Hot Chili to raise $26m

Perth-based Hot Chili has arranged a $25.6 million private placement to fund the payment of its recent copper-gold project acquisition.

Hot Chili signed a formal option agreement to acquire the Cortadera project in Chile early last year, from private mining group SCM Carola for $US10 million.

Funds raised from the share placement will be used to pay the second instalment of the acquisition and begin a 40,000-metre phase four drilling program at the Cortadera site.

Phase four drilling is scheduled to begin early in the new year.

Managing director Christian Easterday said Hot Chili was well-placed to accelerate its plans for Cortadera, based on current high copper prices.

The business will issue 609.8 million shares in two tranches to raise about $26.6 million.

That includes about 11.9 million shares under the second tranche issued to Blue Spec Sondajes Chili, a company associated with Hot Chili chairman Murray Black. 

Shares will be priced at 4.2 cents each.

Hot Chili will seek shareholder approval for the Blue Spec placement at a general meeting to be held in late January.

Settlement of the first tranche is expected to occur on December 4.

Hot Chili shares closed down 6 per cent to trade at 4.6 cents.