Hot Chili Limited announces capital raising through private placement

Hot Chili Limited (ASX: $HCH) has engaged joint lead managers to undertake a capital raising by way of a private placement of shares to institutional, professional, and other investors, aiming to raise up to A$29.9 million. The placement will not be subject to shareholder approval and will be made within the company's 25% placement capacities under Australian Securities Exchange (ASX) listing rules 7.1 and 7.1A. The issue price of A$1.00 per Share represents an approximate 20% discount to the company's last closing price and an approximate 18.6% discount to the 10-day volume weighted average price of Hot Chili shares traded on ASX prior to the Company entering into a trading halt on 1 May 2024.

Executive commentary on capital raising and use of funds

The purpose of the capital raising is to accelerate the company's growth and development plans, particularly in its advanced Costa Fuego copper-gold development and Water Supply Studies. The Managing Director and Chief Executive Officer, Mr Christian Easterday, stated that the increasing interest from potential strategic funding parties, combined with a rising copper price environment, provides confidence to pursue the company's ambitions while maintaining control of its assets. The proceeds from the placement will be used for various activities including the completion of the Costa Fuego Pre-Feasibility Study, Water Supply Business Case Study, Environmental Impact Assessment, ongoing exploration, drilling, consolidation activities, and general working capital purposes.

Summary of Hot Chili's capital raising and outlook

Hot Chili Limited (ASX: $HCH) has engaged joint lead managers to undertake a capital raising by way of a private placement to raise up to A$29.9 million. The company aims to utilize the proceeds to accelerate its growth and development plans, particularly in the advanced Costa Fuego copper-gold development and Water Supply Studies. The placement is expected to increase the company's trading liquidity on the TSXV and maintain its strategic funding optionality. Hot Chili aims to ensure that Costa Fuego remains 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. The company will pay a cash commission to the Agents equal to 6.0% of the gross proceeds of the Placement and, subject to the approval of Hot Chili shareholders, will issue non-transferable and unlisted options in the Company as part of the Placement. The company anticipates making an announcement regarding the result of the Placement prior to the commencement of trading on ASX on Monday, 6 May 2024 (AEST).