Mr. Christian Easterday reports

HOT CHILI ARRANGES A$40 MILLION FUNDING TO ACCELERATE LA VERDE INTO EXPANDED FEASIBILITY FOR THE COSTA FUEGO CU-AU PROJECT, COASTAL CHILE

Hot Chili Ltd. has successfully arranged a $40-million (Australian) private placement to institutional and professional investors through the issue of 24,242,425 new fully paid ordinary shares at an offer price of $1.65 (Australian) ($1.56) per share.

Environmental impact assessment being prepared for submission in 2026 for approval to develop a new annual production hub of 100,000 tonnes copper and 50,000 ounces gold.

Highlights

• The $40-million (Australian) private placement received strong demand from Australian, Canadian and overseas institutional investors, as well as the company's three largest shareholders (Glencore, Blue Spec and GS Group).
• Upon completion of the capital raise, the company will be well financed in 2026 to deliver strong growth and development milestones for the Costa Fuego copper-gold (Cu-Au) project, located in the coastal range of Chile:
  • Accelerated drilling at the La Verde Cu-Au discovery to deliver an increase in the company's mineral resource base, with a focus on delineating a potential higher-grade starter pit for Costa Fuego;
  • Commencement of Costa Fuego's feasibility study and integration of La Verde into an expanded open pit mine schedule;
  • Submission of an environmental impact assessment (EIA) for Costa Fuego in late 2026 and advancement of Huasco Water;
  • Maintaining funding flexibility to further engage with several prospective strategic partners engaged in continuing asset-level strategic partnering processes being led by BMO Capital Markets.
• Further drilling, corporate and development updates expected as the company accelerates its growth and development plan with strengthened treasury and a rising copper and gold price environment.

Veritas Securities Ltd., ATB Cormark Capital Markets and Desjardins Capital Markets acted as joint lead managers (JLMs) and BMO Capital Markets, as a co-manager, to the placement. The placement was oversubscribed and received strong demand from Australian, Canadian and overseas institutional investors as well as existing substantial shareholders.

The placement ensures that Costa Fuego remains among the few globally significant copper projects not controlled by major mining companies, with the potential to contribute substantially to new copper supply this decade.

Hot Chili's managing director, Christian Easterday, said:

"We are delighted by the overwhelming support received from new and existing institutional investors, as well as our top-three major shareholders, in the placement. The strong participation from these groups highlights the confidence in our strategy to continue driving Hot Chili's rerate into a rising copper market.

"Their commitment underpins the company's ability to advance key milestones and strengthens our position as we continue to develop one of the world's few remaining significant copper projects not controlled by a major mining company, that could deliver meaningful new copper supply this decade.

"These funds place us in a strong position to commence the Costa Fuego feasibility study and to aggressively accelerate the La Verde Cu-Au discovery drill-out, targeting a potential higher-grade starter pit for Costa Fuego capable of significantly reducing capital payback time frames and enhancing financial metrics.

"Market conditions are indicative of a supply-driven, rising copper price cycle and the company is well funded to take advantage of controlling the right assets, at the right scale, with a new major discovery, at the right time."

Purpose and use of funds

The company continues to receive increasing interest from prospective strategic partners regarding its advanced Costa Fuego development and associated Huasco Water supply project. This increased attention, coupled with a favourable copper price environment, reinforces management's confidence in accelerating the company's growth and development strategy.

proceeds from the placement and existing cash on hand will be used to finance:

• Extensional and resource definition drilling at the expanding La Verde Cu-Au discovery to establish a maiden mineral resource and further define the size, scale and grade of a potential higher-grade starter pit for Costa Fuego;
• Exploration drilling of highly prospective look-alike porphyry targets adjacent to La Verde;
• Completion and submission of an EIA for Costa Fuego;
• Continuing evaluation of asset-level strategic funding options for the development of the Costa Fuego and Huasco Water projects; several non-binding, indicative, incomplete and conditional offers being assessed;
• Development of the Huasco Water project;
• Payments for surface rights, rents and patents, tenement maintenance, and option payments;
• Commencement of the Costa Fuego feasibility study, incorporating La Verde;
• General and administrative expenses and unallocated working capital.

Strategic partnering processes advancing well

Following completion of the prefeasibility studies (PFS) for Costa Fuego and Huasco Water in March 2025, Hot Chili initiated an asset-level strategic partnering process to introduce one or more qualified partners with the financial, technical and operational capability to assist in funding and delivering each project.

The partnering process continues to progress well. Several additional parties entered the partnering process in late 2025, with the company subsequently receiving further non-binding, indicative, incomplete and conditional proposals in relation to potential transactions for the projects. The company remains actively engaged in assessing these proposals, with several parties advancing through due diligence and site visits recently.

The partnering process is continuing and may result in a range of transactions for the projects. Investors are cautioned that there is no certainty the partnering process will result in a transaction or binding agreement.

BMO Capital Markets has been appointed as financial adviser in connection with the partnering process.

Details of the placement

The company has arranged a placement of 24,242,425 shares to raise $40-million (Australian) (before costs). The placement has been completed in Australia under an offer to investors who qualify as professional or sophisticated investors under sections 708(8), (10) and (11) of the Corporations Act 2001 (Cth) for aggregate gross proceeds of approximately $21,796,002 (Australian) (13,209,698 shares), and in Canada by way of private placement pursuant to Part 5A of National Instrument 45-106 -- Prospectus Exemptions (NI 45-106) as amended and supplemented by Coordinated Blanket Order 45-935 -- Exemptions from Certain Conditions of the Listed Issuer Financing Exemption in each of the provinces and territories of Canada, other than Quebec, for aggregate gross proceeds of approximately $17,211,054 ($18,204,000 (Australian)) or 11,032,727 shares.

The new shares will be issued within the company's 25-per-cent placement capacities under Australian Securities Exchange (ASX) listing rules 7.1 and 7.1A.

Shares under the placement will be issued at a price of $1.65 (Australian) ($1.56) each and will rank equally with all other shares currently on issue. The issue price of $1.65 (Australian) per share represents a 15-per-cent discount to the company's last closing price and a 13.6-per-cent discount to the five-day volume weighted average price of Hot Chili shares traded on ASX prior to the company entering into a trading halt on Feb. 2, 2026.

The issue of the shares under the placement is expected to occur on Feb. 12, 2026, or on such other date as the company and the JLMs may agree.

The company will pay to the agents a cash commission equal to 6.0 per cent of the gross proceeds of the placement and will issue to the agents such number of non-transferable and unlisted options in the company as is equal to 5.0 per cent of the number of shares issued under the placement (1,212,121 broker options). Each broker option will be exercisable to acquire one share at a price of $2.145 (Australian) per share on or before the date that is 30 months following the issue of the broker options. The broker options will be issued within the company's capacity under ASX listing rule 7.1.

This announcement is authorized by the board of directors for release to ASX and TSX Venture Exchange.

Hot Chili's managing director and chief executive officer, Christian Easterday, is responsible for this announcement and has provided sign-off for release to the ASX and TSX-V.

We seek Safe Harbor.