Mr. Christian Easterday reports

HOT CHILI SUBMITS SECOND MARITIME APPLICATION AND PREPARES TO CREATE NEW WATER COMPANY

Hot Chili Ltd. has submitted a second maritime concession application to support a potential multiuser water network for the Huasco valley area of the Southern Atacama region of Chile.

Importantly, Hot Chili's second maritime concession application also includes brine discharge for potential seawater desalination operations on the Huasco coastline so that both raw seawater and desalinated water could be provided by a potential water network.

In addition, the company is also preparing to transfer its water assets (maritime concession, costal land accesses and water pipeline easements etc.) into a new stand-alone water company controlled by Hot Chili.

These next steps follow positive initial engagement with several potential desalinated water customers in the Huasco valley area as well as several suitable water infrastructure partners. The company is pleased to be positioning its water assets to potentially generate significant value for Hot Chili's shareholders.

Hot Chili is the only company in the region holding a current granted maritime water concession for extraction, a current maritime application for extraction and desalinated discharge, and most necessary permits to provide critical desalinated water supply to the Huasco valley, following over a decade of permitting advance for the company's coastal range, Costa Fuego copper-gold project.

While Costa Fuego's mine development plan considers the use of raw seawater for future processing, the company's recently announced water supply concept study (see announcement dated Feb. 26, 2024) confirmed the potential to also develop a large, multiuser, desalinated water supply business in the Huasco valley area.

A water supply business case study is under way, and the company has been engaging with potential desalination water customers, potential infrastructure partners and Chilean government regulators since announcement of the outcomes of the water supply concept study.

The second maritime concession application is a key next step to developing a potential desalinated water business to supply community, agricultural and new mining demand of up to 3,700 litres per second (l/s) over the long term in the Huasco Valley.

Leveraging Hot Chili's water assets to enable the development of multiple, nearby, large-scale mining projects, comes at a time where Chile's government is actively encouraging investment in multiuser desalination water networks in the Atacama.

Hot Chili's executive vice-president, Jose Ignacio Silva, said:

"Water scarcity is the critical issue for new mine developments in the Atacama on both the Chilean and Argentinean side of the Andes. Hot Chili is the only company holding most of the necessary permits required to provide desalinated water to the Huasco valley -- a prolific region for potential new global copper supply needed to support global electrification and decarbonation. Securing these assets has involved over a decade of commitment.

"Socially and environmentally, multiclient and multipurpose water infrastructure is the new reality."

The company looks forward to providing further updates on its Costa Fuego copper-gold project and its water business case study for the Huasco valley of Chile.

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.

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