Costa Fuego - Huasco Water (Stage 1) PFS: $122M NPV, 19% IRR
Hot Chili Limited's Costa Fuego - Huasco Water (Stage 1) in Chile, Huasco Valley has a Pre-Feasibility Study (PFS) outlining an after-tax NPV of $122M, an after-tax IRR of 19%, and initial capital of $151M.
Hot Chili Limited's Costa Fuego - Huasco Water (Stage 1) has reported Pre-Feasibility Study (PFS) results for the water project in Chile, Huasco Valley. The study headlines an after-tax net present value of $122M at a 8% discount rate. It reflects Hot Chili Limited's (HCH.V) latest disclosed economics for the asset.
Economics. The after-tax NPV is $122M using a 8% discount rate. After-tax IRR is 19%. Initial capital expenditure is estimated at $151M. The study models a payback period of 4.5 years.
These figures are extracted from Hot Chili Limited's technical disclosures and reflect the most recent PFS on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Our Analysis
This 19% after-tax IRR lands in the bottom quartile of our tracked peer set and barely clears the practical financing hurdle for a developer. For a single-asset junior, the risk premium typically demands 20%+, so project finance here is not a given. The 8% discount rate used for NPV reporting is low, which flatters the $122M NPV figure; a more conservative rate would compress it meaningfully.
Capital intensity is the core concern. Initial capex of $151M is 124% of NPV and large relative to the company’s market cap, creating material dilution or financing risk. The 4.5-year payback adds duration risk. The NPV-to-market-cap gap (NPV below market cap) is two-sided: it may indicate the market is pricing in skepticism on funding or execution, or that the asset is simply not yet reflected. The single most important watch-item is whether the company can secure financing without severe equity dilution—without it, the study’s returns are theoretical.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.