Costa Fuego (Productora + Cortadera) PFS: $1.20B NPV, 19% IRR
Hot Chili Limited's Costa Fuego (Productora + Cortadera) in Chile, Atacama Region, Huasco Valley (Atacama Coastal belt), ~60km from port has a Pre-Feasibility Study (PFS) outlining an after-tax NPV of $1.20B, an after-tax IRR of 19%, and initial capital of $1.27B. The mine plan runs 20 years at about 116 kt CuEq (first 14 years; 95 ktpa Cu, 48 kozpa Au, 158 kozpa Ag, 2 ktpa Mo) per year.
Hot Chili Limited's Costa Fuego (Productora + Cortadera) has reported Pre-Feasibility Study (PFS) results for the copper project in Chile, Atacama Region, Huasco Valley (Atacama Coastal belt), ~60km from port. The study headlines an after-tax net present value of $1.20B 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 $1.20B using a 8% discount rate. After-tax IRR is 19%. Initial capital expenditure is estimated at $1.27B. The study models a payback period of 4.5 years. All-in sustaining costs are pegged at 1.38 USD/lb Cu (C1 cash cost, net of by-product credits). Economics are based on Long-term US$4.30/lb copper and US$2,280/oz gold (PFS); September 2026 long-term consensus US$5.03/lb Cu and US$3,570/oz Au.
Production and mine plan. The project envisions an open-pit operation. Life of mine is 20 years. Average annual production is approximately 116 kt CuEq (first 14 years; 95 ktpa Cu, 48 kozpa Au, 158 kozpa Ag, 2 ktpa Mo). The open-pit strip ratio is 1.5.
Resources and ownership. The company holds a 100% interest in the project. Royalties and streams: Glencore can purchase up to 60% of concentrate for first 8 years life of mine at benchmark terms but must maintain >7.5% ownership in Company.
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.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Proven & Probable | 502 Mt | 0.43% CuEq | — |
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Measured & Indicated | 798 Mt | 0.45% CuEq | 3.6 Mt CuEq metal |
| Inferred | 203 Mt | 0.31% CuEq | — |
Our Analysis
- IRR after-tax
- 19%
higher than 41% of 27 projects we track
- NPV after-tax
- $1.20B
higher than 69% of 36 projects we track
- Initial capex
- $1.27B
106% of NPV
costlier than 57% of 40 projects we track
- Payback
- 4.5yrs
slower than 77% of 26 projects we track
- Mine life
- 20yrs
- Discount rate
- 8%
- Study price assumption
- Long-term US$4.30/lb copper and US$2,280/oz gold (PFS); September 2026 long-term consensus US$5.03/lb Cu and US$3,570/oz Au
- Spot copper today
- $6.75/lb
The number that decides this project is not in the returns table. It is the $1.27B initial capex against a US$237M market capitalisation: the build costs roughly 5.4 times what the entire company is worth. No micro-cap writes that cheque from its own balance sheet. The realistic paths are a partner or offtaker carrying a large share, a joint-venture sale of the asset, heavy equity issuance, or project debt that will demand contracts and a completed feasibility before it moves. Each route costs existing holders something, whether in dilution, in economics handed to a partner, or in years of delay. That is the filter through which everything else should be read.
The economics themselves are decent rather than exceptional. After-tax NPV of $1.20B ranks above 69% of the 36 copper projects we track, and the 19% after-tax IRR ranks above only 41% of the 27 in our copper set, with a 4.5-year payback longer than 77% of the 26 we track. Against the roughly 15% developers typically need for project finance, 19% clears the bar, but only just, and a junior with little else in the portfolio would normally want 20%-plus. The 8% discount rate is a reporting convention, not a hurdle, and says nothing useful here. Capex at 106% of NPV is the capital-intensity signature of a project that has to be financed almost entirely up front.
Chile's Atacama region and a site 60km from port are genuine advantages, and the PFS narrows estimates to roughly a plus or minus 25% band, though it is not yet a build decision. The study assumes US$4.30/lb copper against a live spot of $6.75/lb, so the returns carry real upside if spot holds, and the September 2026 consensus of US$5.03/lb sits between the two. The question that settles this: can a US$237M company fund a $1.27B build without surrendering the asset's best years to whoever funds it?
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.