HCH - Hot Chili

[frugal.rock]

Today's bar saying "have a look at me, I'm a signal".

 

[frugal.rock]

Explainer-Is Chile about to tear up its Pinochet-era constitution? By Reuters

Explainer-Is Chile about to tear up its Pinochet-era constitution?

au.investing.com

 

[Sean K]

Explainer-Is Chile about to tear up its Pinochet-era constitution? By Reuters

Explainer-Is Chile about to tear up its Pinochet-era constitution?

au.investing.com

I think the constitutional amendments are bad for prospective copper plays in Chile. But, it's unlikely to get up because the people realise how important the investment is from big mining to the country's welfare. They will be shooting themselves in the foot to stop copper and lithium mining.

Having said that, Victoria has stopped gas development for the last decade and lost billions, so it's not a developing World issue.

The highest political risk in developing major mining projects in the World may well be on Indigenous land in Australia, the US or Canada. One of the most significant copper resources in the World has been sitting 2km under the desert in Arizona for a decade and even BHP and RIO can't make it happen.

The current far-Left leaning politics of Eastern Sth America create great uncertainty, so it's scaring investors, that's for sure. At worst, it could mean nationalisation, but, I think Sth Americans want to get out of poverty, which means open markets. I think they get that.

Finally, HCH may not even be affected because the proposed tax increases are only for Cu kilograms over 50,000pa. HCH might only produce 49K Cu pa in the PFS.

 

[Sean K]

This is going to be a relief for many Chile investors. Probably expected by many, but was a cloud on future investment.

 

[Sean K]

Not sure why 3g/t Ag is considered 'strong', it would add almost nothing to the CuEq in these intersections.

5 holes at Santiago Z complete and awaiting assays. They musn't be too exciting visually as they may have announced that. Fingers crossed there's something down there.

 

[peter2]

Hola, senor @Sean K , there's a high volume break-out at HCH.

 

[Sean K]

Hola, senor @Sean K , there's a high volume break-out at HCH.

View attachment 146703

Something seems to have changed recently. Risky juniors oversold maybe. It went up quite a bit in Canada on Friday too. For no real reason that I can see. Has a strong track record of bouncing and then crumbling in the past year. Might make it to $1.20 on the chart.

I’m holding until Glencore take over. Although, I’m still very interested in the regional potential. Seems to be a bunch of nested porphyrys within 20km. Could end up being a significant mining district around a central hub. I doubt they will get to mine it without Glencore though.

 

[Sean K]

Something definitely up @peter2 Not sure what other than those high grade results and realisation there's a very nice high grade starter pit near to the major lower grade deposits. Perhaps the Chile referendum results also. This has doubled since Jul which has been a very nice change in trajectory. For now. I'm not counting chickens just yet.

 

[Sean K]

Well, it's taken a couple of months to get those Santiago Z results back and they produced 'interesting silver assays'.... pffft. That's not what I wanted. I wanted a material Cu/Au discovery. Disappointing. It's going to be some time before they test that again.

 

[greggles]

They have around $15 million in cash. I hope they use it wisely. Management is the key for HCH going forward. If the head honchos don't perform, I have a bad feeling about where this company might end up. For the sake of shareholders I am hoping for the best.

 

[Sean K]

This looks like a good headline but it means that their timeline for everything gets pushed to the right so they can do the necessary drilling in order to complete an MRE (if they find anything) in this new deposit. Hysterical drilling hit some dirt with similar grades to the other deposits so it's highly likely to add tonnage to the overall MRE and push it over the 1Bt mark. Should also push their production targets up and out turning it into a Tier 1 asset. Could even be a higher production profile than what OZ had in SA. I hate delays but apparently they've been trying to get this tenament for years. Might of gone down this path because what they had might not have been enough scale to temp a larger player taking the reins.

 

[Sean K]

Geesh, these guys are going back into explorer mode. Must not have been confident in what they had was of sufficient scale to warrant the capex. Possibly poor timing with Chile politics to get large financial commitments anyway.

The Cuerpo 4 Porphyry target definitely has Cu/Au in it, it's just a matter of size.

The new Target 4, along strike from the current resource is more speculative from what I can see. Obviously runs in a line from the other deposits, but doesn't seemed to have been drilled at all.

They are going to need to add drill rigs to properly drill all these new targets. Another CR on the cards shortly I think. Unfortunately at a crappy price probably.

 

[Sean K]

Holding my nerve with this puppy and averaged down a little bit at these levels. $100m MC with 3.4Mt Cu ($8K ish = $27b ) and 3Moz Au ($1.8K ish = $5.4b) = $32.4b ish in-situ resource and growing. Going to be a huge capex that only a major will be able to take forward. Hopefully the new tenements have enough extra tonnage to take it over some magical threshold for Glencore to stay on board, or even take over or JV with someone who know development and mining in Chile. I'm convinced of the copper narrative and with very few new major discoveries I think this will eventually get off the ground. I feel like Michael Burry waiting for the housing market to collapse for 2 years.

 

[Sean K]

The new ish Chairwomen doing media instead of Christian Easterly. Interesting, he's pretty much been the face of the company forever.

Short term catalyst will be drilling results into the new tenements. Hopefully they might be able to add a few million tonnes to the MRE.

Going to be a long slow burn with this I think until the recession is over and the World generally settles down a bit after a disastrous 2022. Maybe 2024 is the year for HCH.

 

[The Triangle]

The new ish Chairwomen doing media instead of Christian Easterly. Interesting, he's pretty much been the face of the company forever.

Short term catalyst will be drilling results into the new tenements. Hopefully they might be able to add a few million tonnes to the MRE.

Going to be a long slow burn with this I think until the recession is over and the World generally settles down a bit after a disastrous 2022. Maybe 2024 is the year for HCH.

2024 is a long way away. They've raised something around $230 million in the last decade have/had 2 quarters left ($14m?) of funding and I don't think they are in any better position today than they were 5,6,7,8 year ago. Shareholders certainly aren't better off. That's the problem with these very large deposits, only the big boys can afford to sit on them for a long time. HCH will need more funding probably before anything interesting happens with the SP. The managed to leverage a Canadian listing to get some interest, but that's now faded. Is this where we'll see glencore flex their muscles and be creative with convertible bonds, share placement, etc. so they can take control without paying a premium?

My biggest gripe with HCH is that they've never appeared to have proper 'operational' people at the helm of the company. Lots of financial/corporate/consultant/geo types, but I've never seen any evidence of actual 'get it done' type people. It's a problem with so many of these juniors - they don't know if they want to develop a project or spruke it and sell. Is this "New Canadian Director" there to make things happen? Or just make the collective board resume look better?

I would love to be a fly on the wall in a boardroom meeting, what do they discuss? Some of the press releases they come up with are downright pathetic and irrelevant. Most releases these days are filled with buzz sentences and without substance. As mentioned above its hard to tell what HCH is trying to do, build a mega mine? get a small mine/starter going then worry about expanding later? sell out? build the resource and hope? They've been at it for a long time.

 

[Sean K]

2024 is a long way away. They've raised something around $230 million in the last decade have/had 2 quarters left ($14m?) of funding and I don't think they are in any better position today than they were 5,6,7,8 year ago. Shareholders certainly aren't better off. That's the problem with these very large deposits, only the big boys can afford to sit on them for a long time. HCH will need more funding probably before anything interesting happens with the SP. The managed to leverage a Canadian listing to get some interest, but that's now faded. Is this where we'll see glencore flex their muscles and be creative with convertible bonds, share placement, etc. so they can take control without paying a premium?

My biggest gripe with HCH is that they've never appeared to have proper 'operational' people at the helm of the company. Lots of financial/corporate/consultant/geo types, but I've never seen any evidence of actual 'get it done' type people. It's a problem with so many of these juniors - they don't know if they want to develop a project or spruke it and sell. Is this "New Canadian Director" there to make things happen? Or just make the collective board resume look better?

I would love to be a fly on the wall in a boardroom meeting, what do they discuss? Some of the press releases they come up with are downright pathetic and irrelevant. Most releases these days are filled with buzz sentences and without substance. As mentioned above its hard to tell what HCH is trying to do, build a mega mine? get a small mine/starter going then worry about expanding later? sell out? build the resource and hope? They've been at it for a long time.

I think they'll sell it. They just need to increase the tonnage a bit and prove it's a 130-150Kt Cu and 70-80Koz Au pa operation. It'll have a $1b + capex so I think they're putting off the Scoping Study and delaying PFS in the hope that the price of copper goes up and bit and inflation subsides. They might be better off putting off all studies till H2 2023. Maybe they will. They've been a little unlucky with timing I think. Inflation, interest rates, copper price, Chile Socialistas, war, all while they were intending to start raising $$ for development. It's been a complete turkey since listing in Canada.

 

[Sean K]

It hasn't taken too long for them to start drilling on their new land which is good. I assume they'll drill into the area where historical drilling pulled up some copper and gold similar to the other cuerpos.

PEA this half but the PFS pushed back to H1 24. Going to be a long slog here. Hopefully they time development with copper going nuts and Chile politics supportive.

 

[frugal.rock]

The new ish Chairwomen doing media instead of Christian Easterly. Interesting, he's pretty much been the face of the company forever.

What's her name reckons copper will get to $8 in the next 3 years. ?

 

[Sean K]

What's her name reckons copper will get to $8 in the next 3 years. ?

I haven't seen any price forecasts but there's plenty of supply demand graphs floating about. Hard to tell what the likely deficit will mean in terms of price. I'd like to think closer to $10 by 2030.

Surely companies sitting on a few million tonnes of the stuff will turn into a mine? Eventually.

Copper boom likely to last for decades, prompting a global hunt for new supply

Kitco News' contributed commentary features articles and opinions from some of the top experts in the gold industry.

www.kitco.com

 

[aus_trader]

Picking HCH for February competition. I think these small Cu plays may get some attention in the short term...

Copper is going up. OZL is has a proposal to have its shares acquired by BHP. SFR is going straight up.