Mr. Christian Easterday reports

HOT CHILI SECURES LARGE ADDITION TO ITS COSTA FUEGO COASTAL COPPER HUB IN CHILE

Hot Chili Ltd. has completed another significant step in the company's consolidation efforts at its Costa Fuego copper-gold project in the coastal range of the Atacama region, Chile. All amounts in this news release are in U.S. dollars unless otherwise noted.

The company has secured an option to acquire concessions known as the Domeyko cluster or Domeyko within the historical Domekyo copper-gold mining centre, located approximately 30 kilometres south of Hot Chili's planned central processing location (at Productora) for Costa Fuego.

Importantly, Domeyko is the largest land consolidation undertaken by Hot Chili since Cortadera was added to Costa Fuego in 2019. Domeyko covers an area of 141 square km and represents a 25-per-cent lift in Hot Chili's total landholding area at Costa Fuego.

The Domeyko landholding comprises several new tenement applications in addition to an option agreement to acquire 100-per-cent interests in several key tenements covering a highly prospective, 10 km long copper-gold mineralization corridor.

Further discussions for consolidation are under way on additional advanced opportunities within the area.

The Domeyko mining centre hosts several significant historical copper-gold mines, which were principally exploited for oxide mineralization with very limited exploration undertaken for copper sulphide mineralization within the area. Both porphyry and structurally hosted styles of mineralization are present.

Historical exploration data sets are being compiled and reviewed across several highly prospective targets previously identified but never drill tested. The company's exploration team have commenced site visits and regional exploration campaigns (mapping and surface geochemistry) are planned to commence in the coming weeks.

This new landholding significantly strengthens the company's pipeline of opportunities for the discovery of new mineral resources to further enhance the potential scale of Costa Fuego.

Costa Fuego copper-gold project -- near-term, meaningful, copper supply

The company's recently published technical report entitled "Costa Fuego Copper Project NI 43-101 Technical Report Mineral Resource Estimate Update" and dated April 8, 2024, with an effective date of Feb. 26, 2024, confirms Costa Fuego as a low-risk, long-life copper project benefiting from a low capital intensity per pound of copper produced and a high annual copper equivalent metal production profile of over 100,000 tonnes for a 16-year mine life, including 95,000 t copper and 49,000 ounces gold during primary production (first 14 years) at C1 cash cost of $1.33/pound (estimated net of byproduct credits).

Hot Chili is on track to deliver of the Costa Fuego prefeasibility study (PFS) in H2 2024 and is one of a limited number of globally significant copper developments, not owned by a major mining company, that could deliver meaningful new copper supply this decade.

Material terms of the executed Domeyko option agreement:

• Hot Chili's subsidiary Sociedad Minera La Frontera Spa (La Frontera) has executed an option agreement with a private Chilean syndicate holding 100-per-cent interests in 12 exploration and 14 exploitation concessions for the grant to La Frontera of an option to acquire a 100-per-cent interest in the concessions.
• The other parties to the option agreement are Sociedad Legal Minera Unes Una de la Quebrada San Antonio (SLMQ), Compania Minera Algarrobo Ltda.) (CMAL) and John Arturo Hunter Flores (JHF), collectively, the owners.
• The option agreement also includes any water rights that may correspond to the properties, mining easements and rights of any kind over the corresponding surface lands and all other rights and permits that are legally annexed to the properties.
• The total price to acquire the Domeyko project if the option is exercised is $4-million payable as follows:
  • Non-refundable cash payment of $120,000 within 60 days of execution of the option agreement, subject to due diligence by La Frontera;
  • Non-refundable cash payment of $100,000 within 12 months of the date of the option agreement to maintain the option;
  • Non-refundable cash payment of $100,000 within 24 months of the date of the option agreement to maintain the option;
  • Non-refundable cash payment of $200,000 within 36 months of the date of the option agreement to maintain the option;
  • Option may be exercised within 48 months of the date of the option agreement by a final non-refundable cash payment of $3.48-million.
• La Frontera is required to pay all annual patent costs for the Domeyko concessions for the 2024 period.
• The owners will also be granted a 1-per-cent net smelter return royalty over the option concessions on exercise of the Domeyko option. La Frontera will have a right of first refusal to buy back the NSR royalty.

The company looks forward to providing further updates on drilling, exploration and development study workstreams across the company's Costa Fuego copper-gold project. Further updates on progress of the company's regional water supply business case study are also expected.

Qualifying statements

Technical report

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

Qualified persons -- NI 43-101

The technical report 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 technical report, which was prepared by the following independent qualified persons (within the meaning of NI 43-101):

• Elizabeth Haren (MAUSIMM (CP) and 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) of ABGM Consulting Pty. Ltd. -- mine planning and scheduling;
• Edmundo Laporte (PE) of GAC -- environmental studies, permitting, and social or community impact;
• Dave Morgan (PE) of Knight Piesold -- project infrastructure (TSF).

The independent qualified persons have verified the information disclosed in the technical report, 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 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.

We seek Safe Harbor.