[Music] thank you welcome to CEO insights I'm Marilyn De Guzman with investing News Network today I'm speaking with Christian Easter Day CEO and managing director of hot chili limited a copper exploration and development company operating in Chile hi question hi Mary Lynn nice to be with you today yes good to have you so for our viewers who may not be familiar with hot chili could you just give us an overview of the company sure Mary Lynn well we're uh we're an ISX and tsxv dual listed


company we also trade on the OTC QB under hch we've been developing a large-scale copper production Hub on the Chilean Coastline since 2010 with the company's listing and actually prior for that so we started the company in 2008 privately uh so we have uh we have now assembled uh one of the largest undeveloped copper projects in the world outside of the major mining companies um a top 10 as rated by s p uh we have around 3.4 million tons of contained copper three million ounces of gold uh in two very


large scale assets that are situated very uniquely at low altitude um right next to Port infrastructure and on the Pan-American Highway uh the project uh has seen um over 200 million dollars of investment to date and uh and we're currently about to put out our first uh preliminary economic assessment for a combined large-scale operation uh that is positioned to have us in production this decade one of only a handful of plus 100 000 ton projects that will be in production this decade and uh and I guess that that that really


has us um firmly in the sights of uh of of where the copper sector is going to be requiring a lot more metal to meet the future electrification of the world and decarbonization uh goals so um so we're we're um in a very exciting position uh bringing you forward a very Advanced large-scale copper asset right so now your operation is in Chile and um you know I want to get your thoughts on a recent Announcement by Chile's president uh Gabriel borick requiring companies to partner with the


government and any of the extraction operations so I wonder what your comments are on on that announcement because it's it's um it's really been in the news for the past couple days yeah yeah look it um it's uh these kind of things that we we always are apprised of and keep up to date with um as a as an equity uh company you know in in uh in Chile and um a significant investor in in the country um you know we've been uh following the the Constitutional uh process for the past two years which uh which which


ultimately ended in no constitutional change um and we've been following the taxation discussions which uh which just recently in the cesco week um the the boric government uh made some statements there in terms of its um its advancement towards proposing a a further ad valarum uh royalty on the sector um currently you know chilly and I guess while the world's eyes are on chili is chili sits in this this very unique position that it is really almost the Saudi Arabia of what is about to occur in the


electrification of the world it's uh it holds of the largest reserves of lithium in the world um and produces about a third of the world's lithium and currently produces about a third of the world's copper two of the key elements for the uh electrical revolution of the world and and and and I guess you know that means that um boric government um in line with their policies um and in front of uh the next elections which will decide on the balance of power in terms of where things go uh are


making statements um towards their initial commitments when they were elected um lithium I I've seen these headlines over the past few days that lithium is going to be nationalized so I just want to sort of put a fact check on all of the clickbait media that is being written right now lithium has been nationalized in Chile for 50 years of the agreements that Albemarle have out to 2000 2043 I believe in the current agreement in place with sakumich the only two producers in Chile um they were agreements that were made


with the state um and are in effect and will be in effect to the end of those contracts uh what Warwick has effectively announced is that now Chile um and the and and the the state will be inviting new Public Partnerships um with the state for new contracts and inviting sulky Mitch and Albemarle 2 to sit down and negotiate what their next contracts will look like so um lithium was was classed as a as a strategic metal uh many years ago along with some other metals such as uranium and uh and those things are The Preserve


of the Chilean state so this is about them putting out a road map for how Chile is actually going to start developing a huge amount of untapped lithium resources and for that to occur in partnership with the state so that's really what's occurred um and I think that uh that that Chile is is is very much in keeping what with what is already established in the country this is not a new thing that is occurring as you would probably get the impression from some of the headlines going around Maryland


right so it's it's uh it's something that's Chile has been doing in the past so um I wonder though as a some some you know a company that's in the copper sector um is that something that you're anticipating that Chile might be moving towards as well or is that something being done already or um uh in in in in one word no um Chile as uh and you have to delve into the history of of what occurred um the last time that Chile went down the path of nationalization it created uh kadelco for copper created a sakumich


for lithium it created CMP cap group across iron ore um so those were the three big Chilean companies that came out of that last period um and as history will serve uh you know the reforms that occurred through the Pinochet era and and and a lot of the modern reform of the Chilean economy that is often referred to as the period that created the the Latin American Miracle um and the strength of the chill million investment framework that has brought the world's largest resource companies to bear and to unlock all of that


revenue for the state that goes through copper in particular and and last year I think that lithium might have just overtaken copper in terms of State take um you know that is really what has driven the the Chilean economy um and the standard of living in Chile and one of the broadest middle casters that has developed in Latin America and I don't think that that is something that that any in government in Chile um left cool right wants to revisit what what occurred with um with that that that uh period that I think that um you


know that that Chile has really moved on from and evolved and and so I I think that in a word no would be my answer to anything that is not classed already as a strategic metal for the company for the country right well that's that's a very interesting you know historical perspective and thanks for that uh you know giving providing that background on on what's going on there um now let's talk about your uh cost of fuego project agility could you give us uh sort of an update on what's going on


with that project sure well look Mary Elena as as a lot of people will have seen with our announcements at the end of last year um we were able to take a series of next steps on consolidation um we're really ultimately looking at putting an entire Regional consolidation play together here um developing one processing facility on the coast connecting import infrastructure power taking advantage of all of the advanced permitting that we've that we've put together over the past decade and looking to leverage that


against all of the assets in the region we have a Hubble ready that is being studied at pre-feasibility level for 100 000 tons of copper production and around fifty thousand to seventy thousand ounces gold production annually for a multi-decade project and I guess we were able to put that pre-feasibility on pause um take an opportunity to utilize this year uh to see if we could scale the operation up towards a 150 000 ton per annum play and that would make uh the cost of Lego project and hot chili


um the largest copper developer on the ISX by resource size or by scale but most importantly um what that was about was getting the economics to where we've always felt this project could get to um 150 000 ton production bases obviously give you a scale up and give you the opportunity to move towards first quartile total cash costs and that is about providing a very robust new copper producer for the market in the near term so what we're doing now is we're going through a growth phase we've just


completed a phase of drilling or new land acquired in an option agreement with antifaghast and minerals we'll be moving to a second phase program starting to also hit some of our expiration Targets on this very large land holding and we're also very busy on continuing our discussions with regional land holders holding other opportunities within this basket that we have interest in in tying in um and and obviously that's that's something that always goes on in the background with hot chili we're we are


known for our deal making we have put the entire project um and cobbled it together um over over 20 deals in the past 13 years on this part of the coastline and we'll continue to uh to see if we can grow this through further consolidation also right and and like I think and so one of the most you know interesting aspect of this project is your um your water supply um you've um you know one of your one of your de-risking strategy securing that water supply did you talk about um that aspect of it and why how it


differs from your other from the other copper projects yeah look um I I I've been starting to speak about water uh more and more Mary Lynn and that's really out of the growing realization that we we hold a very very critical um a critical asset and you know it took us 10 years of application to secure our Maritime concession to actually extract sea water out our all bodies are very favorable uh in terms of their overall recoveries produce better recoveries using raw seawater so you know firstly that that sets us apart


in terms of further um Capital that we don't have to spend on expensive pipelines to go to 4 500 meters and expensive desalination water plants um that add an extra billion dollars on your your startup Capital so we avoid that uh and we we now hold um the license to extract all of the sea water we require for building this operation um it took 10 years to secure um and then it took another two years to secure a the actual right of access on the coastline um associated with that Maritime concession so 12 years has us positioned


in a very unique spaces one of the only non-majors holding holding our actual Maritime concession so um that gives us the keys to the Future water supply in the Wasco region it's something that we're well aware of it's uh it's a dollar sign asset if we wanted to sell it um but most importantly it's leverage to us to allow us to to dream a bit bigger on the project um and uh and I think that that it's it's one of the real key differentiator if you look at some of the other peer


projects in our space not only do they have to Wrangle with high out high elevation and extra Capital required to build those projects and operate in costs but um extracting water from the ground in Chile is something that will not occur for any future projects and all existing projects are looking at extracting seawater primary and then deciding on whether it needs to go into a decel plant or not um so so that is something that that that is the condition in Chile going forward uh and we recognize that over 10


years ago and we put plans in place that have us um in this position so what we have now is a lot of peer projects that are actually held up in terms of being able to come to production because they don't have those water rights and if they are buying them or tapping off from others then they've got a lot of infrastructure that they need to build but no water will be coming out of the ground in Chile for mining in the future wow and you know as you said it's 12 years right that really puts it into


perspective how you know how long these projects take to develop release right that's right so you know having things such as water rights um we were also given the final connection to the major substation of the central power grid of Chile last year um having easement corridors having the surface rights tied up all of these things you know a wide copper projects large copper projects and jurisdictions like this they take about 20 years um to go from Discovery through production um it's funny you know I often in


Australia we talk about this and you you you say those things and the next question that you get and sometimes from mining Executives is they say well okay so what's stopping you um financing this and starting to build it and you've just actually said uh what you've said and um it seems to go completely over people's heads that the time investment in getting one of these things up and I'm talking about a meaningful production base in Copper a hundred thousand tonnas and above um is


where that club starts um and without those projects we have no chance in supplying the world the type of copper it's going to require over the next decade and that has been um I guess you know very transparent in in most of the industry's expectation of where copper is about to go so we cannot develop and put into production a new Escondida the world's largest copper mine currently into production one of those a year for the next 10 years it is just not going to be possible well the world definitely is watching to


see you know where the next new copper mine will come from so looking forward to hearing more news from your company in your project yeah I appreciate your time Mary Lynn thanks for watching join us again next time for another engaging conversation on CEO insights foreign