Hot Chili Ltd, an Australian copper-gold exploration company headquartered in Sydney, has announced a binding $15 million investment agreement with Osisko Gold Royalties Ltd., a leading royalty-streaming company based in Canada. The agreement includes a 1.0 percent net smelter return (NSR) royalty on copper and a 3 percent NSR royalty on gold, known as the Osisko NSR, for Hot Chili's Costa Fuego Copper-Gold Project in Chile. The investment will provide Hot Chili with a cash infusion of $15 million, strengthening the company's cash position to approximately $17.2 million upon closing.
The funds will be utilized for the advancement of pre-feasibility studies, resource growth drilling programs, and general project development. The Osisko NSR holds significant value considering the investment and Hot Chili's current market capitalization of $80 million. The agreement also includes buyback rights for Hot Chili in the event of a change of control before the fourth anniversary of the closing. Hot Chili is set to commence a 30,000-meter drilling program following the closing of the investment agreement.