Positioning for Near-Term, Meaningful, Copper Production

Hot Chili Limited (ASX: HCH) (TSX-V: HCH) (OTCQX: HHLKF) is pleased to announce that it has closed its previously announced private placement to institutional, professional, and other investors consisting of the issue of 24,900,000 new fully paid ordinary shares at an offer price of A$1.00 (C$0.89) per Share for aggregate gross proceeds of approximately A$24.9 million (or approximately C$22.2 million).

Veritas Securities Limited and Cormark Securities Inc. acted as joint lead managers  and BMO Capital Markets and Beacon Securities Limited acted as co-managers to the Placement.

Proceeds from the Placement and the SPP Offer (each as further described below), in addition to existing treasury, will provide up to 18 months funding to be used for the completion of the Costa Fuego Pre-Feasibility Study, completion of the Water Supply Business Case Study, completion of the Costa Fuego Environmental Impact Assessment, ongoing exploration, drilling and consolidation activities, and for general working capital purposes.

Details of the Placement

The Placement was completed under an offer to investors who qualify as professional or sophisticated investors under section 708(8), (10) and (11) of the Corporations Act 2001 (Cth) for aggregate gross proceeds of A$17,150,000 from the sale of 17,150,000 Shares, and by way of private placement in reliance on the “listed issuer financing exemption” from the prospectus requirements available under Part 5A of National Instrument 45-106 – Prospectus Exemptions in each of the provinces and territories of Canada, other than Quebec, and other permitted jurisdictions, for aggregate gross proceeds of C$6,897,500 (A$7,750,000) or 7,750,000 Shares.

The Shares under the LIFE Offering were also sold in the United States pursuant to exemptions from the prospectus registration requirements of the United States Securities Act of 1933, as amended, (“1933 Act”), and applicable U.S. state securities laws, and in those other jurisdictions outside of Australia, Canada and the United States provided that no prospectus filing or comparable obligation, ongoing reporting requirement or requisite regulatory or governmental approval arises in such other jurisdictions.

The Shares issued under the Placement are not subject to a hold period pursuant to applicable Canadian securities laws. The Placement remains subject to the final acceptance of the TSXV.

The Company paid to the Agents a cash commission equal to 6.0% of the gross proceeds of the Placement and, subject to the approval of Hot Chili shareholders in accordance with ASX Listing Rule 7.1, will issue to the Agents such number of non-transferable and unlisted options in the Company  as is equal to 6.0% of the number of Shares issued under the Placement. Upon issuance, each Broker Option will be exercisable to acquire one Share at a price of A$1.50 per Share on or before the date that is 24 months following the date of issue of the Broker Options.

A total of 12,955,480 new Shares were issued within the Company’s 15% placement capacity under Australian Securities Exchange  Ltd. Copper, Chile, South America

listing rule 7.1 and a total of 11,944,520 new Shares were issued within the Company’s additional 10% placement capacity under ASX listing rule 7.1A.

An Appendix 2A with details of the issue of new Shares accompanies this notice.

The Company gives the following cleansing notice under sections 708A(5)(e) and 708A(6) of the Corporations Act 2001 (Cth) (“Corporations Act”) that:

Share Purchase Plan Offer

Full details of the previously announced SPP will be set out in an offer document for the SPP (SPP Offer Document) which is expected to be released to the ASX and dispatched to Eligible Shareholders on Friday, 10 May 2024.

The SPP has now been fully underwritten by Veritas Securities Limited. Any SPP shortfall shares issued under this underwriting will be issued using the Company’s available placement capacity pursuant to ASX listing rule 7.1. Details of the underwriting agreement entered into between the Company and the Underwriter will be set out in the SPP Offer Document.

The SPP Offer period will open on Friday, 10 May 2024 and is expected to close at 5pm WST on Friday, 24 May 2024.

US Securities Laws

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States. The securities have not been and will not be registered under the 1933 Act or any state securities laws, and may not be offered or sold within the United States unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available