HCH - Hot Chili

[finicky]

I'm very cautious on this puppy due to Chile

Wouldn't touch it because of this. Daily chart might be ok by short term traders but the new guy is a loathsome leftie from student politician days. 40 hour week, lift minimum wage (fair enough) but everything else sounds like a male Alex Ocasio-Cortez. He done nothing but left wing politics all his life and is allied with the communists. Has a strong mandate and I believe he has foreshadowed higher taxes on the wealthy and on miners.

Check out the serious Che Guevara look from 2014 - a total avoid

 

[Sean K]

Wouldn't touch it because of this. Daily chart might be ok by short term traders but the new guy is a loathsome leftie from student politician days. 40 hour week, lift minimum wage (fair enough) but everything else sounds like a male Alex Ocasio-Cortez. He done nothing but left wing politics all his life and is allied with the communists. Has a strong mandate and I believe he has foreshadowed higher taxes on the wealthy and on miners.

Check out the serious Che Guevara look from 2014 - a total avoid

View attachment 135778

Yep, that's why HCH has been in the toilet. He could be a Greens politician.

If they change the tax laws as initially proposed a lot of small miners may have to shut, depending on the price of copper.

But, there's other reports that it's not a biggie.

Chile's mining industry unfazed by leftist Gabriel Boric's victory

Miners have taken Chile's apparent shift to the left in stride, citing the outsized role of mining in Chile's economy and checks in presidential power as reasons for calm.

www.spglobal.com

 

[finicky]

Good content in that S&P Global article.

 

[Sean K]

Good to see HCH pushing forward with development plans and not just drilling holes in the ground. They must be confident that they'll get to actually building a mine. This is likely to be under Glencore's stewardship of some type. I'm expecting they will be heavily involved in future capital raises to turn this into a mine if they end up thinking the project is of sufficient scale.

Had a little bounce recently of what looked like a bottom, broke resistance and has now tested that as support and held. HCH-CA off a percent overnight so might be testing that again, although the stock doesn't exactly correlate on the TXV.

 

[Sean K]

HCH in the toilet on it's MC. Not sure how much of that is Chile politics, or what.

I'm trying to do a guestimate of the updated MRE due this quarter, based on todays announcement, which I think will be the limit of drilling included in the update. This update is on Cortadera and doesn't include Productura, which seems to have been closed off at 270Mt @ .5% CuEq for 1.3Mt Cu, .8Moz Au and 36Kt Mo.

Cortadera initial MRE in 2020 was about 450Mt @.5% CuEq.

The overall mineralised area at Cortadera is now about 2300x800x1000m depth, linking all three Cuerpos. They use a .05% copper model for the overall footprint, so it's just an overall indication of size, not sure if the low grade stuff ever gets mined.

Within that there's three defined higher grade areas with a cut off of about .3% CuEq that will be mined: C1,2,3. Not sure if they will go lower in grade for the MRE, perhaps a .25% cut off as they've used for the previous MRE. I'll just use what looks to be around the .3% mark.

C1 is approx 350x200x200 x2.5* = 35,000,000Mt
C2 is approx 300x250x600 x 2.5 = 112,500,000Mt
C3 is approx 600x400x1000 x 2.5 = 600,000,000Mt

Total = 747,500,000 Mt @ around .3%

C3 has a high grade core identified in the cartoons as .4 and .6% which was already measured at 100Mt@.74% CuEq but has expanded significantly. By their recent cartoon it now looks to be approximately 400x400x400x2.5= 160Mt.

So, total resource of Cortadera and Productura could be about 1Bt@.5% with a high grade core around 160Mt@.7%.

I think around 1Bt is factored into the SP, unless nobody knows how to work out square meters of rock and approximate tonnage. So, hopefully it surprises to the upside. Considerably.

*Specific Gravity may be a little higher, perhaps 2.7.

 

[Sean K]

New presentation out for RIU Explorers Conference.

They've dangled Santiago Z to us again which was first done about a year ago and they still haven't put a hole into it.

No mention of Chile politics or pictures of Presidente Che Guevara, which I think is that major reason it's in the dog house. If this deposit was in the Lachlan Ford Belt in NSW it would be rated slightly higher I reckon.

 

[Sean K]

New Chairman parachuted in by some of the new key shareholders, IMO, and to get rid of the dead wood Murray Black, the guy who owns their drills. New Chair has an excellent CV and I think this could be something the market needs to see for a change in direction.

Dr Nicole Adshead-Bell is a geologist with a deep understanding of the mining industry from over 25 years bridging the gap between the technical, corporate (executive and non-executive director), institutional investor and investment banking segments of the business - within an ESG framework.

Nicole resides in Canada and is currently a non-executive director of Altius Minerals Corp. (TSX) and Matador Mining Ltd (ASX). Her career includes Managing Director and CEO of ASX-listed Brazilian gold producer Beadell Resources Ltd (prior to its acquisition by TSX/NYSE American listed Great Panther Mining Ltd); Director of Mining Research at Sun Valley Gold LLC (SEC registered precious metals focused fund); Managing Director, Investment Banking, Haywood Securities Inc. (Canadian independent investment dealer) and Mining Analyst covering copper, zinc and uranium commodities and companies at Dundee Securities Corp. (former Canadian independent investment dealer). While at Haywood she was involved in approximately 20 public transactions including streaming, mergers, acquisitions and divestures and raising approximately C$1.8Bn in equity/convertible debenture financings. More recently she established Cupel Advisory Corp. to focus on investments and advisory services in the mining sector.

Over the past 10 years Nicole has held directorships with several public companies including First Majestic Silver Corp. (TSX/NYSE), Pretium Resources Inc. (TSX/NYSE) and Dalradian Resources Inc. (TSXV, acquired by Orion Mine Finance in 2018).

Dr Adshead-Bell has PhD in structural/economic geology from James Cook University, Townsville, Australia where she also completed her geology undergraduate and honours degrees.

 

[Sean K]

If this was a lithium or nickel off-take agreement, it would give it a rocket, but it's copper in Chile, which is on the nose thanks to the Communistas. Read a few days ago that Honduras are going to stop open pit mining due to the new Lefty government up there too. Latin American Communists are bad for business. Concerning.

 

[Sean K]

Delivered the resource upgrade on time, which is nice. Almost made it to the 1Bt mark, which is nice but the high grade area is probably more important. 160Mt is very nice. Stock is in the toilet, I think mainly to Chile politics, so not sure if anything will turn it around.

I wasn't too far off with my guestimate, so it hasn't surprised.

 

[The Triangle]

Delivered the resource upgrade on time, which is nice. Almost made it to the 1Bt mark, which is nice but the high grade area is probably more important. 160Mt is very nice. Stock is in the toilet, I think mainly to Chile politics, so not sure if anything will turn it around.

I wasn't too far off with my guestimate, so it hasn't surprised.

View attachment 139727

I still think the grade needs a boost... But amazing that hch trades at about the same market cap as cvv which has half the grade and half the tonnes of hch.

 

[Sean K]

I still think the grade needs a boost... But amazing that hch trades at about the same market cap as cvv which has half the grade and half the tonnes of hch.

This company is suffering from Chile politics. They just need to convince the Communistas that it’s in their best interest to dig up the wanted minerals. Having lived in South America for three years, I have zero confidence in HCH turning this into a mine. But, I’m gambling others might think so.

 

[frugal.rock]

But, I’m gambling others might think so.

Couldn't ever bring myself to buy HCH.
There's something about it that makes me say "que pasa ?"
It's no Lapis Lazuli for me...

Long term chart just ugly, with a recent consolidation.

Looking at a shorter term chart, a gamble on a bottom being in might be in order.
I like a little less sovereign risk. My first girlfriend was born in Chile, that didn't work out well either...

 

[Sean K]

Couldn't ever bring myself to buy HCH.
There's something about it that makes me say "que pasa ?"
It's no Lapis Lazuli for me...

Long term chart just ugly, with a recent consolidation.

View attachment 139898

Looking at a shorter term chart, a gamble on a bottom being in might be in order.
I like a little less sovereign risk. My first girlfriend was born in Chile, that didn't work out well either...

View attachment 139899

It's ugly isn't it. It's tanked since the share consolidation and listing in Canada and anything to do with trying to gain investor interest in Nth America. Things that were designed to raise the sp. Instead it's gone into a death spiral. The MRE upgrade came in around what I had guessed with my back of the envelope calcs so no upside there. The political situation in Chile has only got worse with no clarity on future tax regimes for copper and lithium and protests going on elsewhere about mining on indigenous lands. That uncertainty is killing it.

Just about the only thing going for it is that it has Glencore on the books with investment, Director and off-take agreements and that copper is running out with hardly any new major mines coming on board.

I think they need another discovery close to their two deposits with another 500Kt at least to give it more scale, or higher grade to tip it over the edge for value. Or, maybe it'll take another election with a conservative President and majority in the two houses come in. The next elections are years away.

 

[Sean K]

It's been hard work holding this puppy over the past 6 months. I have a glimmer of hope that it might have found a floor on the back of the resource upgrade. Unusual volume a couple of days ago, didn't notice that until today.

This is a very impressive hole. Just for geophysics, but impressive anyway, especially the high grade bit.

 

[Sean K]

Good infill/development drilling results. High grade core expanding which is very good news.

Better news to me is they are putting holes in the satellite deposits to include them in the next MRE and have actually started clearing a pad at Santiago Z. They dangled Santiago in front of our noses about 12 months ago and have failed to put a hole in it. Fingers crossed this is another Cortadera to add some scale to the overall project.

 

[Sean K]

Well, hopefully these interesting intersections actually have copper in them and not just nice colours.

They need another significant discovery near their other deposits to get back up off the floor I feel.

Chilean politics still casting a shadow I also think.

 

[Sean K]

Seems the above intersection did have some copper in it. (edit: it's not the same hole)

If BHP don't get OZL, they should have a look here. But, they may be a bit scared of Chile with other ongoing issues they have in the country. Probably not big enough yet also.

They're finally putting a hole in Santiago Z, which looks prospective. Hopefully another several hundred million ton deposit awaits.

 

[Sean K]

This might have moved more due to the OZL-BHP news than the drilling results, but first signs it might have found a bottom. While Glencore is still on board I think they might have a chance to turn this into a mine one day in the future. Maybe by 2040 or something.

 

[Sean K]

Might get a please explain here. Although, wouldn't be surprised if some long suffering holders took some off the table.

 

[Sean K]

They've finally got the VALMET0002 hole out and overall it's around as expected with the RC twin hole VAP0009 mentioned above. These two holes extends Valentina 120m but I'm not sure how much extra tonnage this is going to add to the MRE update in Q1 23.

The good thing about this satellite is that it's high grade compared to the main deposit and from surface so will certainly value add.

A real catalyst to turn around this puppy will be another discovery. Fingers crossed Santiago Z is the next one.