Costa Fuego - Huasco Water (Stage 2 - Desalinated) PFS: $977M NPV, 19% IRR
Hot Chili Limited's Costa Fuego - Huasco Water (Stage 2 - Desalinated) in Chile, Huasco Valley has a Pre-Feasibility Study (PFS) outlining an after-tax NPV of $977M, an after-tax IRR of 19%, and initial capital of $1.40B.
Hot Chili Limited's Costa Fuego - Huasco Water (Stage 2 - Desalinated) 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 $977M 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 $977M using a 8% discount rate. After-tax IRR is 19%. Initial capital expenditure is estimated at $1.40B. The study models a payback period of 4 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
The 19% after-tax IRR lands in the bottom quartile of our 289-project peer set and barely clears the practical financing hurdle for a developer of this risk profile. For a single-asset junior, lenders typically demand 20%+; this project sits just below that threshold, which raises the execution bar. The 8% discount rate is at the lower end of the standard reporting range, which flatters the $977M NPV — that figure is less conservative than it appears. The NPV-to-market-cap ratio of roughly 3.2x is a two-sided signal: it could mean the market has not priced the asset, or it could reflect skepticism on the financing path given the $1.40B initial capex, which is 143% of NPV. That capital intensity is the dominant risk — funding a project nearly 1.5x its own NPV, with a market cap one-third the size, implies substantial dilution or debt risk. The 4-year payback is moderate but offers limited cushion if ramp-up or cost overruns materialize. The single most important watch-item is financing feasibility: can this junior secure project-level debt and equity on terms that preserve current shareholder value?
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.