of Ms. Haren and Mr. Easterday are a qualified person within the meaning of National Instrument 43-101.

A technical report prepared in accordance with NI 43-101, containing the full details with respect to the updated mineral resource update estimate, will be filed with the applicable Canadian securities regulators on SEDAR+ within 45 days of Feb. 26, 2024. For further information on the Costa Fuego project, refer to the technical report titled "NI 43-101 technical report preliminary economic assessment," dated June 28, 2023, which is available for review under Hot Chili's profile at SEDAR+.

Competent person -- JORC (Joint Ore Reserve Committee)

The information in this report that relates to mineral resources for Cortadera, Productora (including Alice) and San Antonio, which constitute the combined Costa Fuego project, is based on information compiled by Ms. Haren, a competent person who is a member and chartered professional of the Australasian Institute of Mining and Metallurgy, and a member of the Australian Institute of Geoscientists. Ms. Haren is a full-time employee of Haren Consulting and an independent consultant to Hot Chili. Ms. Haren has sufficient experience, which is relevant to the style of mineralization and types of deposits under consideration, and to the activities undertaken, to qualify as a competent person as defined in the 2012 edition of the Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ms. Haren consents to the inclusion in the report of the matters based on her information in the form and context in which it appears.

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