Highlights
Costa Fuego Copper-Gold Project Preliminary Economic Assessment (PEA)1 Outlines One of World's Lowest Capital Intensity, Major Copper Developments
- Strong Economics: Costa Fuego PEA delivers using an 8% discount rate and long-term metal price assumptions of
US$3.85 /lb copper (Cu) andUS$1,750 /oz gold (Au) - Base-case post-tax Net Present Value (NPV8%) of
US$1.10 Billion (approximately, within a range ofUS$733 Million toUS$1.46 Billion ) and Internal Rate of Return (IRR) of 21% (approximately, within a range of 17% to 25%) Low Start-up Capital :US$1.05 Billion estimated, resulting in fast 3.5-year payback. Initial phases of open pit mining fully fund development of a bulk underground operation- Low Capital Intensity: One of the lowest capital intensities of global copper development projects
- Approximately 112 ktpa Average CuEq2 Production Rate: Including 95 kt Cu and 49 koz Au during primary production (first 14 years) at C1 Cash Cost[3] of
US$1.33 /lb (estimated, net of by-product credits) - Initial
Mine Life : 16-years with 1.41 Mt Cu and 718 koz Au produced for total revenue of approximatelyUS$13.52 Billion and total free cash flow of approximatelyUS$3.28 Billion (post-tax, after operating costs, capital costs, and royalties)
- Strong endorsement from a leading North American royalty-streaming group with funds to be used to advance the Costa Fuego Pre-feasibility Studies (PFS), resource growth drilling programmes and general project advancement.
30,000 m drilling program across multiple targets to commence shortly
Single, Large Pit Scenario for Cortadera being studied in H2 2023
Strong Cash balance of
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1 The PEA is preliminary in nature and includes 3% of production feed from Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as Mineral Reserves (NI 43-101) or Ore Reserves (JORC 2012), and there is no certainty that the PEA will be realised. Mineral Resources that are not Mineral Reserves or Ore Reserves do not have demonstrated economic viability. References to "Mineral Reserves" in this announcement include Ore Reserves (JORC 2012). See page 39 for additional cautionary language. |
For more information please contact:
Managing Director – | Tel: +61 8 9315 9009 Email: admin@hotchili.net.au
| |
Company Secretary – | Tel: +61 8 9315 9009 Email: admin@hotchili.net.au
| |
Harbor Access Investor & Public Relations ( | Email: Graham.Farrell@harbor-access.com Email: jonathan.paterson@harbor-access.com |
or visit
Cautionary Statement – JORC Code (2012)
The Preliminary Economic Assessment referred to in this report is equivalent to a Scoping Study under JORC Code (2012) reporting guidelines. It has been undertaken for the purpose of initial evaluation of a potential development of the |
SUMMARY OF OPERATIONAL ACTIVITIES
Costa Fuego Copper-Gold Project Preliminary Economic Assessment (PEA)1 Outlines One of World's Lowest Capital Intensity, Major Copper Developments
The Costa Fuego PEA has been prepared by
The Costa Fuego PEA presents the largest copper development project listed on the
The strong economics of Costa Fuego are described below in Table 1, using financial assumptions of an 8% discount rate and long-term metal price assumptions for the base case of
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1 The PEA is preliminary in nature and includes 3% of production feed from Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as Mineral Reserves (NI 43-101) or Ore Reserves (JORC 2012), and there is no certainty that the PEA will be realised. Mineral Resources that are not Mineral Reserves or Ore Reserves do not have demonstrated economic viability. References to "Mineral Reserves" in this announcement include Ore Reserves (JORC 2012). See page 19 for additional cautionary language. |
Table 1. Copper Price Ranges: Lower-, Base-, and Upper-Case Scenarios1,2
Project Metric | Units | Copper Price | |||
Lower ( | Base ( | Upper ( | |||
Pre-Tax | NPV8% | US$M | 1,046 | 1,540 | 2,029 |
IRR | % | 19 % | 24 % | 29 % | |
Post-Tax | NPV8% | US$M | 733 | 1,100 | 1,463 |
IRR | % | 17 % | 21 % | 25 % | |
Annual Average Revenue | US$M | 779 | 845 | 911 | |
Annual Average EBITDA | US$M | 384 | 445 | 506 | |
Annual Average Free Cash Flow | US$M | 226 | 271 | 315 | |
Payback period (From First Production) | years | 4.25 | 3.50 | 3.25 | |
Post-Tax NPV8% / | 0.7 | 1.1 | 1.4 |
Within the base-case scenario of the PEA, the positive economics shown in Table 2 outline a project that leverages its low-elevation advantage to achieve low start-up capital costs and consequently one of the lowest capital intensities of global copper development projects at this scale. Annual average revenue of around
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1 Certain terms of measurement used in this news release are not performance measures reported in accordance with International Financial Reporting Standards ("IFRS"). Non-IFRS terms measures used such as "Cash Cost", "All-in Sustaining Costs", "C1", "Expansion Costs", "Free Cashflow" and "All-in costs" are included because these statistics are measures that management uses internally to evaluate performance, to assess how the Project ranks against its peer projects and to assess the overall effectiveness and efficiency of the contemplated mining operations. These performance measures do not have a meaning within IFRS and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS. |
2 The PEA is preliminary in nature and includes 3% of production feed from Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as Mineral Reserves, and there is no certainty that the PEA will be realised. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. See page 19 for additional cautionary language. |
Table 2: Costa Fuego PEA1 Economic Highlights2- Base Case
Project Metric | Units | Estimated | ||
Financial Measures | ||||
Pre-tax | Cu | NPV8% | US$M | 1,540 |
IRR | % | 24 | ||
Post-tax | Cu | NPV8% | US$M | 1,100 |
IRR | % | 21 | ||
Payback period (from start of operations) | years | 3.5 | ||
Open Pit Strip Ratio | W/P | 1.8 | ||
Post-tax NPV/Start-up Capex | Ratio | 1.1 | ||
Capital Costs Costs2 | ||||
Total Pre-production Capital Expenditure | US$M | 1,046 | ||
Expansion | US$M | 708 | ||
Sustaining | US$M | 1,014 | ||
Total | US$M | 2,768 | ||
Operating Costs2 | ||||
C1 | $/lb Cu | 1.33 | ||
Total Cash Cost (net by-products and including royalties) | $/lb Cu | 1.43 | ||
All-in-Sustaining Cost | $/lb Cu | 1.74 | ||
All-In Cost LOM | $/lb Cu | 2.31 | ||
Primary Mine Production Including Ramp-up | years | 14 | ||
years | 16 | |||
Primary Mine Production – Average Annual Copper Equivalent Metal[9] | kt | 112 | ||
Primary Mine Production – Average Annual Copper Metal | kt | 95 | ||
Primary Mine Production – Average Annual Gold Metal | koz | 49 |
Following the pre-production Capital Cost of around
Operating costs for Costa Fuego average (estimated net of by-products) a C1 Cash Cost of
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1 The PEA is preliminary in nature and includes 3% of production feed from Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as Mineral Reserves, and there is no certainty that the PEA will be realised. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. See page 39 for additional cautionary language. |
2 Certain terms of measurement used in this news release are not performance measures reported in accordance with International Financial Reporting Standards ("IFRS"). See page 40 for full non-IFRS measures disclaimer. |
3 Includes Payability |
4 The copper-equivalent (CuEq) annual production rate was based on the combined processing feed (across all sources) and used long-term commodity prices of: Copper |
The Costa Fuego life-of-mine processing runs for 16-years, producing an estimated 1.41 Mt of copper and 718 koz of gold (plus 22 kt of molybdenum and 1.7 Moz of silver) for total revenue of approximately
Revenues from the PEA metal payload are described in Table 3 below, with 85% of revenue deriving from copper. Costa Fuego is highly leveraged to the copper price, with analysis identifying that for every
Table 3: Costa Fuego Revenue Breakdown1
LOM Revenue Contribution | Revenue (US$M) | % of Total |
Copper in Concentrate | 10,342 | 76 % |
Copper Cathode | 1,218 | 9 % |
Gold | 1,132 | 8 % |
Molybdenum | 799 | 6 % |
Silver | 32 | 0.2 % |
Total | 13,523 | 100 % |
30,000 m drilling program across multiple targets to commence shortly
The Company plans to rapidly begin drilling high priority growth targets proximal to the current resource. Drilling will also test promising greenfield targets as shown in Figure 1. Further strategic regional consolidation options are concurrently being pursued, with mineral resource estimate upgrades expected in Q4 2023 and H1 2025.
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1 Includes Payability |
Figure 1. Exploration Growth Targets Across the
Figure 2. Cortadera Porphyry Expansion Targets1
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1 Refer to announcement dated |
Single, Large Pit Scenario for Cortadera being studied in H2 2023
The Company is investigating a large single open pit scenario for Cortadera (no underground block cave) with the potential to materially increase processing feed inventory and mine-life.
This scenario would necessitate a second PEA, studied while refining of the model inputs for metallurgy, geotechnical engineering and hydrogeology, to be incorporated into the Pre-feasibility. Once both PEA scenarios are assessed, the Company would select a single scenario to complete the final stages of its PFS for Costa Fuego, which is expected to be completed by H2 2024.
SUMMARY OF CORPORATE ACTIVITIES
The significant investment by Osisko provides strong endorsement from one of
US$15 million in funds for growth and development with the investment (Royalty Consideration) to be used to advance the Costa Fuego Pre-Feasibility Studies (PFS), resource growth drilling programmes and for the general advancement of the Project- Clear "look-through" value given the Osisko NSR is equivalent to a 1.12% CuEq1 NSR royalty across payable metals for
US$15 million andHot Chili's market capitalisation at the time of announcing the royalty wasUS$80 million - Buyback rights if a change of control event occurs prior to the fourth anniversary of Closing. The Osisko NSR can be reduced to 0.5% NSR royalty on copper and 2.5% NSR royalty on gold
- Osisko to have a Right of First Offer (ROFO) with respect to the sale of any future royalty, stream, or similar interests by
Hot Chili
Development and Growth Funding
The Investment by Osisko has strengthened the Company's cash position to approximately
- Commencement of 30,000 m drill program – preparations well-advanced, drilling operations set to commence in the coming week.
- Completion of Costa Fuego resource upgrade by late 2023.
- Delivery of Costa Fuego PFS by H2 2024 - The Company has already considerably advanced its PFS (approximately 80% complete) with minimal expenditure required for completion.
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1 CuEq considers assumed commodity prices and average metallurgical recoveries from test work. See qualifying statements on page 19. |
Figure 3. Costa Fuego Project Roadmap1
Figure 4. Location of the Costa Fuego Project Regionally in Relation to Key Infrastructure
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1 |
Drill Results Reported for Costa Fuego in Quarter 2 2023
No further drilling has been completed in Q2, subsequently there are no details to report.
Additional ASX Disclosure Information
ASX Listing Rule 5.3.2: There was no substantive mining production and development activities during the quarter.
ASX Listing Rule 5.3.3 - Schedule of Mineral Tenements as at
The schedule of Mineral Tenements and changes in interests is appended at the end of this activities report.
ASX Listing Rule 5.3.4: Reporting under a use of funds statement in a Prospectus does not apply to the Company currently.
ASX Listing Rule 5.3.5: Payments to related parties of the Company and their associates during the quarter per Section 6.1 of the Appendix 5B totaled
Health, Safety, Environment and Quality
Field operations during the period included geological reconnaissance activities, core-testing and logging, field mapping, and sampling exercises across the Cortadera, El Fuego and Productora landholdings. El Fuego field activities are run from the Cortadera operations centre and safety statistics are combined for reporting.
No safety incidents were recorded during the quarter. The Company's HSEQ quarterly performance is summarised in Table 3 below.
Table 3
Deposit | Productora | Cortadera | Las Cañas | |||
Timeframe | Q2 2023 | Cum. | Q2 2023 | Cum. | Q2 2023 | Cum. |
LTI events | 0 | 0 | 0 | 6 | 0 | 1 |
NLTI events | 0 | 2 | 0 | 5 | 0 | 1 |
Days lost | 0 | 0 | 0 | 152 | 0 | 23 |
LTIFR index | 0 | 0 | 0 | 24 | 0 | 170 |
ISR index | 0 | 0 | 0 | 596 | 0 | 3,898 |
IFR Index | 0 | 39 | 0 | 43 | 0 | 339 |
Thousands of manhours¹ | 2.1 | 51.2 | 7.9 | 257 | 0 | 5.9 |
Incidents on materials and assets | 0 | 0 | 0 | 0 | 0 | 0 |
Environmental incidents | 0 | 0 | 0 | 0 | 0 | 0 |
Headcount² | 4 | 11 | 15 | 37 | 0 | 21 |
Notes: HSEQ is the acronym for Health, Safety, Environment and Quality. LTIFR per million-manhours. Safety performance is reported on a monthly basis to the |
Tenement Changes During the Quarter
During the Quarter, the Company has renewed the mining exploration concessions Porfiada I (replaces Porfiada I, which expired on June, 14th, 2023), Porfiada II (replaces Porfiada II, which expired on July, 5th, 2023), Porfiada III (replaces Porfiada III, which expired on June, 15th, 2023) and Porfiada IV (replaces Porfiada IV, which expired on July, 5th, 2023).
The Company's existing tenements are detailed in the table below.
Table 4.
License ID | HCH % Held | HCH % Earning | Area (ha) | Agreement Details |
MAGDALENITA 1/20 | 100% Frontera SpA | 100 | ||
ATACAMITA 1/82 | 100% Frontera SpA | 82 | ||
AMALIA 942 A 1/6 | 100% Frontera SpA | 53 | ||
PAULINA 10 B 1/16 | 100% Frontera SpA | 136 | ||
PAULINA 11 B 1/30 | 100% Frontera SpA | 249 | ||
PAULINA 12 B 1/30 | 100% Frontera SpA | 294 | ||
PAULINA 13 B 1/30 | 100% Frontera SpA | 264 | ||
PAULINA 14 B 1/30 | 100% Frontera SpA | 265 | ||
PAULINA 15 B 1/30 | 100% Frontera SpA | 200 | ||
PAULINA 22 A 1/30 | 100% Frontera SpA | 300 | ||
PAULINA 24 1/24 | 100% Frontera SpA | 183 | ||
PAULINA 25 A 1/19 | 100% Frontera SpA | 156 | ||
PAULINA 26 A 1/30 | 100% Frontera SpA | 294 | ||
PAULINA 27A 1/30 | 100% Frontera SpA | 300 | ||
CORTADERA 1 1/200 | 100% Frontera SpA | 200 | ||
CORTADERA 2 1/200 | 100% Frontera SpA | 200 | ||
CORTADERA 41 | 100% Frontera SpA | 1 | ||
CORTADERA 42 | 100% Frontera SpA | 1 | ||
LAS CANAS 16 | 100% Frontera SpA | 1 | ||
LAS CANAS 1/15 | 100% Frontera SpA | 146 | ||
CORTADERA 1/40 | 100% Frontera SpA | 374 | ||
LAS | 100% Frontera SpA | 300 | ||
CORROTEO 1 1/260 | 100% Frontera SpA | 260 | ||
CORROTEO 5 1/261 | 100% Frontera SpA | 261 | ||
ROMERO 1 AL 31 | 100% Frontera SpA | 31 | ||
PURISIMA | 100% Frontera SpA | 20 | NSR 1.5% |
Note. Frontera SpA is a 100% owned subsidiary company of |
License ID | HCH % Held | HCH % Earning | Area (ha) | Agreement Details |
FRAN 1, 1-60 | 80% SMEA SpA | 220 | ||
FRAN 2, 1-20 | 80% SMEA SpA | 100 | ||
FRAN 3, 1-20 | 80% SMEA SpA | 100 | ||
FRAN 4, 1-20 | 80% SMEA SpA | 100 | ||
FRAN 5, 1-20 | 80% SMEA SpA | 100 | ||
FRAN 6, 1-26 | 80% SMEA SpA | 130 | ||
FRAN 7, 1-37 | 80% SMEA SpA | 176 | ||
FRAN 8, 1-30 | 80% SMEA SpA | 120 | ||
FRAN 12, 1-40 | 80% SMEA SpA | 200 | ||
FRAN 13, 1-40 | 80% SMEA SpA | 200 | ||
FRAN 14, 1-40 | 80% SMEA SpA | 200 | ||
FRAN 15, 1-60 | 80% SMEA SpA | 300 | ||
FRAN 18, 1-60 | 80% SMEA SpA | 273 | ||
FRAN 21, 1-46 | 80% SMEA SpA | 226 | ||
ALGA 7A, 1-32 | 80% SMEA SpA | 89 | ||
ALGA VI, 5-24 | 80% SMEA SpA | 66 | ||
MONTOSA 1-4 | 80% SMEA SpA | 35 | NSR 3% | |
CHICA | 80% SMEA SpA | 1 | ||
ESPERANZA 1-5 | 80% SMEA SpA | 11 | ||
LEONA 2A 1-4 | 80% SMEA SpA | 10 | ||
CARMEN I, 1-50 | 80% SMEA SpA | 222 | ||
80% SMEA SpA | 274 | |||
ZAPA 1, 1-10 | 80% SMEA SpA | 100 | ||
ZAPA 3, 1-23 | 80% SMEA SpA | 92 | ||
ZAPA 5A, 1-16 | 80% SMEA SpA | 80 | ||
ZAPA 7, 1-24 | 80% SMEA SpA | 120 | ||
CABRITO, CABRITO 1-9 | 80% SMEA SpA | 50 | ||
80% SMEA SpA | 255 | |||
80% SMEA SpA | 139 | |||
80% SMEA SpA | 255 | |||
80% SMEA SpA | 3 | |||
80% SMEA SpA | 1 | |||
CHOAPA 1-10 | 80% SMEA SpA | 50 | ||
ELQUI 1-14 | 80% SMEA SpA | 61 | ||
LIMARÍ 1-15 | 80% SMEA SpA | 66 | ||
LOA 1-6 | 80% SMEA SpA | 30 | ||
MAIPO 1-10 | 80% SMEA SpA | 50 | ||
TOLTÉN 1-14 | 80% SMEA SpA | 70 | ||
CACHIYUYITO 1, 1-20 | 80% SMEA SpA | 100 | ||
CACHIYUYITO 2, 1-60 | 80% SMEA SpA | 300 | ||
CACHIYUYITO 3, 1-60 | 80% SMEA SpA | 300 | ||
LA PRODUCTORA 1-16 | 80% SMEA SpA | 75 | ||
80% SMEA SpA | 82 | |||
80% SMEA SpA | 35 | |||
URANIO, 1-70 | 0 % | 0 % | 350 | 25-year Lease Agreement |
JULI 9, 1-60 | 80% SMEA SpA | 300 | ||
JULI 10, 1-60 | 80% SMEA SpA | 300 | ||
JULI 11 1/60 | 80% SMEA SpA | 300 | ||
JULI 12 1/42 | 80% SMEA SpA | 210 | ||
JULI 13 1/20 | 80% SMEA SpA | 100 | ||
JULI 14 1/50 | 80% SMEA SpA | 250 | ||
JULI 15 1/55 | 80% SMEA SpA | 275 | ||
JULI 16, 1-60 | 80% SMEA SpA | 300 | ||
JULI 17, 1-20 | 80% SMEA SpA | 100 | ||
JULI 19 | 80% SMEA SpA | 300 | ||
JULI 20 | 80% SMEA SpA | 300 | ||
JULI 21 1/60 | 80% SMEA SpA | 300 | ||
JULI 22 | 80% SMEA SpA | 300 | ||
JULI 23 1/60 | 80% SMEA SpA | 300 | ||
JULI 24, 1-60 | 80% SMEA SpA | 300 | ||
JULI 25 | 80% SMEA SpA | 300 | ||
JULI 27 1/30 | 80% SMEA SpA | 150 | ||
JULI 27 B 1/10 | 80% SMEA SpA | 50 | ||
JULI 28 1/60 | 80% SMEA SpA | 300 | ||
JULIETA 5 | 80% SMEA SpA | 200 | ||
JULIETA 6 | 80% SMEA SpA | 200 | ||
JULIETA 7 | 80% SMEA SpA | 100 | ||
JULIETA 8 | 80% SMEA SpA | 100 | ||
JULIETA 9 | 80% SMEA SpA | 100 | ||
JULIETA 10 1/60 | 80% SMEA SpA | 300 | ||
JULIETA 11 | 80% SMEA SpA | 300 | ||
JULIETA 12 | 80% SMEA SpA | 300 | ||
JULIETA 13, 1-60 | 80% SMEA SpA | 298 | ||
JULIETA 14, 1-60 | 80% SMEA SpA | 269 | ||
JULIETA 15, 1-40 | 80% SMEA SpA | 200 | ||
JULIETA 16 | 80% SMEA SpA | 200 | ||
JULIETA 17 | 80% SMEA SpA | 200 | ||
JULIETA 18, 1-40 | 80% SMEA SpA | 200 | ||
ARENA 1 1-6 | 80% SMEA SpA | 40 | ||
ARENA 2 1-17 | 80% SMEA SpA | 113 | ||
ZAPA 1 – 6 | 80% SMEA SpA | 6 | GSR 1% | |
JULIETA 1-4 | 80% SMEA SpA | 4 |
Note. SMEA SpA is subsidiary company - 80% owned by |
Licence ID | HCH % Held | HCH % Earning | Area (ha) | Exploration and Expenditure Commitment- |
90% Frontera SpA | 76 | 90% (HCH)-10% ( 6-year term. | ||
90% Frontera SpA | 26 | |||
Santiago A, 1 al 26 | 90% Frontera SpA | 236 | ||
Santiago B, 1 al 20 | 90% Frontera SpA | 200 | ||
Santiago C, 1 al 30 | 90% Frontera SpA | 300 | ||
Santiago D, 1 al 30 | 90% Frontera SpA | 300 | ||
Santiago E, 1 al 30 | 90% Frontera SpA | 300 | ||
Prima Uno | 90% Frontera SpA | 1 | ||
Prima Dos | 90% Frontera SpA | 2 | ||
90% Frontera SpA | 25 | |||
90% Frontera SpA | 25 | |||
90% Frontera SpA | 75 | |||
Mercedes 1 al 3 | 90% Frontera SpA | 50 | ||
Kreta 1 al 4 | 90% Frontera SpA | 16 | ||
Mari 1 al 12 | 90% Frontera SpA | 64 | ||
PORFIADA VII | 90% Frontera SpA | 300 | ||
PORFIADA VIII | 90% Frontera SpA | 300 | ||
PORFIADA IX | 90% Frontera SpA | 300 | ||
PORFIADA X | 90% Frontera SpA | 200 | ||
PORFIADA A | 90% Frontera SpA | 200 | ||
PORFIADA B | 90% Frontera SpA | 300 | ||
PORFIADA C | 90% Frontera SpA | 300 | ||
PORFIADA D | 90% Frontera SpA | 300 | ||
PORFIADA E | 90% Frontera SpA | 300 | ||
PORFIADA F | 90% Frontera SpA | 300 | ||
PORFIADA G | 90% Frontera SpA | 200 | ||
CORTADERA 1 | 100% Frontera SpA | 200 | ||
CORTADERA 2 | 100% Frontera SpA | 200 | ||
CORTADERA 3 | 100% Frontera SpA | 200 | ||
CORTADERA 4 | 100% Frontera SpA | 200 | ||
CORTADERA 5 | 100% Frontera SpA | 200 | ||
CORTADERA 6 | 100% Frontera SpA | 300 | ||
CORTADERA 7, 1-20 | 100% Frontera SpA | 93 | ||
100% Frontera SpA | 200 | |||
100% Frontera SpA | 200 | |||
100% Frontera SpA | 300 | |||
100% Frontera SpA | 300 | |||
100% Frontera SpA | 300 | |||
DORO 1 | 100% Frontera SpA | 200 | ||
DORO 2 | 100% Frontera SpA | 200 | ||
DORO 3 | 100% Frontera SpA | 300 | ||
100% Frontera SpA | 300 | 100% HCH Purchase Option Agreement NSR 1.5% | ||
PORFIADA I | 100% Frontera SpA | 300 | ||
PORFIADA II | 100% Frontera SpA | 300 | ||
PORFIADA III | 100% Frontera SpA | 300 | ||
PORFIADA IV | 100% Frontera SpA | 300 | ||
PORFIADA V | 100% Frontera SpA | 200 | ||
PORFIADA VI | 100% Frontera SpA | 100 | ||
90% Frontera SpA | 10 | 90% (HCH) Option Agreement | ||
90% Frontera SpA | 90 | |||
CHILIS 1 | 100% Frontera SpA | 200 | ||
CHILIS 2 | 100% Frontera SpA | 200 | ||
CHILIS 3 | 100% Frontera SpA | 100 | ||
CHILIS 4 | 100% Frontera SpA | 200 | ||
CHILIS 5 | 100% Frontera SpA | 200 | ||
CHILIS 6 | 100% Frontera SpA | 200 | ||
CHILIS 7 | 100% Frontera SpA | 200 | ||
CHILIS 8 | 100% Frontera SpA | 200 | ||
CHILIS 9 | 100% Frontera SpA | 300 | ||
CHILIS 10 | 100% Frontera SpA | 200 | ||
CHILIS 11 | 100% Frontera SpA | 200 | ||
CHILIS 12 | 100% Frontera SpA | 300 | ||
CHILIS 13 | 100% Frontera SpA | 300 | ||
CHILIS 14 | 100% Frontera SpA | 300 | ||
CHILIS 15 | 100% Frontera SpA | 300 | ||
CHILIS 16 | 100% Frontera SpA | 300 | ||
CHILIS 17 | 100% Frontera SpA | 300 | ||
CHILIS 18 | 100% Frontera SpA | 300 | ||
SOLAR 1 | 100% Frontera SpA | 300 | ||
SOLAR 2 | 100% Frontera SpA | 300 | ||
SOLAR 3 | 100% Frontera SpA | 300 | ||
SOLAR 4 | 100% Frontera SpA | 300 | ||
SOLAR 5 | 100% Frontera SpA | 300 | ||
SOLAR 6 | 100% Frontera SpA | 300 | ||
SOLAR 7 | 100% Frontera SpA | 300 | ||
SOLAR 8 | 100% Frontera SpA | 300 | ||
SOLAR 9 | 100% Frontera SpA | 300 | ||
SOLAR 10 | 100% Frontera SpA | 300 | ||
SOLEDAD 1 | 100% Frontera SpA | 300 | ||
SOLEDAD 2 | 100% Frontera SpA | 300 | ||
SOLEDAD 3 | 100% Frontera SpA | 300 | ||
SOLEDAD 4 | 100% Frontera SpA | 300 | ||
CF 1 | 100% Frontera SpA | 300 | ||
CF 2 | 100% Frontera SpA | 300 | ||
CF 3 | 100% Frontera SpA | 300 | ||
CF 4 | 100% Frontera SpA | 300 | ||
CF 5 | 100% Frontera SpA | 300 | ||
CHAPULIN | 100% Frontera SpA | 3 | ||
100% Frontera SpA | 100 | |||
100% Frontera SpA | 50 | |||
100% Frontera SpA | 100 | |||
CF 6 | 100% Frontera SpA | 200 | ||
CF 7 | 100% Frontera SpA | 100 | ||
CF 8 | 100% Frontera SpA | 200 | ||
CF 9 | 100% Frontera SpA | 100 | ||
MARI 1 | 100% Frontera SpA | 300 | ||
MARI 6 | 100% Frontera SpA | 300 | ||
MARI 8 | 100% Frontera SpA | 300 | ||
FALLA MAIPO 2 1/10 | 100% Frontera SpA | 99 | ||
FALLA MAIPO 3 1/8 | 100% Frontera SpA | 72 | ||
FALLA MAIPO 4 1/26 | 100% Frontera SpA | 26 | ||
ARBOLEDA 7 1/2 | Option AMSA | 234 | 100% HCH Purchase Option Agreement | |
Option AMSA | 81 | |||
Option AMSA | 78 | |||
MONICA 21/40 | Option AMSA | 85 | ||
MONICA 41/52 | Option AMSA | 39 |
Note. Frontera SpA is a 100% owned subsidiary company of |
Qualifying Statements
Costa Fuego Combined Mineral Resource (Effective Date
1 Mineral Resources are reported on a 100% Basis - combining Mineral Resource estimates for the Cortadera, Productora and |
2 The Productora deposit is 100% owned by Chilean incorporated company Sociedad Minera El Aguila SpA (SMEA). SMEA is a joint venture (JV) company – 80% owned by Sociedad Minera El Corazón Limitada (a 100% subsidiary of |
3 The Cortadera deposit is controlled by a Chilean incorporated company Sociedad Minera La Frontera SpA (Frontera). Frontera is a subsidiary company – 100% owned by Sociedad Minera El Corazón Limitada, which is a 100% subsidiary of |
4 The San Antonio deposit is controlled through Frontera (100% owned by Sociedad Minera El Corazón Limitada, which is a 100% subsidiary of |
5 The Mineral Resource estimates in the tables above form coherent bodies of mineralisation that are considered amenable to a combination of open pit and underground extraction methods based on the following parameters: Base Case Metal Prices: Copper |
6 Metallurgical recovery averages for each deposit consider Indicated + Inferred material and are weighted to combine sulphide flotation and oxide leaching performance. Process recoveries: Cortadera and |
7 Resource Copper Equivalent (CuEq) grades are calculated based on the formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery)+(Au ppm × Au price per g/t × Au_recovery)+ (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu recovery). The base case cut-off grade for mineral resources considered amenable to open pit extraction methods at the Cortadera, Productora and |
8 Mineral resources are not mineral reserves and do not have demonstrated economic viability. These Mineral Resource estimates include Inferred Mineral Resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorised as Mineral Reserves. It is reasonably expected that the majority of Inferred mineral resources could be upgraded to Measured or Indicated Mineral Resources with continued exploration. |
9 The effective date of the estimate of Mineral Resources is |
10 Hot Chili Limited is not aware of political, environmental or other risks that could materially affect the potential development of the Mineral Resources |
Competent Person's Statement- Exploration Results
Exploration information in this Report is based upon work compiled by Mr
Disclaimer
Neither the
This report is to be used by the recipient for informational purposes only and does not purport to be complete or contain all the information that may be material to the current or future business, operations, financial condition, or prospects of
Certain information contained herein is based on, or derived from, information provided by independent third-party sources.
This report should not be considered as a recommendation from any person to purchase any securities. Each person for whom this report is made available should consult its own professional advisors in making its own independent investigations and assessment and, after making such independent investigations and assessments, as it deems necessary, in determining whether to proceed with any investment in the Company.
Technical Report
For readers to fully understand the information in this report, they should read the PEA Technical Report prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") (to be available on www.sedar.com or at www.hotchili.net.au within 45 days of
Qualified Persons – NI 43-101
The PEA was compiled by Wood Australia Pty Ltd with contributions from a team of independent Qualified Persons within the meaning of Canadian Securities Administrators' National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43 -101"). The scientific and technical information contained in this report pertaining to Coast Fuego has been reviewed and verified by the following independent qualified persons within the meaning of NI 43-101:
- Ms
Elizabeth Haren (MAUSIMM (CP) & MAIG) ofHaren Consulting – Mineral Resource Estimate - Mr
Dean David (FAUSIMM (CP)) ofWood Pty Ltd – Metallurgy - Mr
Piers Wendlandt (PE) ofWood Pty Ltd – Market Studies and Contracts, Economic Analysis - Farzard Kossari (PE) of
Wood Pty Ltd – Cost Estimation - Mr
Anton von Wielligh (FAUSIMM) ofABGM Consulting Pty Ltd – Mine Planning and Scheduling
The independent qualified persons have verified the information disclosed herein, including the sampling, preparation, security, and analytical procedures underlying such information.
Disclosure regarding mine planning and infrastructure has been reviewed and approved by Mr
Competent Persons – JORC
The information in this report that relates to Mineral Resources for the
- Ms
Elizabeth Haren (MAUSIMM (CP) & MAIG) ofHaren Consulting – Mineral Resource Estimate - Mr
Dean David (FAUSIMM (CP)) ofWood Pty Ltd – Metallurgy - Mr
Piers Wendlandt (PE) ofWood Pty Ltd – Market Studies and Contracts, and Economic Analysis - Mr Farzard Kossari (PE) of
Wood Pty Ltd – Cost Estimation - Mr
Anton von Wielligh (FAUSIMM) ofABGM Consulting Pty Ltd – Mine Planning and Scheduling
For further information on the
Cautionary Note for U.S. Investors Concerning Mineral Resources
National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") is a rule of the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Technical disclosure contained in this report has been prepared in accordance with NI 43-101 and the
All amounts in this report are in
Non IFRS Financial Performance Measures
"Total Cash Cost", "All-in Sustaining Cost", "All-in cost LOM", "C1", and "Free Cashflow" are not performance measures reported in accordance with International Financial Reporting Standards ("IFRS"). These performance measures are included because these statistics are key performance measures that management uses to monitor performance. Management uses these statistics to assess how the
Scientific and Technical Information
The scientific and technical information contained in this document was reviewed and approved by Ms
Sampling, Analysis and Data Verification
A fixed cone splitter was used to create two nominal 12.5% samples (Sample "A" and "B"), along with the large bulk reject sample. The "A" sample is always taken from the same sampling chute, and comprises the primary sample submitted to the laboratory. The "B" samples were retained for use as the field duplicate sample. The coarse residues were collected into large plastic bags and were retained on the ground near the drillhole collar, generally in rows of 50 bags.
All RC drillhole sampling was executed at two metre intervals for Costa Fuego. Within logged mineralisation zones, the 2-metre sample ("A" sample) was submitted. Outside the main mineralised zones (as determined by the logging geologist), 4-metre composites were created from scoops of 2-metre sample residues over this interval. The composited 4-metre samples were analysed first and, if required, the individual and original 2-metre "A" samples comprising this 4-metre interval were sent for analysis. This ensured that no mineralisation was missed while minimising analytical costs. The same procedure was applied to RC drilling undertaken across Productora, however, drillhole sampling was executed at 1-metre intervals.
At Costa Fuego, the majority of diamond core has had systematic half-core sampled at 2-metre intervals. Half-core was chosen as the preferred sampling method to ensure a representative sample was submitted for analysis, while also retaining half-core for review of lithology and mineralisation, and for further test work as required.
Prior to the cutting and sample process, two additional samples are also taken for Costa Fuego being Density and Geotechnical samples.
- Density samples are selected every 30 metres if the geological conditions allow it and are provided to the laboratory for testwork.
- Geotechnical samples are taken for tests including triaxial (one sample per 250 m) and uniaxial tests (one sample per 50 m).
Once assigned a sample number, individual samples to be sent to ALS laboratories were sealed using a staple gun and accompanied by three identical sample tickets (one stapled to plastic bag to identify any tampering/breakage of seal prior to opening at the laboratory in preparation and another placed in the bag). Any broken staple seals on samples were to be notified by ALS to
For both RC and diamond samples, sample bags were placed inside larger plastic bags and delivered by a dedicated truck to the ALS analytical laboratory in Coquimbo (
Following analysis at ALS, the RC and diamond drilling coarse rejects were returned to site and stored in sequence in plastic bags under shade cloth at
The ALS analytical laboratory in Coquimbo (
Samples have been analysed by certified laboratories in
- Copper, silver and molybdenum were analysed by 4-acid digestion (Hydrochloric-Nitric- Perchloric-Hydrofluoric) followed by evaluation using Inductively Coupled Plasma - Optical Emission Spectrometry ("ICP-OES") or Atomic Absorption Spectrometry ("AAS");
- Copper results > 10,000 ppm were analysed by "ore grade" method Cu-AA62 (upper limit 40% Cu);
- Samples within the oxide and transitional weathering domains (as determined by geologists' logging) were analysed for "soluble copper" (upper limit 10% Cu) to detect the leachability of copper oxide minerals within these domains; and
- Gold was analysed by 30 or 50 g lead-collection Fire Assay, followed by ICP-OES or AAS.
The verification of input data included the use of company QA/QC blanks and reference material, field and laboratory duplicates, umpire laboratory checks and independent sample and assay verification.
The Qualified Person has assessed the drillhole database validation work and QAQC undertaken by
All laboratories used are independent of
Forward Looking Statements
This report contains certain statements that are "forward-looking information" within the meaning of Canadian securities legislation and Australian securities legislation (each, a "forward-looking statement"). Forward-looking statements reflect the Company's current expectations, forecasts, and projections with respect to future events, many of which are beyond the Company's control, and are based on certain assumptions. No assurance can be given that these expectations, forecasts, or projections will prove to be correct, and such forward-looking statements included in this report should not be unduly relied upon. Forward-looking information is by its nature prospective and requires the Company to make certain assumptions and is subject to inherent risks and uncertainties. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "believe", "could", "estimate", "expect", "may", "plan", "potential", "project", "should", "will", "would" and similar expressions are intended to identify forward-looking statements.
The forward-looking statements within this report are based on information currently available and what management believes are reasonable assumptions. Forward-looking statements speak only as of the date of this report. In addition, this report may contain forward-looking statements attributed to third-party industry sources, the accuracy of which has not been verified by the Company.
In this report, forward-looking statements relate, among other things, to: prospects, projections and success of the Company and its projects; expected cash inflows; the ability of the Company to expand mineral resources beyond current mineral resource estimates; the results and impacts of current and planned drilling to convert inferred mineral resources to indicated, to extend mineral resources and to identify new deposits; the timing and results of the planned 30,000m drill program; the results of planned update to current mineral resource estimates; the Company's ability to convert mineral resources to mineral reserves; the outcome of the review of a possible large pit scenario at Cortadera, including the economics thereof and the comparison with the existing PEA scenario; the timing and results of the planned updated PEA (if completed) and the PFS; opportunities for growth in mineral projects; the ability of the Company to secure necessary infrastructure; the terms and conditions related to use of existing port and electrical infrastructure, including the ability to access renewable energy sources; the timing and outcomes of this current and future planned economic studies; the timing and outcomes of regulatory processes required to obtain permits for the development and operation of the
Forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking statements in this report, including, but not limited to, the following material factors: operational risks; risks related to the cost estimates of exploration; sovereign risks associated with the Company's operations in
Although the forward-looking statements contained in this report are based upon assumptions which the Company believes to be reasonable, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this report, the Company has made assumptions regarding: future commodity prices and demand; availability of skilled labour; timing and amount of capital expenditures; future currency exchange and interest rates; the impact of increasing competition; general conditions in economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; future tax rates; future operating costs; availability of future sources of funding; ability to obtain financing; and assumptions underlying estimates related to adjusted funds from operations. The Company has included the above summary of assumptions and risks related to forward-looking information provided in this report to provide investors with a more complete perspective on the Company's future operations, and such information may not be appropriate for other purposes. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom.
For additional information with respect to these and other factors and assumptions underlying the forward-looking statements made herein, please refer to the public disclosure record of the Company, including the Company's most recent Annual Report, which is available on SEDAR (www.sedar.com) under the Company's issuer profile. New factors emerge from time to time, and it is not possible for management to predict all those factors or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.
The forward-looking statements contained in this report are expressly qualified by the foregoing cautionary statements and are made as of the date of this report. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking statement to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. Investors should read this entire report and consult their own professional advisors to ascertain and assess the income tax and legal risks and other aspects of an investment in the Company.
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
ABN | Quarter ended ("current quarter") | |
91 130 955 725 |
Consolidated statement of cash flows | Current quarter | Year to date | |
1. | Cash flows from operating activities | - | - |
1.1 | Receipts from customers | ||
1.2 | Payments for | (2,577) | (13,816) |
(a) exploration & evaluation | |||
(b) development | - | - | |
(c) production | - | - | |
(d) staff costs | (680) | (2,089) | |
(e) administration and corporate costs | (735) | (3,390) | |
1.3 | Dividends received (see note 3) | - | - |
1.4 | Interest received | 31 | 160 |
1.5 | Interest and other costs of finance paid | - | - |
1.6 | Income taxes paid | - | - |
1.7 | Government grants and tax incentives | - | - |
1.8 | Other (provide details if material) | - | - |
1.9 | Net cash from / (used in) operating activities | (3,961) | (19,135) |
2. | Cash flows from investing activities | - | - |
2.1 | Payments to acquire or for: | ||
(a) entities | |||
(b) tenements | (286) | (1,518) | |
(c) property, plant and equipment | - | - | |
(d) exploration & evaluation | - | - | |
(e) investments | - | - | |
(f) other non-current assets | - | - | |
2.2 | Proceeds from the disposal of: | - | - |
(a) entities | |||
(b) tenements | - | - | |
(c) property, plant and equipment | - | - | |
(d) investments | - | - | |
(e) other non-current assets | - | - | |
2.3 | Cash flows from loans to other entities | - | - |
2.4 | Dividends received (see note 3) | - | - |
2.5 | Other (provide details if material) | - | - |
2.6 | Net cash from / (used in) investing activities | (286) | (1,518) |
3. | Cash flows from financing activities | - | - |
3.1 | Proceeds from issues of equity securities (excluding convertible debt securities) | ||
3.2 | Proceeds from issue of convertible debt securities | - | - |
3.3 | Proceeds from exercise of options | - | - |
3.4 | Transaction costs related to issues of equity securities or convertible debt securities | - | - |
3.5 | Proceeds from borrowings | - | - |
3.6 | Repayment of borrowings (CMP option) | - | - |
3.7 | Transaction costs related to loans and borrowings | - | - |
3.8 | Dividends paid | - | - |
3.9 | Other (provide details if material) | - | - |
3.10 | Net cash from / (used in) financing activities | - | - |
4. | Net increase / (decrease) in cash and cash equivalents for the period | ||
4.1 | Cash and cash equivalents at beginning of period | 7,389 | 23,722 |
4.2 | Net cash from / (used in) operating activities (item 1.9 above) | (3,961) | (19,135) |
4.3 | Net cash from / (used in) investing activities (item 2.6 above) | (286) | (1,518) |
4.4 | Net cash from / (used in) financing activities (item 3.10 above) | - | - |
4.5 | Effect of movement in exchange rates on cash held | 45 | 118 |
4.6 | Cash and cash equivalents at end of period | 3,187 | 3,187 |
5. | Reconciliation of cash and cash equivalents | Current quarter | Previous quarter |
5.1 | Bank balances | 2,036 | 4,740 |
5.2 | Call deposits | 1,151 | 2,649 |
5.3 | Bank overdrafts | ||
5.4 | Other (provide details) | ||
5.5 | Cash and cash equivalents at end of | 3,187 | 7,389 |
6. | Payments to related parties of the entity and their associates | Current quarter |
6.1 | Aggregate amount of payments to related parties and their associates included in item 1 | 152 |
6.2 | Aggregate amount of payments to related parties and their associates included in item 2 | - |
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments. |
7. | Financing facilities | Total facility | Amount drawn at quarter end |
7.1 | Loan facilities | - | - |
7.2 | Credit standby arrangements | - | - |
7.3 | Other (please specify) | - | - |
7.4 | Total financing facilities | - | - |
7.5 | Unused financing facilities available at quarter end | ||
7.6 | Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional | ||
8. | Estimated cash available for future operating activities | $A'000 |
8.1 | Net cash from / (used in) operating activities (item 1.9) | (3,961) |
8.2 | (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) | - |
8.3 | Total relevant outgoings (item 8.1 + item 8.2) | (3,961) |
8.4 | Cash and cash equivalents at quarter end (item 4.6) | 3,187 |
8.5 | Unused finance facilities available at quarter end (item 7.5) | - |
8.6 | Total available funding (item 8.4 + item 8.5) | 3,187 |
8.7 | Estimated quarters of funding available (item 8.6 divided by item 8.3) | 0.80 |
Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as "N/A". Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. | ||
8.8 | If item 8.7 is less than 2 quarters, please provide answers to the following questions: | |
8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not? | ||
Answer: Yes. The company has executed a | ||
8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? | ||
Answer: Completion of the Agreement and the receipt of | ||
8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? | ||
Answer: Yes. The receipt of the Royalty Consideration from Osisko will be applied to the commencement of drilling activities across multiple growth targets and the completion and delivery of the resource upgrade in H2 2023 and the PFS for Costa Fuego in H2 2024. | ||
Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered. |
Compliance statement
- This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.
- This statement gives a true and fair view of the matters disclosed.
Date: .................28 July 2023.........................................
Authorised by: ...........By the Board.....................................................
(
Notes
1. | This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so. |
2. | If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report. |
3. | Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity. |
4. | If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee – eg |
5. | If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the |
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