Gold $ 1741.00 4.40

Silver $ 26.88 0.13

Palladium $ 2393.10 62.10

Platinium $ 1214.30 15.90

Copper Wire, Proven and Probable

VAT Refund Approval from Chilean Tax Authority

Hot Chili (ASX: HCH) is pleased to announce that it has been granted a VAT refund exporting benefit (VAT Refund Payment) from the Chilean Ministry of Economy, Development, and Tourism) for all expenditure associated with its 100% subsidiary Frontera SpA.

Frontera SpA controls the Cortadera copper-gold discovery, the centrepiece of Hot Chili’s Costa Fuego combined copper development, located along the Chilean coastal range 600km north of Santiago.

The VAT Refund Payment significantly strengthens the Company’s cash  position in 2021 with an estimated refund of up to A$4 million expected to be paid to Hot Chili.

An initial VAT Refund Payment of A$1.8 to A$2 million (for previously accumulated VAT) is expected to be received in the coming months and further VAT Refund Payments will be received against all forthcoming
expenditure which attracts the 19% tax rate (drilling and assay costs etc).

The VAT Refund Payment relates to the future exporting capacity of Hot Chili’s Cortadera copper-gold project where Hot Chili is now able to claim VAT refund payments for ongoing expenditure up to US$258 million over
the course of its development activities.

Under the terms of the Vat Refund Payment, the Company has until the 1st January 2025 to commercialise production from Cortadera and meet certain export targets. Hot Chili also has the right to extend this term. In
the event that the term is not extended and Hot Chili does not meet certain export targets, Hot Chili will be required to re-pay the VAT Refund Payments to the Chilean Treasury subject to certain terms and conditions.
However, if Hot Chili achieves the export targets from Cortadera within that timeframe or its renewal, if required, any VAT Refund Payments will not be required to be re-paid.

Hot Chili had previously been granted a VAT Refund Payment for its Productora copper project in July 2014, which is active and also remains in-place until 1st January 2025.

This second VAT Refund Payment recognises the Company’s combined development approach for Costa Fuego and reinforces Chile’s proactive stance towards providing a stable and attractive destination for foreign
investment.

Further updates on multiple work streams across Costa Fuego are expected shortly.

This announcement is authorised by the Board of Directors for release to ASX.

For more information please contact:

Christian Easterday Tel: +61 8 9315 9009

Managing Director Email: christian@hotchili.net.au

or visit Hot Chili’s website at www.hotchili.net.au

Figure 1 Location of Cortadera and Productora in relation to the coastal range infrastructure of Hot Chili’s combined Costa Fuego copper project, located 600km north of Santiago in Chile.

Refer to ASX Announcement “Costa Fuego Becomes a Leading Global Copper Project” (12th October 2020) for JORC Table 1 information related to the Cortadera JORC compliant Mineral Resource estimate by Wood and the Productora re-stated JORC compliant Mineral Resource estimate by AMC ConsultantsCopper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price
1% per tonne × Cu_recovery)+(Mo ppm × Mo price per g/t × Mo_recovery)+(Au ppm × Au price per g/t × Au_recovery)+ (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,550 USD/oz, Mo=12 USD/lb, and Ag=18 USD/oz. For Cortadera (Inferred + Indicated), the average Metallurgical
Recoveries were: Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=51%, Mo=67% and Ag=23%.
** Reported on a 100% Basis – combining Cortadera and Productora Mineral Resources using a +0.25% CuEq reporting cut-off grade

Qualifying Statements

Independent JORC Code Costa Fuego Combined Mineral Resource (Reported 12th October 2020)

Reported at or above 0.25% CuEq*. Figures in the above table are rounded, reported to appropriate significant figures, and reported in accordance with the JORC Code – Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Metal rounded to nearest thousand, or if less, to the nearest hundred. * * Copper Equivalent (CuEq) reported for the resource were calculated using the following formula:: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery)+(Mo ppm × Mo price per g/t × Mo_recovery)+(Au ppm × Au price per g/t × Au_recovery)+ (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1 % per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,550 USD/oz, Mo=12 USD/lb, and Ag=18 USD/oz. For Cortadera (Inferred + Indicated), the
average Metallurgical Recoveries were: Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=51%, Mo=67% and Ag=23%.
** Note: Silver (Ag) is only present within the Cortadera Mineral Resource estimate

Competent Person’s Statement- Exploration Results

Exploration information in this Announcement is based upon work compiled by Mr Christian Easterday, the Managing Director and a fulltime employee of Hot Chili Limited whom is a Member of the Australasian Institute of Geoscientists (AIG). Mr Easterday has sufficient
experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a ‘Competent Person’ as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’ (JORC Code). Mr Easterday consents to the inclusion in the report of the matters based on
their information in the form and context in which it appears.

Competent Person’s Statement- Productora Mineral Resources

The information in this Announcement that relates to the Productora Project Mineral Resources, is based on information compiled by
Mr N Ingvar Kirchner. Mr Kirchner is employed by AMC Consultants (AMC). AMC has been engaged on a fee for service basis to provide
independent technical advice and final audit for the Productora Project Mineral Resource estimates. Mr Kirchner is a Fellow of the
Australasian Institute of Mining and Metallurgy (AusIMM) and is a Member of the Australian Institute of Geoscientists (AIG). Mr Kirchner
has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’ (the JORC Code 2012). Mr Kirchner consents to the inclusion in this report of the matters based on
the source information in the form and context in which it appears.
ears.

Competent Person’s Statement- Cortadera and Costa Fuego Mineral Resources

The information in this report that relates to Mineral Resources for the Cortadera and combined Costa Fuego Project is based on
information compiled by Elizabeth Haren, a Competent Person who is a Member and Chartered Professional of the Australasian Institute
of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Elizabeth Haren is employed as an associate Principal
Geologist of Wood, who was engaged by Hot Chili Limited. Elizabeth Haren has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined
in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Elizabeth Haren
consents to the inclusion in the report of the matters based on her information in the form and context in which it appears.

Reporting of Copper Equivalent

Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne  ×  Cu_recovery)+(Mo ppm × Mo price per g/t × Mo_recovery)+(Au ppm × Au price per g/t × Au_recovery)+ (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1 % per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,550 USD/oz, Mo=12 USD/lb, and Ag=18 USD/oz. For Cortadera (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=51%, Mo=67% and Ag=23%.

Forward Looking Statements

This Announcement is provided on the basis that neither the Company nor its representatives make any warranty (express or implied) as to the accuracy, reliability, relevance or completeness of the material contained in the Announcement and nothing contained in the Announcement is, or may be relied upon as a promise, representation or warranty, whether as to the past or the future. The Company hereby excludes all warranties that can be excluded by law. The Announcement contains material which is predictive in nature and may be affected by inaccurate assumptions or by known and unknown risks and uncertainties and may differ materially from results ultimately achieved.

The Announcement contains “forward-looking statements”. All statements other than those of historical facts included in the Announcement are forward-looking statements including estimates of Mineral Resources. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, copper, gold and other metals price volatility, currency fluctuations, increased production costs and variances in ore grade recovery rates from those assumed in mining
plans, as well as political and operational risks and governmental regulation and judicial outcomes. The Company does not undertake
any obligation to release publicly any revisions to any “forward-looking statement” to reflect events or circumstances after the date of the Announcement, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. All persons should consider seeking appropriate professional advice in reviewing the Announcement and all other information with respect to the Company and evaluating the business, financial performance and operations of the Company. Neither the provision of the Announcement nor any information contained in the Announcement or subsequently communicated to any person in connection with the Announcement is, or should be taken as, constituting the giving of investment advice to any person.

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