Huasco Water PFS: $122M NPV, 19% IRR
Hot Chili Limited's Huasco Water in Chile, Huasco Valley (Huasco region) 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 Huasco Water has reported Pre-Feasibility Study (PFS) results for the water (seawater / desalinated water infrastructure) project in Chile, Huasco Valley (Huasco region). 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.
Resources and ownership. The company holds a 80% interest in the project.
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
- IRR after-tax
- 19%
higher than 17% of 360 projects we track
- NPV after-tax
- $122M
higher than 16% of 476 projects we track
- Initial capex
- $151M
124% of NPV
costlier than 37% of 463 projects we track
- Payback
- 4.5yrs
slower than 88% of 289 projects we track
- Discount rate
- 8%
Against the 360 projects we track, this one's 19% after-tax IRR sits in the bottom quartile, ahead of only 17% of them. Its after-tax NPV of $122M ranks ahead of 16% of the 476 projects we track, and payback of 4.5 years trails all but 12% of the 289 projects we track. That is the honest starting point: nothing in the return profile stands out, and the practical question is whether it clears the bar developers actually face. A ~15% after-tax IRR is the usual threshold for project finance, and 20%+ where the developer is a higher-risk junior with little else to lean on, which fits this company. At 19%, the margin over that lower bar is thin.
The constraint that matters most is funding. Initial capex of $151M is 124% of NPV, and against a US$237M market cap the build is roughly 0.6x the company's entire equity value. That is the sharpest signal here: a micro-cap cannot quietly finance a build of that size without dilution, a partner, or a structure that reshapes the ownership. The NPV-to-market-cap ratio of about 0.5x cuts both ways. It can mean the asset is not yet reflected in the share price, or that the market is discounting financing, execution or commodity risk. With seven projects in the portfolio, this is one of several calls on management's attention and balance sheet.
Chile's Huasco Valley is a mining-friendly jurisdiction, which helps on permitting and counterparty confidence, but the study is a PFS, not a feasibility study: a plus or minus 25% estimate band, not a build decision. The 8% discount rate is a reporting convention and carries no signal. The single question is whether this company can fund a $151M build without gutting the equity case for the 19% return it is meant to deliver.
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.