Mr. Christian Easterday reports

HOT CHILI AND LOS LOSAS PORT EXECUTE A MOU TO NEGOTIATE BINDING PORT SERVICES AGREEMENT FOR COSTA FUEGO

Hot Chili Ltd. has entered into a memorandum of understanding with Puerto Las Losas SA to evaluate bulk tonnage loading alternatives for copper concentrates from the company's Costa Fuego copper-gold project in Chile.

Importantly, the MOU with PLL provides Hot Chili the right, for up to five years, to negotiate a binding port services agreement for Costa Fuego.

The potential port service agreement would include a take-or-pay volume clause, based on at least 80 per cent of Costa Fuego's projected future annual concentrate production.

Under the terms of the agreement, Hot Chili and PLL will undertake a port feasibility study, which will be managed by PLL, and include prefeasibility engineering (FEL2), feasibility engineering (FEL3) and environmental studies.

Hot Chili will finance 20 per cent of the port feasibility study, which is estimated to cost approximately $4.6-million (U.S.) and take approximately two years to complete.

Upon completion of the port feasibility study, and provided that a shipping solution for loading copper concentrates is agreed at existing or potential infrastructure in PLL, Hot Chili will have a right of first refusal to ship copper concentrates through PLL's facilities in Huasco Bay for a three-year period. PLL may terminate the ROFR by reimbursing Hot Chili's port feasibility study costs.

The company is well funded and looks forward to providing further updates across its multiple activity streams.

Feasibility study for bulk port facility at Las Losas set to commence

Within the coming months, in consultation with Hot Chili, PLL will be responsible for selecting a suitably qualified, top-tier, independent engineering company to commence and undertake a port feasibility study.

The port feasibility study will evaluate bulk handling and loading alternatives for copper concentrates using the existing Las Losas port facilities, potentially with or without modifying the existing infrastructure for the port in operation.

Studies will consider previous technical information for the development and construction of new infrastructure to load copper concentrate with a specialized ship loader and mechanized system.

Representatives from Hot Chili and PLL will form a technical committee to progress the studies. Within the first month, the technical committee will define key project deliverables and a timetable for management of the completion of the port feasibility study workstreams.

Qualified person

The technical information in this news release has been reviewed and approved by Christian Easterday, MAIG, Hot Chili's managing director and a qualified person within the meaning of National Instrument 43-101.

We seek Safe Harbor.