Annual report
Page 1
ANNUAL REPORT 2026 ABN 91 130 955 725 HOT CHILI LIMITEDANNUAL REPORT 2026ACN 130 955 725 Tipping Point
Page 2
1 C hairman’s Letter 4 2 R eview of Operations 6 3 Q ualifying Statements 1 8 4 Co rporate Activities 2 2 5 D irectors’ Report 2 5 6 A uditors’ Independence Declaration 4 5 7 I ndependent Auditors’ Report 4 6 8 D irectors’ Declaration 5 0 9 Statement of Profit or Loss and Other C omprehensive Income 5 1 10 S tatement of Financial Position 5 2 11 S tatement of Changes in Equity 5 3 12 S tatement of Cash Flows 5 4 13 N otes to the Financial Statements 5 5 14 C onsolidated Entity Disclosure Statement 8 3 15 S hareholder Information 8 4 16 T enement Schedule 8 6 17 Co rporate Directory 9 5 Contents Productora Project HOT CHILI Annual Report 2026
Page 3
Productora Resource High-Grade Starter Pit Resource San Antonio La Verde Project Copper-Gold Porphyry Discovery Significant Copper-Gold Porphyry Cortadera Resource 1HOT CHILI Annual Report 2026
Page 4
La Verde emerges as key growth asset and accelerates toward maiden MRE Progression of permitting submissions for Huasco Water & Costa Fuego Dedicated project development team built Advancement of Revised Costa Fuego Pre-Feasibility Study, including La Verde discovery Secured more than AUD$75 M in new funding 20 26 Key Highlights 2 HOT CHILI Annual Report 2026
Page 5
3HOT CHILI Annual Report 2026
Page 6
1 Ch airman’s Letter Dear shareholders, The 2026 financial year was a defining one for Hot Chili. This year also marked the completion of my first full year as the Company’s Non-executive Chairman. I remain impressed by the depth of our geological and engineering expertise, together with the Company’s strong commitment to social and community relations. Twelve months ago, La Verde was a promising shallow copper-gold discovery defined by a first-pass reverse circulation program. Today, it stands as a cornerstone asset to be integrated into our Costa Fuego copper-gold project - one of Chile’s most significant new coastal Cu-Au porphyry discoveries - with a footprint of approximately 1,000 m by 780 m, mineralisation extending 800 m from surface, and a near-surface, higher-grade enrichment zone capable of delivering a higher-grade starter pit for the greater Costa Fuego project. Our phase two drilling campaign, which commenced in September 2025 with a single diamond rig, accelerated to three rigs by May 2026 and delivered a series of standout results, including 725 m grading 0.42% CuEq from 18 m in DKD039 - the widest intersection recorded to date at La Verde - and 391 m grading 0.51% CuEq from surface in DKD044. These results underpin a maiden Mineral Resource Estimate for La Verde expected later this calendar year, followed by a revised Pre-Feasibility Study for the Costa Fuego Project incorporating the La Verde discovery, and the formal submission of the Project and Huasco Water Environmental Impact Assessment’s (EIA). Corporately, the Company has a substantially strengthened financial position. During the year the Company raised A$14.1 million through an Entitlement Offer to eligible shareholders and A$40 million through a private placement that attracted strong demand from Australian, Canadian and overseas institutional investors, together with our three largest shareholders. Shortly after year end, we secured a further US$15 million (approximately A$21.4 million) in non-dilutive funding through an Amended and Restated Investment Agreement with OR Royalties Inc., bringing total royalty consideration under the OR arrangement to US$30 million and lifting our cash position to approximately A$46 million with no debt. Hot Chili continues to advance Strategic Partnering opportunities with strong interest from multiple parties, that will facilitate ultimate mine development and operations for Costa Fuego. Hot Chili also took important organisational steps this year, establishing a dedicated project development team under a single governance framework to deliver the Environmental Impact Assessment and revised Pre-Feasibility Study programs. This marks our evolution from an exploration-focused company to a project development and delivery organisation, and positions Costa Fuego - already ranked amongst the world’s top five independent copper developments by scale not controlled by a major mining company - for the critical phase ahead. 4 HOT CHILI Annual Report 2026
Page 7
None of this would be possible without the commitment of our people in Australia and Chile, the support of the Huasco Valley communities that host our operations, and the continued confidence of you, our shareholders. Our on-ground community relations team demonstrated great leadership assisting the local Huasco communities, pre-emptively assisting with emergency supplies in advance of a major weather system which impacted large parts of the country in late July. On behalf of the Board, thank you for your efforts as an integrated part of the local community. The year ahead promises to be equally significant, with the maiden La Verde Mineral Resource, the revised Pre-Feasibility Study and submission of two Environmental Impact Assessments. We look forward to reporting on these milestones. Stuart Mathews Non-executive Chairman 5HOT CHILI Annual Report 2026
Page 8
2 R eview of Operations Highlights Hot Chili Limited (“Hot Chili” or “the Company”) continued to focus on the significant expansion of the La Verde copper-gold (Cu-Au) porphyry discovery during the year, with La Verde emerging as a cornerstone asset for the Company’s coastal range Costa Fuego copper-gold project in Chile. Standout intersection of 725 m grading 0.42% CuEq (0.36% Cu, 0.07 g/t Au) from 18 m was recorded by diamond drill hole DKD039 - the widest drilling intersection to date at La Verde, including the highest-grade 62 m grading 1.03% CuEq. Drilling accelerated from one diamond rig in September 2025 to three rigs by May 2026, doubling the depth extent of mineralisation to 800 m from surface, and defining a significant near-surface, higher-grade enrichment zone capable of potentially delivering a high-grade starter pit for early in the Costa Fuego mine schedule. With almost 30,000m of drilling complete as of July, a maiden Mineral Resource Estimate (MRE) for La Verde is expected to be released later in 2026, followed by a revised Pre-Feasibility Study (PFS2) for Costa Fuego including La Verde and formal submission of the Costa Fuego Environmental Impact Assessment in Q2 2027. 6 HOT CHILI Annual Report 2026
Page 9
The Company is well-funded, with A$14.1 million E ntitlement O ffer ( September 2025), A$40 million private placement (February 2026) and US$15 million (approximately A$21.4 million) OR Royalties amendment agreement (July 2026) completed shortly after year-end. A dedicated project development team was established to deliver these Company milestones, marking Hot Chili’s transition from an exploration-focused company to a project development and delivery organisation. Development of the Huasco Water strategic assets continued throughout the year, with formal submission of the Huasco Water Environmental Impact Assessment on schedule for end of 2026 , and progression of the second maritime licence application (desalination licence) through regulatory approval processes. 30 June 2026 cash position of A$25 million and no debt, increasing to approximately A$46 million following closure of the OR transaction. 7HOT CHILI Annual Report 2026
Page 10
La Verde Drilling Delivers Transformational Growth The second phase of drilling at La Verde commenced in September 2025, focused on expanding the initial shallow porphyry discovery. Diamond drilling (DD) targeted depth extensions and higher-grade Cu-Au centres to better define the system’s scale and grade distribution. Following the identification of up-dip higher-grade mineralisation from surface, the program was progressively expanded with a second RC rig commencing in February 2026. By May 2026, drilling was being undertaken by one DD rig and two RC rigs, significantly increasing drilling capacity a nd testing shallow extensions of the high-grade zones. The Company’s initial 10,000 m RC program had confirmed a substantial +0.2% Cu discovery footprint measuring approximately 1,000 m by 750 m and extending 400 m vertically. Phase two drilling significantly expanded this footprint, doubling the vertical extent of mineralisation to 800 m from surface and confirming the convergence of +0.4% Cu material within a strengthening high-grade core. Early in the year, diamond drill holes DKD032, DKD033, DKD034 and diamond tail DKP005D confirmed significant expansion of La Verde’s high-grade core, particularly at depth where higher-grade centres converge, and identified a high gold-to-copper ratio in the north-eastern high-grade centre. Drill hole DKD039, collared on the western extent of the discovery footprint, subsequently recorded 725 m grading 0.42% CuEq 1 (0.36% Cu, 0.07 g/t Au) from 18 m depth - the widest intersection recorded to date at La Verde – including the highest-grade intersection of 62 m grading 1.03% CuEq (0.90% Cu, 0.18 g/t Au) from 671 m. 2 R eview of Operations (Cont’d) 1 C opper Equivalent (CuEq) reported for the drillhole intersections were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery). The Metal Prices applied in the calculation were: Cu=4.50 USD/lb, Au=3,150 USD/oz, Mo=20 USD/lb, and Ag=30 USD/oz. The entirety of the intersection is assumed as fresh. The recovery and copper equivalent formula for La Verde uses Cortadera as a proxy, which is considered reasonable given both the similar mineralisation style and amenability testwork completed thus far at La Verde – Recoveries of 83% Cu, 56% Au, 83% Mo and 37% Ag. CuEq (%) = Cu(%) + 0.69 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0043 x Ag(g/t). HOT CHILI Annual Report 2026HOT CHILI Annual Report 2026 8 HOT CHILI Annual Report 2026
Page 11
2 R eview of Operations (Cont’d) In the second half of the year, step-out diamond drilling continued to deliver expansion success. Diamond drill hole DKD044 returned 391 m grading 0.51% CuEq (0.42% Cu, 0.11 g/t Au) from surface, confirming broad and continuous high-grade copper-gold mineralisation on the western side of the high-grade core. DKD049, a 175 m step-out from DKD039, confirmed a s ignificant expansion of La Verde’s eastern flank at depth, while diamond tail DKP028D extended an original RC drill hole that had ended in mineralisation, recording a further 200 m down-hole of mineralisation across the western flank. Diamond drilling was also instrumental in the development of an early “4D litho-structural model”, with the interpretation of multiple intrusive phases optimising drill target design. Hot Chili geologists continue to apply the same targeting strategies that proved successful at the Company’s nearby Cortadera Cu-Au porphyry Resource. In June, a second accredited laboratory was engaged to accelerate assay turnaround times. 1 S ee Page 18 of this report for detail on the US$3.50 Cu and US$6.00 Cu conceptual open pit shells (Exploration Targets). Any potential tonnage and grade of the Exploration Target shown is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource within the target area, and it is uncertain if further exploration will result in the estimation of a Mineral Resource. 2 C opper Equivalent (CuEq) reported for the drillhole intersections were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery). The Metal Prices applied in the calculation were: Cu=4.50 USD/lb, Au=3,150 USD/oz, Mo=20 USD/lb, and Ag=30 USD/oz. The entirety of the intersection is assumed as fresh. The recovery and copper equivalent formula for La Verde uses Cortadera as a proxy, which is considered reasonable given both the similar mineralisation style and amenability testwork completed thus far at La Verde – Recoveries of 83% Cu, 56% Au, 83% Mo and 37% Ag. CuEq (%) = Cu (%) + 0.69 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0043 x Ag(g/t). Figure 1. Plan view map of La Verde showing recent drill hole results and updated +0.2% copper (yellow), +0.3% copper (red), +0.4% copper (magenta) mineralisation interpolants. Drilled holes with pending assays are shown in black. Position of A – A’ cross section (Figure 2), and B – B’ cross section (Figure 3) annotated with white dashed lines. Conceptual open pit shells 1 displayed for $US3.50/lb Cu (blue) and $US6.00/lb Cu (green) displayed as dashed lines. Results reported including CuEq 2 and in some instances represent subsequent material results, post reporting period. HOT CHILI Annual Report 2026 9 HOT CHILI Annual Report 2026
Page 12
2 R eview of Operations (Cont’d) Figure 2. Oblique slice towards NW (Azi 325°, Plunge+26°). 0.3% and 0.4% Cu interpolants displayed for oxide and transitional material, sliced along NNE orientation with the front removed. US$3.50/lb Cu conceptual open pit shell displayed in dark grey; US$6.00/lb Cu conceptual open pit shell displayed in light grey 1. Base of weathering shown as dashed blue line. Results reported including CuEq 2 and in some instances represent subsequent material results, post reporting period. 1 S ee Page 18 of this report for detail on the US$3.50 Cu and US$6.00 Cu conceptual open pit shells (Exploration Targets). Any potential tonnage and grade of the Exploration Target shown is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource within the target area, and it is uncertain if further exploration will result in the estimation of a Mineral Resource. 2 C opper Equivalent (CuEq) reported for the drillhole intersections were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery). The Metal Prices applied in the calculation were: Cu=4.50 USD/lb, Au=3,150 USD/oz, Mo=20 USD/lb, and Ag=30 USD/oz. The entirety of the intersection is assumed as fresh. The recovery and copper equivalent formula for La Verde uses Cortadera as a proxy, which is considered reasonable given both the similar mineralisation style and amenability testwork completed thus far at La Verde – Recoveries of 83% Cu, 56% Au, 83% Mo and 37% Ag. CuEq (%) = Cu(%) + 0.69 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0043 x Ag(g/t). Starter Pit Potential Strengthened by Higher-Grade Near-Surface Results RC drilling throughout the year progressively defined an emerging, shallow zone of higher-grade copper-gold mineralisation at La Verde. By the March 2026 quarter, thirteen significant drill intersections delineated a +0.6% CuEq zone from surface to 250 m depth across a 450 m x 400 m area, demonstrating strong continuity of higher-grade material. Shallow infill and step-out RC drilling across the up-dip extension of the high-grade core continued to deliver outstanding results in the June 2026 quarter from drillholes DKP053, DKP054, DKP056 and DKP058, all containing broad zones of higher-grade (+0.7% CuEq) mineralisation from shallow depths. These results further expanded the footprint of near-surface, higher-grade mineralisation and continue to strengthen the scale and continuity of a significant near-surface enrichment zone, capable of potentially delivering a higher-grade starter pit opportunity for Costa Fuego. Results commence from surface or beneath a shallow gravel cover, indicating the capability for simple, cost-effective overburden removal in a future open pit development. A higher-grade starter pit has the potential to significantly reduce payback and positively impact the key financial metrics of Hot Chili’s March 2025 Pre-Feasibility Study. 10 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 13
2 R eview of Operations (Cont’d) Table 1: Significant Drill Results Reported in Year Ending 30 June 2026 Hole_ID Coordinates Azim. Dip Hole Depth Intersection Interval Copper Gold Silver Molybdenum North East RL From To (m) (% Cu) (g/t Au) (ppm Ag) (ppm Mo) DKD032 6,785,967 324,835 1,202 270 -60 569.9 41 569.9 528.9 0.41 0.21 0.85 13 And incl 70 218 148 0.60 0.30 0.84 13 And incl 295 361 66 0.45 0.31 0.96 10 And incl (to EOH) 556 569.9 13.9 0.35 0.12 0.79 13 DKP005 6,785,789 324,564 1,124 90 -60 441.2 32 349 317 0.38 0.10 0.9 23 (incl. new DD tail results from DKP005D) Incl 68 102 34 0.50 0.16 1.2 10 And incl 236 294 58 0.55 0.12 1.1 39 And incl 316 344 28 0.49 0.15 1.0 19 And 412 421 9 0.32 0.06 0.4 92 DKD033 6,785,775 324,785 1,132 274 -60 543 3 498 495 0.38 0.10 0.69 27 Or Incl 3 543 540 0.36 0.09 0.66 30 Incl 202 239 37 0.51 0.13 1.19 43 And incl 289 412 123 0.50 0.13 0.67 39 521 543 22 0.18 0.04 0.31 75 DKD034 6,785,837 324,433 1,096 99 -59 713.9 16 39 23 0.30 0.06 1.11 20 194 620 426 0.37 0.08 0.71 32 Incl 426 533 107 0.46 0.10 0.97 23 And Incl 566 618 52 0.50 0.08 0.99 50 679 713.9 34.9 0.27 0.06 0.68 183 DKD035 6,786,027 324,596 1,153 80 -60 278.5 38 258 220 0.47 0.37 0.14 0.65 Incl 121 153 32 0.56 0.41 0.20 0.68 & Incl 187 255 68 0.64 0.52 0.15 0.88 Or Incl 187 207 20 0.76 0.61 0.21 1.05 DKD036 6,786,029 324,597 1,153 130 -54 371.9 30 180 150 0.52 0.37 0.21 0.86 Incl 117 155 38 0.70 0.55 0.21 1.31 238 371 133 0.42 0.33 0.12 0.46 Incl 254 289 35 0.63 0.49 0.19 0.69 DKP006D 6,785,721 324,727 1,130 110 -60 384.2 76 186 110 0.39 0.27 0.15 0.84 Incl 124 172 48 0.54 0.38 0.22 1.09 Or Incl 124 144 20 0.74 0.49 0.35 1.36 & Incl 227 233 6 0.59 0.42 0.25 0.38 254 272 18 0.49 0.40 0.13 0.41 DKP021D 6,785,619 324,325 1,178 75 -60 834.1 118 128 10 0.30 0.27 0.03 0.41 284 478 194 0.32 0.26 0.06 0.45 Incl 286 300 14 0.43 0.37 0.08 0.61 & Incl 437 449 12 0.51 0.40 0.10 0.81 593 647 54 0.42 0.34 0.11 0.61 Incl 593 612 19 0.66 0.51 0.21 0.93 757 766 9 0.43 0.30 0.15 0.47 DKD037 6,785,842 324,527 1,122 69 -63 321.1 105 289 184 0.42 0.32 0.12 0.61 Incl 203 281 78 0.50 0.39 0.14 0.89 Or Incl 203 225 27 0.6 0 0.48 0.15 0.64 DKD038 6,786,088 324,685 1,185 149 -65 306.4 48 269 221 0.37 0.29 0.11 0.48 Incl 53 98 45 0.51 0.37 0.19 0.30 & Incl 126 235 109 0.41 0.32 0.11 0.59 Or Incl 175 213 38 0.50 0.40 0.13 0.77 HOT CHILI Annual Report 2026 11
Page 14
2 R eview of Operations (Cont’d) Hole_ID Coordinates Azim. Dip Hole Depth Intersection Interval Copper Gold Silver Molybdenum North East RL From To (m) (% Cu) (g/t Au) (ppm Ag) (ppm Mo) DKP009D 6,786,075 324,552 1,152 131 -60 555.3 34 422 388 0.41 0.32 0.12 0.67 Incl 386 398 12 0.51 0.41 0.14 0.85 454 499 45 0.40 0.33 0.08 0.74 Incl 455 462 7 0.60 0.49 0.13 1.14 DKP012D 6,785,977 324,839 1,193 300 -60 590.7 44 438 394 0.46 0.35 0.11 0.53 Incl 62 82 20 0.61 0.46 0.21 0.25 & Incl 192 202 10 0.64 0.47 0.18 0.57 & Incl 228 308 80 0.56 0.46 0.12 0.81 471 493 22 0.34 0.22 0.04 0.34 DKD039 6,785,723 324,420 1,150 54 -60 872.4 18.0 744 725 0.42 0.36 0.07 0.68 Incl 42.4 64 22 0.71 0.67 0.03 0.29 & Incl 249.0 295 46 0.65 0.54 0.12 0.71 & Incl 433.0 484 51 0.62 0.51 0.10 1.25 & Incl 670.7 732 62 1.03 0.90 0.18 1.81 Or Incl 693.1 713 20 1.51 1.30 0.29 2.26 800.3 816 16 0.45 0.39 0.07 0.89 DKD040 6,785,907 324,632 1,139 60 -59 381 4.4 91.0 86.6 0.34 0.15 2.11 7 incl 12.0 28.7 16.7 0.45 0.20 0.78 3 & incl 53.7 78.4 24.7 0.41 0.19 1.07 6 185.2 349.1 163.9 0.34 0.11 0.85 17 incl 206.0 226.0 20.0 0.43 0.23 0.96 12 & incl 285.0 322.0 37.0 0.42 0.09 0.80 15 DKP041 6,785,786 324,561 1,124 55 -70 380 92.0 316.0 224.0 0.31 0.10 0.64 24 Incl 112.0 136.0 24.0 0.49 0.15 0.65 14 & Incl 216.0 262.0 46.0 0.38 0.14 0.64 44 DKD042 6,785,902 324,635 1,140 300 -70 258.1 11.6 108.0 96.4 0.31 0.12 0.79 9 Incl 13.6 25.5 11.9 0.41 0.13 0.59 8 & Incl 56.4 72.8 16.5 0.34 0.15 0.51 9 & Incl 84.2 106.6 22.4 0.46 0.21 2.00 13 DKD044 6,785,738 324,508 1,131 70 -65 711.4 0.0 391.3 391.3 0.42 0.11 0.85 18 Incl 0.0 17.8 17.8 0.63 0.06 0.70 10 & Incl 103.3 144.0 40.7 0.50 0.12 0.86 20 & Incl 160.0 245.4 85.4 0.50 0.15 1.11 12 & Incl 276.1 295.8 19.7 0.57 0.15 1.06 33 & Incl 499.0 520.4 21.3 0.34 0.05 0.87 154 & Incl 595.0 620.8 26.0 0.39 0.08 0.68 25 DKP028D 6,785,617 324,758 1,136 300 -60 866.1 358.0 616.9 258.9 0.33 0.09 0.62 58 Incl 380.0 447.6 67.6 0.38 0.13 0.67 85 & Incl 499.5 526.9 27.4 0.63 0.16 1.00 29 & Incl 570.8 591.3 20.5 0.40 0.07 0.99 99 & Incl 628.0 674 46 0.20 0.03 0.50 203 DKP043 6,785,855 324,610 1,131 104 -56 3 42 8.0 214.0 206.0 0.24 0.08 0.57 37 Incl 46.0 58.0 12.0 0.32 0.14 0.35 6 & Incl 198.0 214.0 16.0 0.34 0.12 0.99 80 Table 1: Significant Drill Results Reported in Year Ending 30 June 2026 (Cont’d) 12 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 15
2 R eview of Operations (Cont’d) Hole_ID Coordinates Azim. Dip Hole Depth Intersection Interval Copper Gold Silver Molybdenum North East RL From To (m) (% Cu) (g/t Au) (ppm Ag) (ppm Mo) DKP046 6,786,025 324,597 1,153 231 -59 184 28.0 112.0 84.00 0.32 0.10 0.50 12 Incl 54 72 18.0 0.41 0.12 0.29 7 DKP047 6,785,888 324,396 1,093 70 -65 60 DKD049 6,785,858 324,601 1,131 80 -62 779.9 78.3 104.4 26.1 0.40 0.17 1.03 22 503.6 716.6 213.0 0.38 0.07 0.72 18 Incl 535.8 593.1 57.3 0.51 0.10 1.11 28 & Incl 624.0 639.8 15.8 0.45 0.08 0.65 14 DKP050 6,785,739 324,625 1,127 75 -60 354 6.0 114.0 108.0 0.31 0.08 0.31 10 Incl 8.0 48.0 40.0 0.40 0.10 0.45 6 138.0 240.0 102.0 0.28 0.09 0.34 19 DKP053 6,785,969 324,570 1,174 75 -65 408 0.0 32.0 32.0 0.34 0.04 0.49 20 64.0 314.0 250.0 0.39 0.14 0.62 10 Incl 66.0 166.0 100.0 0.47 0.15 0.65 14 Or Incl 82.0 118.0 36.0 0.59 0.18 0.44 13 & Incl 248.0 276.0 28.0 0.46 0.21 0.84 7 DKP054 6,786,024 324,756 1,188 60 -63 216 42.0 166.0 124.0 0.40 0.07 0.36 18 Incl 58.0 84.0 26.0 0.63 0.10 0.23 9 DKP055 6,786,037 324,505 1,165 60 -58 42 0.0 32.0 32.0 0.30 0.03 0.43 26 DKP056 6,786,024 324,756 1,188 118 -62 402 56.0 146.0 90.0 0.36 0.12 0.65 13 Incl 64.0 94.0 30.0 0.50 0.17 0.43 6 Or Incl 64.0 80.0 16.0 0.58 0.18 0.28 7 DKP057 6,786,108 324,674 1,182 300 -62 330 56.0 106.0 50.0 0.35 0.08 0.77 10 DKP058 6,785,775 324,785 1,134 70 -58 402 24.0 132.0 108.0 0.45 0.11 0.68 12 Incl 24.0 56.0 32.0 0.51 0.10 0.63 6 Table 2: Details of All Drill Holes Completed at Costa Fuego in Year Ending 30 June 2026 Hole ID North East RL Azimuth Dip Depth Location DKD032 6,785,975 324,839 1,192 270 -60 570 La Verde DKP005D 6,785,789 324,564 1,124 91 -60 441 La Verde DKD033 6,785,775 324,785 1,132 274 -60 543 La Verde DKD034 6,785,837 324,433 1,096 99 -59 714 La Verde DKP006D 6,785,721 324,727 1,130 110 -60 384 La Verde DKP021D 6,785,619 324,325 1,178 75 -60 834 La Verde DKD035 6,786,027 324,596 1,153 80 -60 279 La Verde DKD036 6,786,029 324,597 1,153 130 -54 372 La Verde DKD037 6,785,842 324,527 1,122 69 -63 321 La Verde DKD038 6,786,088 324,685 1,185 149 -65 306 La Verde DKP009D 6,786,075 324,552 1,152 131 -60 555.3 La Verde DKP012D 6,785,977 324,839 1,192 300 -60 590.7 La Verde DKD039 6,785,723 324,420 1,150 54 -60 840 La Verde DKD040 6,785,901 324,629 1,139 60 -59 381 La Verde DKP041 6,785,786 324,561 1,124 54 -70 390 La Verde Table 1: Significant Drill Results Reported in Year Ending 30 June 2026 (Cont’d) HOT CHILI Annual Report 2026 13
Page 16
2 R eview of Operations (Cont’d) Table 2: Details of All Drill Holes Completed at Costa Fuego in Year Ending 30 June 2026 (Cont’d) Hole ID North East RL Azimuth Dip Depth Location DKD042 6,785,902 324,635 1,140 299 -70 258.1 La Verde DKP043 6,785,848 324,593 1,130 104 -56 342 La Verde DKD044 6,785,738 324,508 1,131 71 -65 711.4 La Verde DKP045D 6,785,944 324,410 1,109 61 -60 306 La Verde DKP046 6,786,015 324,591 1,153 230 -59 184 La Verde DKP047 6,785,882 324,380 1,090 70 -65 60 La Verde DKP048D 6,785,847 324,740 1,151 80 -62 300 La Verde DKD049 6,785,852 324,600 1,126 80 -62 779.9 La Verde DKP050 6,785,739 324,625 1,127 75 -60 354 La Verde MWDKP001 6,786,124 324,064 1,106 0 -90 54 La Verde MWDKP002 6,785,654 325,511 1,171 0 -90 90 La Verde MWDKP003 6,787,100 323,167 1,042 0 -90 60 La Verde MWDKP006 6,786,674 324,410 1,102 0 -90 48 La Verde MWDKP005 6,785,505 322,883 1,075 0 -90 60 La Verde MWDKP004 6,785,505 324,566 1,170 0 -90 72 La Verde DKP051 6,785,713 324,326 1,170 55 -65 372 La Verde DKP052 6,786,024 324,756 1,188 245 -60 354 La Verde DKP053 6,785,969 324,570 1,174 75 -65 408 La Verde DKP054 6,786,024 324,756 1,188 60 -63 216 La Verde DKP055 6,786,032 324,499 1,165 60 -58 42 La Verde DKP056 6,786,024 324,756 1,188 118 -62 402 La Verde DKP057 6,786,108 324,674 1,182 300 -62 330 La Verde DKP058 6,785,775 324,785 1,134 70 -58 402 La Verde DKP059 6,785,715 324,868 1,140 65 -60 120 La Verde DKP062 6,785,616 324,761 1,136 80 -58 300 La Verde DKP061 6,785,600 324,900 1,147 270 -60 300 La Verde DKP063 6,785,708 324,564 1,134 65 -70 417 La Verde DKP064 6,785,669 324,508 1,157 100 -58 324 La Verde DKP065 6,785,745 324,194 1,152 75 -60 291 La Verde DKP066 6,785,708 324,064 1,134 255 -60 342 La Verde DKP067 6,785,775 325,511 1,134 114 -60 300 La Verde DKP045D 6,785,944 323,167 1,110 60 -60 840.5 La Verde DKD037 6,785,836 324,410 1,122 70 -62 777.1 La Verde DKP028D 6,785,620 322,883 1,136 300 -60 866.1 La Verde DKD060 6,785,762 324,566 1,139 260 -60 772.7 La Verde DKP048D 6,785,847 324,326 1,151 80 -65 457.9 La Verde DKD049 6,785,852 324,756 1,126 260 -60 779.9 La Verde 14 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 17
2 R eview of Operations (Cont’d) La Verde Maiden Mineral Resource and PFS Integration Hydrogeological, geotechnical, metallurgical, mine engineering and environmental workstreams all advanced during the year toward full integration of La Verde into the Company’s Costa Fuego production hub. Additional mineralogical analysis activities were carried out, including Terraspec data collection and drill core scanning using LithologIQ’s hyperspectral instrument. Initial metallurgical testwork for La Verde, also using seawater, indicated similar recoveries to those recorded at Costa Fuego. A maiden MRE for La Verde is expected to be released later in calendar year 2026, followed by a revised PFS for Costa Fuego, culminating in the formal submission of an Environmental Impact Assessment (EIA) for Stage 1 of the Costa Fuego Project in Q2 CY2027. The Company expects that La Verde’s rapid integration will be transformative for Costa Fuego’s financial metrics and global standing, already ranked amongst the world’s top five by scale independent copper developments, not controlled by a major mining company. 1 S ee Page 18 of this report for detail on the US$3.50 Cu and US$6.00 Cu conceptual open pit shells (Exploration Targets). Any potential tonnage and grade of the Exploration Target shown is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource within the target area, and it is uncertain if further exploration will result in the estimation of a Mineral Resource. 2 C opper Equivalent (CuEq) reported for the drillhole intersections were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne × Cu_recovery). The Metal Prices applied in the calculation were: Cu=4.50 USD/lb, Au=3,150 USD/oz, Mo=20 USD/lb, and Ag=30 USD/oz. The entirety of the intersection is assumed as fresh. The recovery and copper equivalent formula for La Verde uses Cortadera as a proxy, which is considered reasonable given both the similar mineralisation style and amenability testwork completed thus far at La Verde – Recoveries of 83% Cu, 56% Au, 83% Mo and 37% Ag. CuEq (%) = Cu(%) + 0.69 x Au(g/t) + 0.00044 x Mo(ppm) + 0.0043 x Ag(g/t). Figure 3. Long-section slice (A – A’) showing recent drill hole results and updated +0.2% copper (yellow), +0.3% copper (red), +0.4% copper (magenta) mineralisation interpolants. Returned Cu grades shown on hole traces, drilled holes with pending assays are shown in black. Conceptual open pit shells 1 displayed for $US3.50/lb Cu (blue) and $US6.00/lb Cu (green) displayed as dashed lines. Results reported including CuEq 2 and in some instances represent subsequent material results, post reporting period. 15 HOT CHILI Annual Report 2026
Page 18
2 R eview of Operations (Cont’d) Project Development Advances Global engineering firm Ausenco - with offices in Chile and Australia - was appointed during the year as the lead engineering group to progress the Feasibility Study for the Costa Fuego project. The appointment followed a review of major engineering groups in Chile, with Ausenco’s execution of engineering, procurement, construction and ramp-up of the nearby, similar-scale coastal project Mantoverde a key factor in the decision. Hot Chili also established a dedicated project development team, led by experienced project director Mr David Bayona, to advance the Costa Fuego Project through its critical development phase. Under a single governance framework, the team is overseeing delivery of the EIA and revised PFS programs, coordinating engineering, permitting, social performance, infrastructure, technical studies, project controls, key service providers and third-party stakeholders. This organisational transition marks an important step in Hot Chili’s evolution from an exploration-focused company to a project development and delivery organisation, strengthening readiness for permitting, financing, detailed engineering and project execution. Revised Pre-Feasibility Study (PFS2) In May 2026, Hot Chili commenced workstreams toward delivery of a significant revision of its 2025 PFS, aiming to incorporate the La Verde Cu-Au discovery into the Costa Fuego development strategy. The revised study is also assessing development options identified through Value Engineering Trade- off Studies undertaken following the 2025 PFS, to improve project economics, reduce execution risk and simplify project delivery. These include the integration of La Verde and the potential development of a large open-pit mining scenario at Cortadera as an alternative to the previously defined open-pit and underground block cave operation for the later years of Costa Fuego’s mine plan. Incorporating these value engineering workstreams into PFS2 will streamline their inclusion into the Feasibility Study, consistent with the engineering analysis being undertaken for the EIA. 16 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 19
2 R eview of Operations (Cont’d) Figure 4. Plan view of the Costa Fuego Project Layout, including the La Verde discovery and integrated infrastructure at Productora. HOT CHILI Annual Report 2026 17
Page 20
The scientific and technical information relating to the Company’s Costa Fuego project in this report has been derived from or is based on the Costa Fuego Copper project pre-feasibility study (the “Costa Fuego PFS” or 2025 PFS), which has been prepared in accordance with Canadian regulatory requirements set out in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and Joint Ore Reserves Committee of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (the “JORC Code”) and reviewed and approved by the “Qualified Persons” as defined under NI 43-101 and “Competent Persons” as defined under the JORC Code, as set out below. The 2025 PFS was compiled by the Qualified Persons and Competent Persons listed below based on information available up to the effective date of the PFS. Additional details of responsibilities are provided at page 48 of presentation “Costa Fuego Preliminary Feasibility Study March 2025” released on 27 March 2025. Conceptual Open Pit Shells Conceptual open pit shells represent Exploration Targets as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code). They are based on completed exploration activities reported in the announcement released 19 May 2025 (‘Hot Chili Announces Latest Drill Results for La Verde, Doubling Porphyry Discovery Footprint’). The conceptual open pit shells were generated using copper (Cu) prices of US$3.50/lb Cu and US$6.00/lb Cu on a series of nested Cu grade shells. Other input parameters informing the conceptual open-pit shells (pit slope angles, mining cost, processing cost, etc.) were derived from values reported in the March 2025 Costa Fuego Pre-feasibility Study and are considered appropriate for the style of mineralisation encountered at the La Verde Cu-Au porphyry discovery. Any potential quantity and grade of the Exploration Target shown is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource within the target area, and it is uncertain if further exploration will result in the estimation of a Mineral Resource. Further exploration activities are detailed in this report and include (but may not necessarily be limited to) a program of diamond drill holes aiming to extend the mineralised footprint at La Verde. Drilling commenced on 22 September 2025, with the length of the program dependent on a number of considerations including (but not limited to) the results of the exploration activities and regulatory applications and approvals. PFS Technical Report For readers to fully understand the information in this report, they should read the PFS Technical Report available on SEDAR+ (www.sedarplus.ca) and at www.hotchili.net.au in its entirety titled “Costa Fuego P roject, Chile, Preliminary Feasibility Study NI 43-101 Technical Report” dated 9 May 2025 with an effective date of 27 March 2025, including all qualifications, assumptions, limitations and exclusions. The PFS Technical Report is intended to be read as a whole, and sections should not be read or relied upon out of context. The technical information in this report is subject to the assumptions and qualifications to be contained in the PFS Technical Report. The PFS Technical Report replaces and supersedes the technical report titled “Costa Fuego Copper Project – NI 43-101 Technical Report Mineral Resource Estimate Update” dated 8 April 2024, with an effective date of 26 February 2024 (the “2024 PEA”). Qualified Persons – NI 43-101 The PFS was compiled by Wood Australia Pty Ltd with contributions from a team of independent “Qualified Persons” within the meaning of NI 43 -101. The scientific and technical information contained in this report pertaining to Costa Fuego has been reviewed and verified by the following independent qualified persons within the meaning of NI 43-101: Ms Elizabeth Haren (FAUSIMM (CP) & MAIG) of Haren Consulting – Mineral Resource Estimate Mr Dean David (FAUSIMM (CP)) of Wood Pty Ltd – Metallurgy Mr Piers Wendlandt (PE) of Wood Pty Ltd – Market Studies and Contracts, Economic Analysis Mr David Cuello (MAUSIMM) of GMT Servicios de Ingeniería – Geotechnical Mr Jeffrey Stevens (Pr. Eng, MSAIMM) of Wood Pty Ltd – Infrastructure and Capital Cost Mr Luis Bernal (Comisión Minera (PC) Registered Member) of Process Mineral Consulting – Leaching Mr Anton von Wielligh (FAUSIMM) of ABGM Consulting Pty Ltd – Mine Planning and Scheduling Mr Edmundo LaPorte (PE, PEng, CPEng, SME Registered Member) of High River Services - Environmental The above independent Qualified Persons have verified the information disclosed herein, including the sampling, preparation, security, and analytical procedures underlying such information. 3 Q ualifying Statements HOT CHILI Annual Report 2026 18 HOT CHILI Annual Report 2026
Page 21
Competent Persons – JORC The information in this report that relates to Mineral Resources, Exploration Results, and Ore Reserves for the Costa Fuego Project is based on information compiled by: Ms Elizabeth Haren (FAUSIMM (CP) & MAIG) who is a full-time employee of Haren Consulting – Mineral Resource Estimate Mr Dean David (FAUSIMM (CP)) who is a full-time employee of Wood Pty Ltd – Metallurgy Mr Piers Wendlandt (PE) who is a full-time employee of Wood Pty Ltd – Market Studies and Contracts, Economic Analysis Mr David Cuello (MAUSIMM) who is a full-time employee of GMT Servicios de Ingeniería – Geotechnical Mr Jeffrey Stevens (Pr. Eng, MSAIMM) who is a full- time employee of Wood Pty Ltd – Infrastructure and Capital Cost Mr Luis Bernal (Comisión Minera (PC) Registered Member) who is a full-time employee of Process Mineral Consulting – Leaching Mr Anton von Wielligh (FAUSIMM) who is a full-time employee of ABGM Consulting Pty Ltd – Mine Planning and Scheduling Mr Edmundo LaPorte (PE, PEng, CPEng, SME Registered Member) who is a full-time employee of High River Services – Environmental Mr Christian Easterday (MAIG), who is the Managing Director and is a full-time employee of Hot Chili Limited – Exploration Results Ms Haren, Mr David, Mr Wendlandt, Mr Cuello, Mr Stevens, Mr Bernal, Mr LaPorte, Mr Easterday, and Mr von Wielligh each have sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the JORC Code and as Qualified Persons under NI43-101. HOT CHILI Annual Report 2026 19 3 Qualifying S tatements (Cont’d)
Page 22
3 Qualifying S tatements (Cont’d) Disclaimer This report has been prepared by management of Hot Chili Limited (“Hot Chili” or the “Company”) and does not represent a recommendation to buy or sell securities of the Company. Investors should always consult their investment advisors prior to making any investment decisions. This report does not purport to be complete or contain all of the information that may be material to the current or future business, operations, financial condition or prospects of the Company and Hot Chili makes no representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this report. Certain information contained herein is based on, or derived from, information obtained from independent third-party sources, publicly available reports and other trade and industry sources. Hot Chili believes that such information is accurate and that the sources from which it has been obtained are reliable; however, Hot Chili has not independently verified such information and does not assume any responsibility for the accuracy or completeness of such information. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. Cautionary Note for U.S. Investors Concerning Mineral Resources NI 43-101 is a rule of the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning material mineral projects. Technical disclosure contained in this report has been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Classification System. These standards differ from the requirements of the U.S. Securities and Exchange Commission (“SEC”) and technical information contained in this report may not be comparable to similar information disclosed by domestic United States companies subject to the SEC’s reporting and disclosure requirements. All amounts in this report are in U.S. dollars unless otherwise noted. Forward Looking Statements This report contains certain statements that are “forward- looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of applicable Australian securities regulation (collectively, the “forward-looking statements”). Forward-looking statements reflect the Company’s current expectations, forecasts, and projections with respect to future events, many of which are beyond the Company’s control, and are based on certain assumptions. No assurance can be given that these expectations, forecasts, or projections will prove to be correct, and such forward-looking statements included in this announcement should not be unduly relied upon. Forward-looking information is by its nature prospective and requires the Company to make certain assumptions and is subject to inherent risks and uncertainties. All statements other than statements of historical fact are forward-looking statements. The use of words such as “anticipate”, “believe”, “coming”, “conceptual”, “consider”, “could”, “designed to”, “envisage”, “estimate”, “expect”, “expand”, “forecast”, “is coming”, “may”, “opportunity”, “proposed”, “momentum”, “plan”, “potential”, “project”, “should”, “will”, “would” and similar expressions are intended to identify forward- looking statements. The forward-looking statements within this report are based on information currently available and what management believes are reasonable assumptions. Forward-looking statements speak only as of the date of this report. Forward-looking statements relate to, among other things: the potential of the La Verde discovery; regulatory applications and approvals; the timing and results of future economic studies; and the Company’s future exploration and other business plans. Forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results, performance, or achievements of the Company to be materially different from any future HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026HOT CHILI Annual Report 202620
Page 23
3 Qualifying S tatements (Cont’d) results, performance or achievements expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking statements in this announcement, including, but not limited to, the following material factors: the ability of drilling and other exploration activities to accurately predict mineralisation; operational risks; risks related to the cost estimates of exploration; sovereign risks associated with the Company’s operations in Chile; changes in estimates of mineral resources or mineral reserves of properties where the Company holds interests; recruiting qualified personnel and retaining key personnel; future financial needs and availability of adequate financing; fluctuations in mineral prices; market volatility; exchange rate fluctuations; ability to exploit successful discoveries; the production at or performance of properties where the Company holds interests; ability to retain title to mining concessions; environmental risks; financial failure or default of joint venture partners, contractors or service providers; competition risks; economic and market conditions; and other risks and uncertainties described elsewhere in this announcement and elsewhere in the Company’s public disclosure record. Although the forward-looking statements contained in this report are based upon assumptions which the Company believes to be reasonable, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this announcement, the Company has made assumptions regarding: future commodity prices and demand; availability of skilled labour; timing and amount of capital expenditures; future currency exchange and interest rates; the impact of increasing competition; general conditions in economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; future tax rates; future operating costs; availability of future sources of funding; ability to obtain financing; and assumptions underlying estimates related to adjusted funds from operations. The Company has included the above summary of assumptions and risks related to forward-looking information provided in this announcement to provide investors with a more complete perspective on the Company’s future operations, and such information may not be appropriate for other purposes. The Company’s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom. New factors emerge from time to time, and it is not possible for management to predict all those factors or to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. The forward-looking statements contained in this report are expressly qualified by the foregoing cautionary statements and are made as of the date of this report. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward- looking statement to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. Investors should read this entire report and consult their own professional advisors to ascertain and assess the income tax and legal risks and other aspects of an investment in the Company. For additional information and assumptions underlying these statements, refer to: . The Company’s public filings with the Australian Securities Exchange (ASX) . The Canadian public disclosure record on SEDAR+ (www.sedarplus.ca) . The Company’s news releases dated 27 March 2025 and 31 March 2025, and the PFS Technical Report, released 9 May 2025 HOT CHILI Annual Report 2026 21HOT CHILI Annual Report 2026
Page 24
4 Corporate A ctivities HOT CHILI Annual Report 2026 22 HOT CHILI Annual Report 202622 HOT CHILI Annual Report 2026 Successful Completion of Financings In September 2025, the Company completed an Entitlement Offer to all eligible shareholders, raising A$14.1 million (before costs). Proceeds from the E ntitlement Offer provided funding to deliver key milestones on the growth and development of Hot Chili’s Costa Fuego copper-gold project, specifically the commencement of phase two diamond drilling at La Verde. I n February 2026, the Company closed a A$40 million (before costs) private placement to institutional, professional and other investors, which 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). Hot Chili issued a total of 24,242,425 shares, comprising 13,209,698 ordinary fully paid shares at A$1.65 on the ASX and 11,032,727 ordinary fully paid shares at CAD$1.56 on the TSXV. Additionally, 1,212,121 broker options were issued at an exercise price of A$2.145 with an expiry date of 12 August 2028 to complete the capital raising transaction. Proceeds were used to accelerate drilling across the La Verde Cu-Au discovery in support of a maiden Mineral Resource and a potential higher-grade starter pit for the Costa Fuego Project, while advancing key development milestones including the Huasco Water Project, Costa Fuego Pre-Feasibility Study, Costa Fuego EIA, ongoing exploration, strategic funding activities and general working capital requirements.
Page 25
OR Royalty Amendment Agreement Subsequent to year end, on 7 July 2026, Hot Chili executed a binding Amended and Restated Investment Agreement (the A&R Investment Agreement) with OR Royalties Inc. (OR), under which OR will acquire a Net Smelter Return (NSR) royalty over the La Verde Project, part of the broader Costa Fuego copper-gold development in Chile, for a cash payment of US$15 million (approximately A$21.4 million). The agreement expands the existing 2023 royalty arrangement between the parties and brings total royalty consideration under the OR royalty arrangement to US$30 million. K ey elements of the transaction include: . US$15 million in additional non-dilutive funding, with proceeds directed toward La Verde and b roader Costa Fuego advancement; . La Verde, a pre-resource asset, added to OR’s royalty footprint, representing a significant endorsement by one of North America’s most technically rigorous royalty companies; . A doubling of the royalty’s “look-through” value, given the OR royalty is equivalent to a 1.12% CuEq NSR royalty across payable metals for a total consideration of US$30 million against Hot Chili’s market capitalisation of approximately US$230 million; and . An updated Change of Control Buyback right, exercisable prior to the fourth anniversary of the original royalty closing, under which the OR NSR can be reduced to a 0.5% NSR royalty on copper and a 2.5% NSR royalty on gold – negotiated to ensure strategic flexibility and to not negatively impact the Company’s ongoing Strategic Partnering Process. Strategic Partnering Process Hot Chili continued to advance its asset-level Strategic Partnering Process throughout the year, aimed at introducing one or more qualified partners with the financial, technical and operational capability to assist in funding and delivery of the Costa Fuego and Huasco Water projects. Additional parties entered the Partnering Process during the year, with several advancing through due diligence, including site visits. The Company received further non-binding, indicative, incomplete and conditional proposals in relation to potential transactions for the projects and remains actively engaged in assessing these proposals. BMO Capital Markets acts as financial adviser in connection with the Partnering Process. The Partnering Process may result in a range of transactions for the projects, and investors are cautioned that there is no certainty the Partnering Process will result in a transaction or binding agreement. The Company will continue to update the market in accordance with its continuous disclosure obligations. Cash Position As at 30 June 2026, the Company had cash of A$25 million and no debt. Combined with the expected receipt of US$15 million (approximately A $21.4 million) under the OR A&R Investment Agreement shortly after year end, the Company’s cash position increased to approximately A$46 million, providing a strong funding platform as Costa Fuego advances toward development. 4 Corporate Activities (Cont’d) HOT CHILI Annual Report 2026 23
Page 26
Environmental Impact Assessment The Costa Fuego EIA continued to advance throughout the year, with a key strategic decision during the June 2026 quarter to separate the environmental permitting process into two independent EIAs: . EIA 1A - focused on the Huasco Water seawater intake, pumping and distribution system; and . EIA 1B, focused on the Productora and La Verde initial high-grade production of the Costa Fuego Project. This approach provides greater clarity for regulators, establishes independent areas of influence for environmental assessment, reduces duplication of baseline and impact evaluation work, and aligns the seawater supply system with the development of the mining project. Key workstreams advanced during the year included environmental baseline studies, community and stakeholder engagement, early community engagement (PCT), indigenous stakeholder engagement program, and preparation of the formal EIA documentation. Huasco Water – Second Maritime Licence Application A second maritime licence application (desalination licence) continued to advance through regulatory approval processes during the year. Due to a change of government in Chile earlier in the calendar year 2026, the application result has been delayed, however, Hot Chili has been assured by regulatory authorities that the application remains in progress. In line with Huasco Water’s priority status with the Chilean Ministry of Finance for streamlined approval processing, the Company expects to receive an update in relation to the application in the coming months. Social Integration and Community Support Hot Chili continued its Huasco Valley community support programs during the year. A community perception study completed in June 2026 recorded a 93% “High Positive Awareness” score, with respondents recognising the Company’s positive community relationships and its potential to develop a modern mining operation that revitalises the Huasco Valley region through employment and social benefits. During severe weather events in July 2026 that prompted a government-declared state of emergency, Hot Chili worked proactively with local communities to prepare, providing water, fuel, food and coal to neighbouring residents of Costa Fuego. Following this once-in-fifty-year rain event, the Company resumed visits to reconnect with communities, providing supplies and learning first-hand what was needed for recovery. 4 Corporate Activities (Cont’d) (Above) Hot Chili information booth in Vallenar for the PCT (Early Community Consultation) for the Company’s EIA submissions. (Left) Hot Chili Community Team providing support to neighbours of the Costa Fuego Project and (Right) impact of the recent rain event on regional infrastructure. HOT CHILI Annual Report 2026 24 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 27
5 Directors’ R eport The Directors have pleasure in presenting their report, together with the financial statements, for Hot Chili Limited (the “Company”) and its controlled entities (together referred to as the “consolidated entity” or the “Group”) for the year ended 30 June 2026 and the auditor’s report thereon. Directors The names of the Directors of Hot Chili Limited during the financial year and to the date of this report are: Stuart Mathews Independent Non-Executive Chairman C hristian Easterday Managing Director R oberto de Andraca Adriasola Non-Executive Director M ark Jamieson Non-Executive Director F iona Van Maanen Independent Non-Executive Director D irectors have been in office since the start of the financial year to the date of this report unless otherwise stated. Directors’ Information Stuart Mathews Independent Non-Executive Chairman Mr Mathews is an international mining professional with more than 32 years’ experience working across Australia, Mexico and New Zealand. Mr Mathews is highly regarded for his ability to successfully deliver projects from early feasibility stages through to mine development, construction and full-scale operations. During his career he has delivered five mining projects from exploration through development to full operations. Until his retirement from executive roles in 2024, Mr Mathews served as Executive Vice President – Australasia for Gold Fields Limited. His role involved managing Gold Fields’ regional mining portfolio that delivered +1M ounces of gold per annum as well as leading strategic growth in Australia and greater Gold Fields globally. M r Mathews is the Chair of Hot Chili’s ESG Committee and Chair of the Technical Committee, as well as a member of the Audit & Risk Committee and Remuneration Committee. He also is a Non-Executive Director with Pantoro Gold Limited. Christian Easterday Managing Director Mr Easterday is a highly experienced geologist and mineral economist with more than 25 years in the global mineral exploration and mining industry. Mr Easterday has held senior leadership and exploration management roles with leading gold producers including Placer Dome, Hill 50 Gold, and Harmony Gold. His technical expertise spans structural geology, resource development and mineral economic valuation, complemented by project negotiation and asset valuation across a range of commodities including gold, copper, silver, uranium, iron ore, nickel, and tantalum, both in Australia and internationally. He holds an Honours Degree in Geology from UWA, a Master’s Degree in Mineral Economics from Curtin University of Technology, and an MBA from Curtin’s Graduate School of Business. He is a Member of the AIG, Competent Person as defined by the JORC Code and Qualified Person within the meaning of CIM NI43-101. Mr Easterday is a founding Director of Hot Chili Limited and has served as Managing Director since the company’s successful listing on the ASX in 2010. Mr Easterday has not held any directorships in any public listed company in Australia in the last three years. Roberto de Andraca Adriasola Non-Executive Director Mr de Andraca Adriasola is an executive with 25 years’ experience in the financial and mining business. He is currently a Director of CAP S.A – one of the largest iron ore producers and the largest steel maker in Chile. He also oversaw the construction of the first desalination plant dedicated 100% to producing water for mining companies in the north of Chile. Mr de Andraca Adriasola has international finance experience with Chase Manhattan Bank, ABN Amro and Citigroup, working both in Chile and in New York. He holds an MBA from the Adolfo Ibanez Business School of Chile. He is a director of Puerto Los Losas, a port in the Atacama Region of Chile. He was elected to the board of directors of CAP S.A. on 18 April 2017; prior to that date he held the position of Vice President of Business Development. Mr de Andraca Adriasola has not held any directorships in any public listed company in Australia in the last three years. HOT CHILI Annual Report 2026 25 HOT CHILI Annual Report 2026
Page 28
Directors’ Information (Cont’d) Mark Jamieson Non-Executive Director Mr Jamieson is currently General Manager Resource Engineering for Glencore’s global copper asset group leading technical support and governance in geology, mine engineering and asset optimisation for development projects, operations and joint ventures. Mr Jamieson brings 20+ years of technical and project experience in open pit and underground operations, including sub level and block cave mines with Newcrest, MMG and Barrick Gold across Australia, Africa, South East Asia and South America. Mr Jamieson holds a bachelor’s degree with honours in Geotechnical Engineering from RMIT University, and a Masters of Engineering Science in Mining Geomechanics from The University of New South Wales. Mr Jamieson has not held any directorships in any public listed company in Australia in the last three years. Fiona Van Maanen Independent Non-Executive Director Mrs Van Maanen is a highly accomplished company director with over 30 years of progressive executive experience in corporate governance, financial management, and accounting in the mining industry. She has worked for companies who have had a diverse range of mineral projects spanning exploration, development and production environments. Mrs Van Maanen is currently Non-Executive Director of Westgold Resources Limited (ASX: WGX), Wildcat Resources Limited (ASX: WC8) and Pantoro Gold Limited (ASX: PNR). As part of her role with Hot Chili, Mrs Van Maanen will Chair the Company’s Audit and Risk Committee and Remuneration and Nomination Committee. Corporate Information Hot Chili Limited is a Company limited by shares and is domiciled in Australia. Principal Activities The principal continuing activity of the consolidated entity is mineral exploration. Results of Operations The results of the consolidated entity after providing for income tax and non-controlling interest for the year ended 30 June 2026 was a loss of $10,111,664 (2025: $11,137,547). Dividends No dividends were paid or declared since the end of the previous year. The Directors do not recommend the payment of a dividend. Review of Operations Refer to Review of Operations Report in Section 2. Significant Changes in the State of Affairs There were no significant changes to the Company’s state of affairs during the year, or subsequent to the end of the reporting period, other than what has been reported in other parts of this report. Matters Subsequent to the End of the Financial Year On 7 July 2026, the Company announced the execution of a binding Amended and Restated Investment Agreement (the A&R Investment Agreement) with OR Royalties Inc., formerly Osisko Gold Royalties Ltd (OR) pursuant to which the Company has agreed to grant to OR a Net Smelter Return (NSR) royalty on the Company’s La Verde Project, as part of the broader Costa Fuego Cu-Au Project (Costa Fuego or the Project), in consideration for cash payment of US$15 million. The A&R Investment Agreement brings total royalty consideration under the OR royalty arrangement to US$30 million (see the Company’s press releases dated 28 June 2023, and 26 July 2023) with Hot Chili to receive US$15 million (Royalty Consideration) at closing of the transactions contemplated by the A&R Investment Agreement. On 14 July 2026, 161,059 vested Service Rights and 16,106 vested Performance Rights were exercised. O n 25 July 2026, 1,914,000 Options expired without exercise or conversion. O n 7 August 2026, 32,500 vested Service Rights and 5,958 vested Performance Rights were exercised. O ther than the above, the Directors are not aware of any matters or circumstances that have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. Likely Developments and Expected Results of Operations . Delivery of a maiden Mineral Resource Estimate for the La Verde Cu-Au discovery. . Completion of the revised Pre-Feasibility Study (PFS2) for Costa Fuego, incorporating La Verde into the development strategy and assessing a large open-pit mining scenario at Cortadera, ahead of a planned Feasibility Study to position the project for a final investment decision. . Formal submission of the Costa Fuego Environmental Impact Assessments, comprising EIA 1A (Huasco Water seawater intake, pumping and distribution system) and EIA 1B (Costa Fuego Development Project). . Continued development of Huasco Water, including progression of the second maritime (desalination) licence application through Chilean regulatory approval processes. . Continuation of the Company’s exploration growth strategy, including ongoing drill programs at La Verde. . Pursuing further regional consolidation opportunities for Costa Fuego. . Continued advancement of the asset-level Strategic Partnering Process, with BMO Capital Markets as financial adviser. 5 Directors’ R eport (Cont’d) 26 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 29
5 Directors’ R eport (Cont’d) Business Risks The following are the material business risks to the Group. Construction and Start-up of New Mines The success of construction projects and the start-up of new mines by the Company is subject to a number of factors including: the availability and performance of engineering and construction contractors mining contractors, suppliers and consultants; the receipt of required governmental approvals and permits in connection with the construction of mining facilities and the conduct of mining operations; milling, processing and mining equipment and other operational elements that have to be factored in. Any delay in the performance of any one or more of the contractors, suppliers, consultants or other persons on which the Company is dependent in connection with its construction activities, a delay in or failure to receive the required governmental approvals and permits in a timely manner or on reasonable terms, or a delay in or failure in connection with the completion and successful operation of the operational elements in connection with new mines could delay or prevent the construction and start-up of new mines as planned. There can be no assurance that current or future construction and start-up plans implemented by the Company will be successful; that the Company will be able to obtain sufficient funds to finance construction and startup activities; that personnel and equipment will be available in a timely manner or on reasonable terms to successfully complete construction projects; that the Company will be able to obtain all necessary governmental approvals and permits; and that the completion of the construction, the start-up costs and the ongoing operating costs associated with the development of new mines will not be significantly higher than anticipated by the Company. Infrastructure Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants, which affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Company’s business, financial condition and results of operations. Operational Risks In addition, mining operations generally involve a high degree of risk. The Company’s operations are subject to all the hazards and risks normally encountered in the exploration and development of copper and gold properties including unusual and unexpected geologic formations, seismic activity, rock bursts, cave-ins, flooding, insufficient water, pit wall failure and other conditions involved in the drilling, blasting and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and possible legal liability. Although adequate precautions to minimize risk will be taken, operations are subject to hazards such as fire, equipment failure or failure of retaining mechanisms, conditions which may result in environmental pollution and consequent liability. Operations in Chile The Company’s Chilean property interests and operations are subject to the political risks and uncertainties associated with investment in any foreign country. The Company’s property interests located in Chile are subject to Chilean federal and state laws and regulations. As a result, the Company’s mining investments are subject to the risks normally associated with the conduct of business in foreign countries. The present attitude of the government of Chile and of the district and province where the Costa Fuego Hub is located, to foreign investment and mining has been favourable; however, investors should assess the political risks of investing in a foreign country. Any variation from the current regulatory, economic and political climate could have an adverse effect on the affairs of the Company. In addition, the enforcement by the Company of its legal rights to exploit its properties may not be recognized by the government of Chile or by its court system. Commodity Price Volatility The potential of the Company’s projects will be dependent upon the market price of mineral commodities. Mineral prices, including the prices of copper and gold, fluctuate widely and are affected by numerous factors beyond the control of the Company. Furthermore, Mineral Reserve estimations and LOM plans using significantly lower metal prices could result in material writedowns of the Company’s investment in mining properties and increased amortization, reclamation and closure charges. In addition to adversely affecting the Company’s Mineral Reserve estimates and its financial condition, declining commodity prices can impact operations by requiring a reassessment of the feasibility of a particular project. Such a reassessment may be the result of a management decision or may be required under financing arrangements related to a particular project. Even if the project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed. Financing Requirements Operations of the Company’s properties, including continuing exploration and development projects at the Costa Fuego Hub projects in Chile, may require substantial additional financing. Failure to obtain sufficient financing will result in a delay or indefinite postponement of exploration and development of any or all of the Company’s properties or even a loss of a property interest. When such additional capital is required, the Company plans to pursue sources of such capital through various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or if available, the terms of such financing might not be favourable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all and failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. If the Company does succeed in raising additional capital, future financings are likely to be dilutive to shareholders, as additional Ordinary Shares or other equity will most likely be issued to investors in future financing transactions. In addition, debt and other mezzanine financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the copper and gold industries), the Company’s market capitalization being below its planned future capital requirements if it were to construct all of its development assets, the location of the Company’s copper- gold properties in Chile and prices of copper and gold on the commodities markets (which will impact the amount of asset- based financing available) and/or the loss of key management. HOT CHILI Annual Report 2026 27
Page 30
Business Risks (Cont’d) Uncertainty in the Estimation of Mineral Reserves and Mineral Resources To extend the lives of its mines and projects, ensure the continued operation of the business and realize its growth strategy, it is essential that the Company continues to realize its existing identified Mineral Reserves, convert Mineral Resources into Mineral Reserves, develop its Mineral Resource base through the realization of identified mineralized potential, and/ or undertake successful exploration or acquire new Mineral Resources. The figures for Mineral Reserves and Mineral Resources are estimates only and no assurance can be given that the anticipated tonnages and grades will be achieved, that the indicated level of recovery will be realized or that Mineral Reserves could be mined or processed profitably. Actual Mineral Reserves may not conform to geological, metallurgical or other expectations, and the volume and grade of ore recovered may be below the estimated levels. There are numerous uncertainties inherent in estimating Mineral Reserves and Mineral Resources, including many factors beyond the Company’s control. Such estimation is a subjective process, and the accuracy of any Mineral Reserve or Mineral Resource estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. Short term operating factors relating to the Mineral Reserves, such as the need for orderly development of the ore bodies or the processing of new or different ore grades, may cause the mining operation to be unprofitable in any particular accounting period. In addition, there can be no assurance that copper and gold recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production. Lower market prices, increased production costs, reduced recovery rates and other factors may result in a revision of its Mineral Reserve estimates from time to time or may render the Company’s Mineral Reserves uneconomic to exploit. Mineral Reserve data are not indicative of future results of operations. If the Company’s actual Mineral Reserves and Mineral Resources are less than current estimates or if the Company fails to develop its Mineral Resource base through the realization of identified mineralized potential, its results of operations or financial condition may be materially and adversely affected. Evaluation of Mineral Reserves and Mineral Resources occurs from time to time and they may change depending on further geological interpretation, drilling results and metal prices. The category of Inferred Mineral Resource is the least reliable Mineral Resource category and is subject to the most variability. The Company will regularly evaluate its Mineral Resources and Mineral Reserves and will determine the merits of increasing the reliability of its overall Mineral Resources. Uncertainty Relating to Mineral Resources Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Due to the uncertainty which may attach to Inferred Mineral Resources, there is no assurance that Inferred Mineral Resources will be upgraded to Proven Mineral Reserves and Probable Mineral Reserves as a result of continued exploration. Community Relations The Company’s relationship with the communities in which it operates is critical to the successful development, construction and operation of its properties. There is an increasing level of public concern relating to the perceived effect of mining activities on the environment and on communities impacted by such activities. Publicity adverse to the Company, its operations or extractive industries generally, could have an adverse effect on the Company and may impact relationships with the communities in which the Company operates and other stakeholders. While the Company is committed to operating in a socially responsible manner, there can be no assurance that the Company’s efforts in this respect will mitigate this potential risk. The Company’s projects, including exploration projects, may also be impacted by relations with various community stakeholders, and the Company’s ability to develop related mining assets may still be affected by unforeseen outcomes from such community relations. Corporate Governance Statement The Board is responsible for the overall corporate governance of the Company, and it recognises the need for the highest standards of ethical behaviour and accountability. It is committed to administering its corporate governance structures to promote integrity and responsible decision making. The Company’s corporate governance structures, policies and procedures are described in its Corporate Governance Statement which is available on the Company’s website at http://www.hotchili.net.au/about/corporate-governance- procedures-and-policies/ Security Holding Interests of Directors At Reporting Date Ordinary Shares Service Rights Performance Rights Direct Indirect Direct Indirect Direct Indirect Directors Interest Interest Interest Interest Interest Interest Stuart Mathews 200,000 - 66,665 - - - Christian Easterday 505,881 1,385,932 - - - 763,624 Roberto de Andraca Adriasola 200,000 - 87,000 - - - Mark Jamieson - - - - - - Fiona Van Maanen - - - 33,482 - - 5 Directors’ R eport (Cont’d) 28 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 31
5 Directors’ R eport (Cont’d) Unissued Shares under Option and Rights Vested Unlisted Options There were 1,212,121 unissued ordinary shares under option as at the date of this report. The details of the options are as follows: Expiry Date No. Shares Under Option Exercise Price 1 2 Aug 2028 1,212,121 A$2.145 The holders of these options do not have the right, by virtue of the option, to participate in any share issue or interest issue of the Company or of any other body corporate or registered scheme. Service Rights There were 420,302 service rights at the date of this report. The vesting conditions for 420,302 of these rights have been met and therefore, 420,302 service rights are exercisable at the date of this report. Performance Rights There were 4,163,682 performance rights at the date of this report. The vesting conditions for 40,170 of these rights have been met and therefore, 40,170 performance rights are exercisable at the date of this report. Shares Issued on the Exercise of Options or Rights No listed or unlisted options were exercised during or since the end of the financial year. A total of 236,016 unlisted rights have been exercised since the end of the financial year. Options and Rights Expired, Lapsed or Cancelled On 25 July 2026, 1,914,000 options expired without exercise or conversion. N o other listed or unlisted options or rights expired during or since the end of the financial year. Directors Benefits During or since the financial year ended 30 June 2026, no Director of the consolidated entity has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors shown in the financial statements) by reason of a contract made by the consolidated entity with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest. Company Secretary Mrs Carol Marinkovich has over 25 years’ experience in the mining industry with extensive experience in Company Secretarial and Corporate Governance Practices within Australia and internationally. Mrs Marinkovich is a Member of the Governance Institute of Australia and the Institute of Chartered Secretaries and Administrators in London. Directors’ Meetings The number of directors’ meetings attended by each of the Directors of the Company during the year were: Board Meetings A udit & Risk Committee R emuneration & Nomination C ommittee ESG Committee T echnical Committee Director Held 1 Attended Held1 Attended Held 1 Attended Held 1 Attended Held 1 Attended Stuart Mathews 7 7 6 6 4 4 2 2 1 1 Christian Easterday 7 7 6 6 4 4 2 2 1 1 Roberto de Andraca Adriasola 7 7 - - - - - - - - Mark Jamieson 7 6 - - - - - - - - Fiona Van Maanen 7 7 6 6 4 4 2 2 1 1 1 Held indicates the number of meetings available for attendance by the director during the tenure of each director. HOT CHILI Annual Report 2026 29
Page 32
Indemnification and Insurance of Directors and Officers During the financial year, the consolidated entity maintained an insurance policy which indemnifies the directors and officers of Hot Chili Limited in respect of any liability incurred in connection with the performance of their duties as directors or officers of the consolidated entity. The consolidated entity’s insurers have prohibited disclosure of the amount of the premium payable and the level of indemnification under the insurance contract. Indemnification and Insurance of Auditor The consolidated entity has not, during or since the end of the financial year, indemnified or agreed to indemnify the a uditor of the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or related entity. Environmental Issues The consolidated entity’s exploration and mining operations are subject to environment regulation under the law of Chile. No bonds are necessary in respect of the consolidated entity’s tenement holdings. The Directors advise that during the year ended 30 June 2026 no claim has been made by any competent authority that any environmental issues, condition of license or notice of intent has been breached. The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report annual greenhouse gas emissions and energy use. For the measurement period, 1 July 2025 to 30 June 2026, the Directors have assessed that there are no current reporting requirements but may be required to do so in the future. Occupational Health and Safety Health and safety actions are framed within the “Quality, Environment, Safety and Occupational Health Integrated Policy” that states that people´s health and safety is safeguarded within the different fields of our activity. Hot Chili Limited strictly follows the Chilean safety rules and communicates a set of key performance indicators to the Chilean Mining Safety Authority on a monthly basis. Health and safety activities follow an action plan aimed to prevent and control different forms of risk at company operations. The plan covers specific areas such as the Compliance of Legal and Other Standards, Risk Assessment and Control, Occupational Health, Emergency Response, Training, Incidents - Corrective and Preventive Action, Management of Contractors and Suppliers, Audit and Management Review. Hot Chili Limited provides continuous training to enable employees to perform their work safely and efficiently. Training focuses on six areas where the risks are more evident according to the nature of our operations: Safe Driving, Drilling Platform Operations, Emergency Plans and Protection from Ultraviolet Radiation, Dust and Noise Emissions. In terms of safety performance, “Lost Time Incident Frequency Rate (LTIFR)”1 is the main indicator we monitor to make sure our action plan remains effective and relevant. The LTIFR during the last 24 months (until 30 June 2026) is 18. 1 LTIFR = number of lost time injuries in accounting period * 1 ,000,000 / total hours worked in accounting period Auditor RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001. Non-Audit Services The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the g eneral standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons: . all non-audit services are reviewed and approved by the directors prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and . the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110 Code of Ethics for Professional Accountants (including Independence Standards) set by the Accounting Professional & Ethical Standards Board. Non-audit services that have been provided by the entity’s auditor, RSM Australia Partners, have been disclosed in Note 29. Officers of the Company Who are Former Partners of RSM Australia Partners There are no officers of the Company who are former partners of RSM Australia Partners. Proceedings on Behalf of Company No person has applied for leave of Court to bring proceedings on behalf of the consolidated entity or intervene in any proceedings to which the consolidated entity is a party for the purpose of taking responsibility on behalf of the consolidated entity for all or any part of those proceedings. The consolidated entity was not a party to any such proceedings during the year. 5 Directors’ R eport (Cont’d) 30 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 33
Rounding of Amounts The consolidated entity is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2026/183, issued by the Australian Securities and Investments Commission. As such, the amounts contained in this report and in the financial report have been rounded to the nearest dollar in accordance with that Corporations Instrument, unless otherwise stated. Auditors Independence Declaration A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this Directors’ Report. REMUNERATION REPORT (AUDITED) The remuneration report outlines the key management personnel arrangements for Hot Chili Limited and its subsidiaries (“Hot Chili” or the “Company”), in accordance with the requirements of the Corporations Act 2001 and its regulations. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors (executive or otherwise). The information provided in this remuneration report has been audited. 1. P rinciples Used to Determine Amount and Nature of Remuneration The objective of the entity’s executive reward framework is to ensure that reward for performance is competitive and appropriate for the results delivered. The reward framework should align executive reward with the achievement of strategic objectives of the organisation and the creation of value for shareholders. It should provide the ability to attract, retain and motivate the best incumbents to perform at a high level. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices: • c ompetitiveness and reasonableness; • a cceptability to shareholders; • t ransparency; and • c apital management. The Remuneration and Nomination Committee is responsible for the process of determining and reviewing remuneration arrangements for Directors and executives. In doing so, the Remuneration and Nomination Committee is guided by the objectives and responsibilities as set out in the Remuneration and Nomination Committee Charter, a copy of which is available on the Company’s website. 2. S enior Executives The Company has structured an executive remuneration framework that is market competitive and aligns the interest of shareholders with that of the participants in the Employee Incentive Plan: . Base pay; . Superannuation; . Benefits; . Short-term incentives (STI); and . Long-term incentives (LTI). The total of these comprise the executive’s total remuneration. Base Pay Base pay is the total cost of employment that is reflective of current markets conditions and has been benchmarked to peers. It should attract and retain high quality executives through market competitive and fair remuneration. The current base remuneration for key management personnel was last reviewed with effect from January 2026. Use of remuneration Consultants The Company utilises Rem-Smart Pty Ltd’s (RemSmart) remuneration benchmarking platform, which provides access to salary market data and peer group comparisons. Analysis of this data across a range of relevant parameters indicated that remuneration should be positioned within the 60th to 75th percentile of the market. This benchmarking information was used as the basis for determining base salaries for executives and senior management. RemSmart’s subscription service is $4,125 per annum. Superannuation Superannuation is paid to Australian-based employees at statutory rates. Canadian and Chilean based directors and employees are not paid superannuation. Benefits The Company provides coverage under the director and officer insurance policy and travel insurance policy for appropriate persons. Chile-based employees are paid mandatory and non-waivable employments benefits that encompass occupational injuries insurance, unemployment insurance and disability and survivors’ insurance. Novated Lease Salary Sacrifice The Company allows employees to finance the purchase of an electric motor vehicle under a salary sacrifice arrangement. Typically, the cost of the motor vehicle and all running costs of the vehicle, including electricity, registration, maintenance and insurance can be packaged into a number of payments over a fixed term, with a residual payment due at the end of the lease. The payments are deducted from the employee’s pre-tax salary, thereby offering tax-effective benefits to the employee. Eligible electric vehicles (up to the luxury car tax threshold) through a novated lease are exempt from fringe benefits tax (FBT) and are the only vehicles eligible for novated leasing. 5 Directors’ R eport (Cont’d) HOT CHILI Annual Report 2026 31
Page 34
REMUNERATION REPORT (AUDITED) (CONT’D) 2. S enior Executives (Cont’d) Short and Long-Term Incentives It is an underlying premise of the incentive plan that executives should not be unjustly enriched at the expense of the Company, but rather share in the value they create over a designated period. The plan should: . Attract and retain a high standard of managerial and technical personnel for the benefit of the Company; . Allow for reward where the Company achieves or exceeds stated goals; . Align the interests of plan participants with shareholder interests; and . Provide reward for exceptional performance and not reward an executive for performing their “day” job. The Employee Incentive Plan was re approved at the Annual General Meeting held 27 November 2025. Terms and conditions of the Service and performance rights issued to Directors and the Managing Director were approved by shareholders at this same meeting. The Remuneration and Nomination Committee reviewed the STI and LTI strategy and the Board approved the new plan on the 27 January 2026. The plan was adopted effective 1 January 2026. T he workings of the plan allow for a short-term annual retention scheme and a long-term incentive plan over a three-year period. S hort-Term Incentive Plan (STIP) The aim of the STIP is attraction and retention of key staff engaged in the Company’s business. . The retention award may be realised in rights. The terms of the rights granted under the plan shall be determined by the Board from time to time (subject to shareholder approval for any rights to be granted to non-executive Directors and the Managing Director). The rights themselves do not carry the right to vote, the right to dividends or a return of capital or participation in the surplus assets of the Company on winding up. . The award provides recognition for continuity, loyalty and commitment to the Company, . From the Company’s perspective, the risk of losing key skills or even teams is reduced and it assists the C ompany in managing their salary overhead structure in a constrained manner. . The incumbent is required to be under the employ of the Company at the end of a period to qualify for the rights (subject to good leaver provisions) The STI performance period is 1-year from 1 January 2026 to 31 December 2026. T he STI Key Performance Indicators (KPI’s) are: 5 Directors’ R eport (Cont’d) Metric Weighting Target Score Lost Time Injury Frequency Rate (LTIFR)* 20 Annual LTIFR decreases by 10% or more 30 Annual LTIFR stays within ±10% 15 Annual LTIFR increases by 10% or more 0 Environmental 10 No serious breaches of environmental management 10 Serious breach of environmental management 0 Projects Progress towards completion of operational/strategy tasks as set by the Managing Director 30 1 00% completion of projects 30 Between 50% and 75% completion of projects 22.5 Between 25% and 50% completion of projects 15 Between 0% and 25% completion of projects 7.5 No completion of projects 0 Personal Performance 40 Exceptional achievement and exceptional effort 40 Good effort and exceptional achievement 30 Good effort and good achievement 20 Average effort and good achievement 10 Low effort or achievement 0 Total 100 * In the event of a serious safety incident or workplace fatality, the Board has the discretion to withhold all or part of the STI incentive. 32 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 35
REMUNERATION REPORT (AUDITED) (CONT’D) 2. S enior Executives (Cont’d) Long-Term Incentive Plan (LTIP) While the short-term plan should drive continuity, the LTIP should drive behaviour. The structure of the performance rights compromising the LTI portion of the plan have been determined with the following objectives: . The deferred award is linked to the achievement of the long-term business objectives of the company. . It is linked to both market and non-market objectives. . In determining the terms of the market-based performance rights, it is noted that Investors commonly value their portfolio on both absolute and relative total return. An absolute return measure reflects the level of performance that a shareholder requires from their leadership. A relative return reflects the market’s view of the leadership team’s performance as measured a gainst an appropriate peer group. The Company’s peer group has been selected with the following criteria – relative to both the exchanges that it is listed on, relative to the stage and size of the Company, relative to the commodity and region of the Costa Fuego project – and is disclosed below. . The key non-market objective is the growth in resources of the Company, either by commercial means or exploration and development activity. A further key non-financial measure but relevant to the well-being of employees and to the perception, reputation and development of the Company, is a long-term safety performance measure. The LTIs are performance rights measured over a 2-year and a 3-year performance cycle. 50% of LTIP performance rights issued in the reporting period are subject to a 2-year performance period (1 January 2026 to 31 December 2028) and the other 50% are subject to a 3-year performance period (1 January 2026 to 31 December 2029). The rights are subject to the following performance conditions: 5 Directors’ R eport (Cont’d) Rights KPIs LTI % LTI KPI 1 Relative Total Shareholder Return (RTSR) 25% LTI KPI 2 Absolute Total Shareholder Return (ATSR) 25% LTI KPI 3 Resource Growth 40% LTI KPI 4 Definitive Feasibility Study (DFS) 10% Relative Total Shareholder Return (RTSR) Performance Condition The RTSR Rights (25% of total LTI Rights) are measured against a defined peer group of companies over the measurement periods (1 January 2026 to 31 December 2028 and 1 January 2026 to 31 December 2029), which the Board considers compete with the Company for the same investment capital, both in Australia and overseas, and which by the nature of their business are influenced by commodity prices and other external factors similar to those that impact on the TSR performance of the Company. The representative peer group comprise the following: ASX listed companies TSX/TSXV listed companies AIC Mines (ASX: A1M) Arizona Sonoran Copper (TSX: ASCU) Blackstone Minerals (ASX: BSX) Generation Mining Ltd (TSX: GENM) Dreadnought Resources Ltd (ASX: DRE) Laurion Mineral Exploration Inc. (TSXV: LME) KGL Resources Ltd (ASX: KGL) Los Andes Copper Ltd. (TSXV: LA) Legend Mining Ltd (ASX: LEG) Max Resource Corp. (TSXV: MAX) Titan Minerals Ltd (ASX: TTM) Northisle (TSX: NCX) Caravel Minerals Limited (ASX: CVV) Northwest Copper (TSX: NWST) Carnaby Resources Limited (ASX: CNB) Troilus Gold Corp (TSX: TLG) Cyprium Metals Limited (ASX: CYM) Tudor Gold Corp. (TSX: TUD) HOT CHILI Annual Report 2026 33
Page 36
REMUNERATION REPORT (AUDITED) (CONT’D) 2. S enior Executives (Cont’d) Long-Term Incentive Plan (LTIP) (Cont’d) The vesting schedule for the RTSR measure is as follows: RTSR Performance % Contribution to the Number of Employee Rights to Vest Below 50th percentile 0% At 50th percentile 50% Between 50th and 75th percentile Pro-rata from 50% to 75% Greater than 75th percentile 100% Absolute Total Shareholder Return (ATSR) Performance Condition The ATSR Rights (25% of total LTI Rights) will vest subject to the performance of the Company’s ATSR over the measurement periods. The ATSR will be measured by comparing the 20-day VWAP at grant date (1 January 2026) to the 20-day VWAP at the measurement dates (31 December 2028 and 31 December 2029). The vesting schedule for the ATSR measure is as follows: ATSR Performance % Contribution to the Number of Employee Rights to Vest Below 10% 0% Between 10% and up to 25% Pro-rata from 50% to 75% Between 25% and up to 50% Pro-rata from 75% to 100% Greater than 50% 100% Resource Growth Performance Condition Resource Growth Rights (40% of total LTI Rights) will be measured by Hot Chili reporting or announcing to ASX global independently estimated JORC compliant resources and reserves (for all Company projects) reported at or above: a) 0 .21% Cu equivalent or greater for open-pit resources; and b) 0 .3% Cu equivalent or greater for underground resources. The vesting schedule for the Resource Growth measure is as follows: Resource Growth Performance % Contribution to the Number of Employee Rights to Vest Less than a 10% growth 0 Between 10% and 20% growth 50% Greater than a 20% growth 100% Definitive Feasibility Study (DFS) Performance Condition The DFS Rights (10% of total LTI Rights) will be measured by Hot Chili completing a DFS for the Costa Fuego Cu-Au Project. 5 Directors’ R eport (Cont’d) 34 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 37
3. N on-Executive Directors Shareholders approve the maximum aggregate remuneration for Non-Executive Directors. The aggregate Non-Executive Directors’ remuneration was set at a maximum of A$600,000 at a general meeting of shareholders prior to the Company’s IPO in 2010. Fees paid to Non-Executive Directors are recommended by the Remuneration and Nomination Committee and approved by the Board. The Non-Executive Directors receive fixed fee remuneration consisting of a cash fee and statutory Superannuation contributions for Australian directors, and additional fees for committee roles. The fees reflect the demands made on, and the responsibilities of, the directors. As outlined in section two of the Remuneration Report “Use of Remuneration Consultants”, the Remuneration Committee received advice from an independent remuneration firm. In this case, RemSmart provided the Remuneration and Nomination Committee with a remuneration report assessing the fees of Non-Executive Directors against a benchmark peer group to ensure that Non-Executive Directors fees are appropriate and in line with the market. The Company aims to: . Ensure a strong alignment between the board and shareholder interests; and . Have the advantage of preservation of operational cashflow. Base Fees1 2026 (A$) 2025 (A$) Chairman 141,000 90,000 Other Non-Executive Directors 75,000 46,000 Service rights 2 Chairman - 51,000 Other Non-Executive Directors - 29,000 Committee Fees Each Chair 9,000 9,000 Each Committee Member 4,500 4,500 1 Eff ective 1 January 2026, the portion of Non-Executive Director remuneration previously provided through service rights was converted to cash- based director fees. This change aligns the Company’s Non Executive Director remuneration structure with prevailing market practice. Accordingly, no service rights form part of Non-Executive Director remuneration from 1 January 2026. 2 S ervice rights are granted over a three-year period and vest equally each year. The total three-year service rights for the Chair are $153,000 and non-Executive Directors are $87,000. 5 Directors’ R eport (Cont’d) HOT CHILI Annual Report 2026 35
Page 38
REMUNERATION REPORT (AUDITED) (CONT’D) 4. K ey Management Personnel The directors and other key management personnel (“KMP”) of the consolidated entity during or since the end of the financial year were: Non-Executive Directors Position Stuart Mathews Independent Non-Executive Chairman Roberto de Andraca Adriasola Non-Executive Director Mark Jamieson Non-Executive Director Fiona Van Maanen Independent Non-Executive Director Executive Director Position Christian Easterday Managing Director Other KMP Position José Ignacio Silva Executive Vice President Grant King Chief Operating Officer Alberto Cerda 1 Project Director/Consultant David Bayona (appointed 2 March 2026) Project Director 1 U ntil 1 December 2025 when he moved to a consulting role. Except as noted, the named persons held their current position for the whole of the financial year and since the end of the financial year. 5 Directors’ R eport (Cont’d) 36 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 39
REMUNERATION REPORT (AUDITED) (CONT’D) 5. R emuneration of Directors and Other KMP for the Reporting Period 2026 Short-Term Benefits Post-Employment Benefits Share-based Payments Name Salary and Fees $ Other Benefits 3 $ Superannuation $ Service and Performance Rights 1 $ Total $ Performance Related % Directors Mr Stuart Mathews 138,000 - 16,560 239,999 394,559 60.8 Christian Easterday 451,347 34,486 57,090 257,442 800,365 32.2 Roberto de Andraca Adriasola 60,500 - - 5,408 65,908 8.2 Mark Jamieson 2 - - - - - - Fiona Van Maanen 85,250 - 10,230 30,134 125,614 24.0 735,097 34,486 83,880 532,983 1,386,446 38.4 Other KMP José Ignacio Silva 378,930 - - 211,300 590,230 35.8 Grant King 313,632 30,195 30,000 198,254 572,081 34.7 Alberto Cerda 4 183,228 - - - 183,228 - David Bayona 5 129,468 8,617 - - 138,085 - 1,005,258 38,812 30,000 409,554 1,483,624 27.6 Total 1,740,355 73,298 113,880 942,537 2,870,070 32.8 1 T he share-based payments values disclosed above are based on accounting estimates using valuation models for each class of service or performance rights as outlined in more detail in Note 23. 2 M ark Jamieson has elected to forego an entitlement to remuneration as a Non-Executive Director on the basis that he is entitled to remuneration as an employee of Glencore. 3 R eportable Fringe Benefits related to Novated Leases of motor vehicles. 4 U ntil 1 December 2025 when he moved to a consulting role 5 A ppointed 2 March 2026 5 Directors’ R eport (Cont’d) HOT CHILI Annual Report 2026 37
Page 40
REMUNERATION REPORT (AUDITED) (CONT’D) 5. R emuneration of Directors and Other KMP for the Reporting Period (Cont’d) 2025 Short-Term Benefits Post-Employment Benefits Share-based Payments Name Salary and Fees $ Other Benefits 7 $ Superannuation $ Service and Performance Rights 1 $ Total $ Performance Related % Directors Mr Stuart Mathews 5 15,136 - 1,741 - 16,877 - Christian Easterday 394,390 11,999 48,992 251,792 707,173 35.6 Roberto de Andraca Adriasola 46,000 - - 20,642 66,642 31.0 Mark Jamieson 2 - - - - - - Fiona Van Maanen 4 20,265 - 2,330 - 22,595 - Dr Nicole Adshead-Bell 3 44,000 - - 5,640 49,640 11.4 Stephen Quin 3 34,750 - - 3,207 37,957 8.4 554,541 11,999 53,063 281,281 900,884 31.2 Other KMP José Ignacio Silva 324,002 - - 146,799 470,801 31.2 Grant King 286,680 10,175 29,932 135,968 462,755 29.4 Alberto Cerda 112,817 - - - 112,817 - 723,499 10,175 29,932 282,767 1,046,373 27.0 Total 1,278,040 22,174 82,995 564,048 1,947,257 29.0 1 T he share-based payments values disclosed above are based on accounting estimates using valuation models for each class of service or performance rights as outlined in more detail in Note 23. 2 M ark Jamieson has elected to forego an entitlement to remuneration as a Non-Executive Director on the basis that he is entitled to remuneration as an employee of Glencore. 3 Dr Nicole Adshead-Bell and Stephen Quin resigned on the 11 March 2025. 4 Fiona Van Maanen was appointed on the 17 March 2025. 5 Stuart Mathews was appointed on the 12 May 2025. 6 A lberto Cerda was appointed on the 1 April 2025. 7 Reportable Fringe Benefits related to Novated Leases of motor vehicles. 5 Directors’ R eport (Cont’d) 38 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 41
REMUNERATION REPORT (AUDITED) (CONT’D) 6. D irector and Other KMP Interests in the Shares, Options, Service Rights and Performance Rights of the Company 6.1 D irector and Other KMP Interests in Shares The number of shares in the Company held during the financial year up to 30 June 2026, by each director and other KMP of Hot Chili Limited, including their personally related parties, is set out below. Balance at the Start of the Year No. G ranted as Compensation No. R eceived on Exercise of Options or Rights No. O ther Changes During the Year No. B alance at the End of the Year No. D irectors Stuart Mathews - 200,000 - - 200,000 Christian Easterday 681,237 - 980,687 208,931 1,870,855 Roberto de Andraca Adriasola 150,000 - - 50,000 200,000 Mark Jamieson - - - - - Fiona Van Maanen - - - - - 831,237 200,000 980,687 258,931 2,270,855 Other KMP José Ignacio Silva 121,045 - 394,593 (150,000) 365,638 Grant King 11,572 - 529,571 100,000 641,143 Alberto Cerda 1 - - - - - David Bayona 2 - - - - - 132,617 - 924,164 (50,000) 1,006,781 Total 963,854 200,000 1,904,851 208,931 3,277,636 1 U ntil 1 December 2025 when he moved to a consulting role 2 A ppointed 2 March 2026 6.2 D irector and Other KMP Interests in Options Since the end of the previous financial year, no directors or other KMP held any options in the Company. 5 Directors’ R eport (Cont’d) HOT CHILI Annual Report 2026 39
Page 42
REMUNERATION REPORT (AUDITED) (CONT’D) 6. D irector and Other KMP Interests in the Shares, Options, Service Rights and Performance Rights of the Company (Cont’d) 6.3 D irector and Other KMP Interests in Service Rights Directors and other KMP holdings of service rights in the Company are as follows: Balance at the Start of the Year No. G ranted as Compensation No. Exercised During the Year No. E xpired During the Year No. Other Changes During the Year No. B alance at the End of the Year No. V ested and Exercisable at the End of the Year 1 No. D irectors Stuart Mathews - 66,665 - - - 66,665 66,665 Christian Easterday 828,750 - (828,750) - - - - Roberto de Andraca Adriasola 87,000 - - - - 87,000 87,000 Mark Jamieson - - - - - - - Fiona Van Maanen - 33,482 - - - 33,482 33,482 915,750 100,147 (828,750) - - 187,147 187,147 Other KMP José Ignacio Silva 483,176 - (322,117) - - 161,059 161,059 Grant King 447,525 - (447,525) - - - - Alberto Cerda 2 - - - - - - - David Bayona 3 - - - - - - - 930,701 - (769,642) - - 161,059 161,059 Total 1,846,451 100,147 (1,598,392) - - 348,206 348,206 1 D uring the year, Tranche 3 of the service rights vested effective 31 December 2025. 2 U ntil 1 December 2025 when he moved to a consulting role. 3 A ppointed 2 March 2026. 5 Directors’ R eport (Cont’d) 40 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 43
REMUNERATION REPORT (AUDITED) (CONT’D) 6. D irector and Other KMP Interests in the Shares, Options, Service Rights and Performance Rights of the Company (Cont’d) 6.4 D irector and Other KMP Interests in Performance Rights Directors and other KMP holdings of performance rights in the Company are as follows: Balance at the Start of the Year No. G ranted as Compensation No. Exercised During the Year No. E xpired During the Year 1 No. O ther Changes During the Year No. B alance at the End of the Year No. V ested and Exercisable at the End of the Year 2 No. D irectors Stuart Mathews - - - - - - - Christian Easterday 759,687 763,624 (151,937) (607,750) - 763,624 - Roberto de Andraca Adriasola - - - - - - - Mark Jamieson - - - - - - - Fiona Van Maanen - 759,687 763,624 (151,937) (607,750) - 763,624 - Other KMP José Ignacio Silva 442,911 326,430 (72,476) (354,329) - 342,536 16,106 Grant King 410,231 307,203 (82,046) (328,185) - 307,203 - David Bayona 3 - - - - - - - 853,142 633,633 (154,522) (682,514) - 649,739 16,106 Total 1,612,829 1,397,257 (306,459) (1,290,264) - 1,413,363 16,106 1 These performance rights expired on 31 December 2025. 2 D uring the year, Class A (Tranches 1 & 2) and Class B (Tranche 1) performance rights vested effective 31 December 2025. 3 D avid Bayona was appointed on the 2 March 2026. 6.5 S hare-based compensation Issue of shares Details of shares issued to directors and other key management personnel as part of compensation during the year ended 30 June 2026 are set out as follows: Name Date No. of Shares Issue price $ Stuart Mathews 18/12/2025 200,000 0.90 180,000 Service rights The terms and conditions of each grant of service rights over ordinary shares affecting remuneration of directors and other key management personnel in this financial year or future reporting years are as follows: Tranche Name Grant Date No. of Rights Expiry Date Vesting Period To Valuation per Right: ($) Tranche 3 Christian Easterday 10/05/2023 276,250 11/05/2028 31/12/2025 0.98 Tranche 3 Grant King 10/05/2023 149,175 11/05/2028 31/12/2025 0.98 Tranche 3 Jose Ignacio Silva 10/05/2023 161,059 11/05/2028 31/12/2025 0.98 Tranche 3 Fiona Van Maanen 19/12/2025 33,482 19/12/2030 31/12/2025 0.90 Tranche 3 Stuart Mathews 19/12/2025 66,665 19/12/2030 31/12/2025 0.90 Tranche 3 Roberto de Andraca Adriasola 10/05/2023 29,000 11/02/2028 31/12/2025 0.98 Service rights granted carry no dividend or voting rights. 5 Directors’ R eport (Cont’d) HOT CHILI Annual Report 2026 41
Page 44
REMUNERATION REPORT (AUDITED) (CONT’D) 6. D irector and Other KMP Interests in the Shares, Options, Service Rights and Performance Rights of the Company (Cont’d) 6.5 S hare-based compensation (Cont’d) Performance rights The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of directors and other key management personnel in this financial year or future reporting years are as follows: Tranche Name Grant Date No. of Rights Expiry Date Vesting Period To Valuation per Right: ($) Class A - Tranche 3 Christian Easterday 10/05/2023 27,625 11/05/2028 31/12/2025 0.98 Class B - Tranche 3 Christian Easterday 10/05/2023 69,063 11/05/2028 31/12/2025 0.83 Class C - 1st 50% Christian Easterday 10/05/2023 103,594 11/05/2028 10/05/2026 0.47 Class C - 2nd 50% Christian Easterday 10/05/2023 103,593 11/05/2028 10/05/2026 0.47 Class D - 1st Milestone Christian Easterday 10/05/2023 165,750 11/05/2028 31/12/2025 0.98 Class D - 2nd Milestone Christian Easterday 10/05/2023 165,750 11/05/2028 31/12/2025 0.98 LTI PR6 - Tranche 1A Christian Easterday 27/11/2025 56,565 30/04/2031 31/12/2027 0.72 LTI PR6 - Tranche 1B Christian Easterday 27/11/2025 56,565 30/04/2031 31/12/2027 0.58 LTI PR6 - Tranche 1C Christian Easterday 27/11/2025 90,504 30/04/2031 31/12/2027 0.90 LTI PR6 - Tranche 1D Christian Easterday 27/11/2025 22,626 30/04/2031 31/12/2027 0.90 LTI PR7 - Tranche 2A Christian Easterday 27/11/2025 56,565 30/04/2031 31/12/2028 0.78 LTI PR7 - Tranche 2B Christian Easterday 27/11/2025 56,565 30/04/2031 31/12/2028 0.65 LTI PR7 - Tranche 2C Christian Easterday 27/11/2025 90,504 30/04/2031 31/12/2028 0.90 LTI PR7 - Tranche 2D Christian Easterday 27/11/2025 22,626 30/04/2031 31/12/2028 0.90 STI PR5 - Tranche 1 Christian Easterday 27/11/2025 311,106 30/04/2031 31/12/2026 0.90 Class A - Tranche 3 Grant King 10/05/2023 14,918 11/05/2028 31/12/2025 0.98 Class B - Tranche 3 Grant King 10/05/2023 37,29 4 11/05/2028 31/12/2025 0.83 Class C - 1st 50% Grant King 10/05/2023 55,941 11/05/2028 10/05/2026 0.47 Class C - 2nd 50% Grant King 10/05/2023 55,940 11/05/2028 10/05/2026 0.47 Class D - 1st Milestone Grant King 10/05/2023 89,505 11/05/2028 31/12/2025 0.98 Class D - 2nd Milestone Grant King 10/05/2023 89,505 11/05/2028 31/12/2025 0.98 LTI PR6 - Tranche 1A Grant King 1/05/2026 23,040 30/04/2031 31/12/2027 1.63 LTI PR6 - Tranche 1B Grant King 1/05/2026 23,040 30/04/2031 31/12/2027 1.50 LTI PR6 - Tranche 1C Grant King 1/05/2026 36,864 30/04/2031 31/12/2027 1.89 LTI PR6 - Tranche 1D Grant King 1/05/2026 9,216 30/04/2031 31/12/2027 1.89 LTI PR7 - Tranche 2A Grant King 1/05/2026 23,040 30/04/2031 31/12/2028 1.70 LTI PR7 - Tranche 2B Grant King 1/05/2026 23,040 30/04/2031 31/12/2028 1.55 LTI PR7 - Tranche 2C Grant King 1/05/2026 36,864 30/04/2031 31/12/2028 1.89 LTI PR7 - Tranche 2D Grant King 1/05/2026 9,216 30/04/2031 31/12/2028 1.89 STI PR5 - Tranche 1 Grant King 1/05/2026 122,881 30/04/2031 31/12/2026 1.89 Class A - Tranche 3 Jose Ignacio Silva 10/05/2023 16,106 11/05/2028 31/12/2025 0.98 Class B - Tranche 3 Jose Ignacio Silva 10/05/2023 40,265 11/05/2028 31/12/2025 0.83 Class C - 1st 50% Jose Ignacio Silva 10/05/2023 60,397 11/05/2028 10/05/2026 0.47 Class C - 2nd 50% Jose Ignacio Silva 10/05/2023 60,397 11/05/2028 10/05/2026 0.47 Class D - 1st Milestone Jose Ignacio Silva 10/05/2023 96,635 11/05/2028 31/12/2025 0.98 Class D - 2nd Milestone Jose Ignacio Silva 10/05/2023 96,635 11/05/2028 31/12/2025 0.98 LTI PR6 - Tranche 1A Jose Ignacio Silva 1/05/2026 24,482 30/04/2031 31/12/2027 1.63 LTI PR6 - Tranche 1B Jose Ignacio Silva 1/05/2026 24,482 30/04/2031 31/12/2027 1.50 LTI PR6 - Tranche 1C Jose Ignacio Silva 1/05/2026 39,172 30/04/2031 31/12/2027 1.89 LTI PR6 - Tranche 1D Jose Ignacio Silva 1/05/2026 9,793 30/04/2031 31/12/2027 1.89 LTI PR7 - Tranche 2A Jose Ignacio Silva 1/05/2026 24,482 30/04/2031 31/12/2028 1.70 LTI PR7 - Tranche 2B Jose Ignacio Silva 1/05/2026 24,482 30/04/2031 31/12/2028 1.55 LTI PR7 - Tranche 2C Jose Ignacio Silva 1/05/2026 39,172 30/04/2031 31/12/2028 1.89 LTI PR7 - Tranche 2D Jose Ignacio Silva 1/05/2026 9,793 30/04/2031 31/12/2028 1.89 STI PR5 - Tranche 1 Jose Ignacio Silva 1/05/2026 130,572 30/04/2031 31/12/2026 1.89 Performance rights granted carry no dividend or voting rights. 5 Directors’ R eport (Cont’d) 42 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 45
REMUNERATION REPORT (AUDITED) (CONT’D) 7. S ervice Contracts The Company has executive service, labour or other agreements with the following KMP: Term of Contract Notice Period Termination Entitlements Other Details Christian Easterday Mr Easterday receives an annual salary of $480,000, plus superannuation which was effective 1 January 2026. Mr Easterday is also entitled to receive committee fees of for any committee he sits on. Mr Easterday currently receives an additional $18,000 in committee fees, plus superannuation which was effective 1 January 2026. Mr Easterday’s remuneration is subject to annual review. After the initial term, the agreement continues until either Mr Easterday terminates by giving the Company 6 months’ notice, or the Company terminates by giving Mr Easterday 6 months’ notice or payment in lieu of notice up to an amount equivalent to 6 months’ remuneration. Upon termination of the agreement, Mr Easterday will be entitled to termination benefits in accordance with Part 2D.2 of the Corporations Act 2001. The termination benefits (including any amount of payment in lieu of notice) must not exceed the amount equal to one times the executive’s average annual base salary in the last 3 years of service with the Company, unless the benefit has first been approved by the Company’s shareholders in a general meeting. Post termination non- competition restraints up to a maximum of 12 months. José Ignacio Silva The Company, through one of its Chilean subsidiary entities, Sociedad Minera El Corazón Limitada, has a labour agreement with Mr José Ignacio Silva, as Country Manager for Chile and Chief Legal Counsel of the Company. Mr Silva currently receives an annual salary of $379,000 per annum, which was effective from 1 January 2026. Either party may give notice that the agreement will terminate with 1 months’ notice. Such agreement will continue until either Mr Silva terminates by giving the Company 1 months’ notice or the Company terminates by giving Mr Silva 1 months’ notice or payment in lieu of notice up to an amount equivalent to 1 months’ remuneration. Mr Silva is not subject to any post termination non- competition restraints. The Company may terminate the agreement summarily for any serious incidents or wrongdoing by Mr Silva. Grant King Mr King receives an annual salary of $343,000, plus superannuation which was effective from 1 January 2026. Either party may give notice that the agreement will terminate with 3 months’ notice. Such agreement will continue until either Mr King terminates by giving the Company 3 months’ notice or the Company terminates by giving Mr King 3 months’ notice or payment in lieu of notice up to an amount equivalent to 3 months’ remuneration. Mr King is subject to post termination non competition restraints up to a maximum of 6 months. The Company may terminate the agreement summarily for any serious incidents or wrongdoing by Mr King. David Bayona Mr Bayona commenced employment with Hot Chili Limited on 2 March 2026. Mr Bayona receives an annual s alary of $400,000 per annum, which was effective from 2 March 2026. Either party may give notice that the agreement will terminate with 3 months’ notice. Such agreement will continue until either Mr Bayona terminates by giving the Company 3 months’ notice or the Company terminates by giving Mr Bayona 3 months’ notice or payment in lieu of notice up to an amount equivalent to 3 months’ remuneration. Mr Bayona is subject to post termination non competition restraints up to a maximum of 6 months. The Company may terminate the agreement summarily for any serious incidents or wrongdoing by Mr Bayona. KMP have no entitlement to termination payments in the event of removal for misconduct. 5 Directors’ R eport (Cont’d) HOT CHILI Annual Report 2026 43
Page 46
Directors’ Report (cont’d) REMUNERATION REPORT (AUDITED) (CONT’D) 8. N on-Executive Directors Each of the non-executive Directors have signed letters of appointment. The key features of the respective appointments are (inclusive of board and committee fees (including superannuation)): At Reporting Date Stuart Mathews Roberto de Andraca Adriasola Mark Jamieson Fiona Van Maanen Term N/A N/A N/A N/A Remuneration A$15,680 per month A$6,250 per month - A$9,520 per month Termination B enefits Nil Nil Nil Nil 9. A dditional Information The earnings of the consolidated entity for the five years to 30 June 2026 are summarised below: 2026 A$ 2 025 A$ 2 024 A$ 2 023 A$ 2 022 A$ O ther income 443,349 483,670 265,191 170,795 2,520,701 Expenses (11,043,344) (12,073,874) (8,046,513) (5,594,579) (9,799,457) EBITDA (10,875,710) (11,839,794) (7,851,886) (5,416,529) (4,780,485) EBIT (11,006,558) (12,018,669) (8,008,133) (5,547,227) (4,870,519) Loss after income tax (10,599,995) (11,590,204) (7,781,322) (5,423,784) (7,278,756) The factors that are considered to affect total shareholders return (“TSR”) are summarised below: 2026 2025 2024 2023 2022 1 Share price at financial year end ($) 1.99 0.60 0.93 1.12 0.75 Basic earnings/(loss) per share (cents per share) (5.56) (7.35) (6.13) (4.37) (7.49) 1 U pdated to reflect post consolidation share price and basic earnings/(loss) per share amounts. 10. O ther Transactions with Directors, Other KMP and Their Related Parties There were no transactions that occurred with directors, other KMP and their related parties during the current financial year, other than the reimbursement of expenses. 11. A doption of Year Ended 30 June 2025 Remuneration Report At the Annual General Meeting held on 27 November 2025, shareholders adopted the 30 June 2025 Remuneration Report with a clear majority of 97.32% of votes cast. END OF REMUNERATION REPORT (AUDITED) This report is made in accordance with a resolution of the Board of Directors made pursuant to section 298(2)(a) of the Corporations Act 2001. Signed on behalf of the Board of Directors by: Christian Easterday Managing Director Dated this 29th day of September 2026 Perth, Western Australia 44 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 47
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation RSM Australia Partners Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 www.rsm.com.au AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of Hot Chili Limited for the year ended 30 June 2026, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) Any applicable code of professional conduct in relation to the audit. RSM AUSTRALIA Perth, WA AIK KONG TING Dated: 29 September 2026 Partner 6 A uditors’ Independence Declaration HOT CHILI Annual Report 2026 45
Page 48
7 Independent A uditors’ Report RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation RSM Australia Partners Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 www.rsm.com.au INDEPENDENT AUDITOR’S REPORT To the Members of Hot Chili Limited REPORT ON THE AUDIT OF THE FINANCIAL REPORT Opinion We have audited the financial report of Hot Chili Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 202 6, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors' declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group's financial position as at 30 June 2026 and of its financial performance for the year then ended; and (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of APES 110 Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional & Ethical Standards Board Limited (the Code) that are relevant to our audit of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. HOT CHILI Annual Report 2026 46 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 49
Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key Audit Matter How our audit addressed this matter Exploration and evaluation expenditure Refer to Note 11 in the financial statements The Group has capitalised exploration and evaluation expenditure with a carrying value of $262,466,188 as at 30 June 2026. We considered this to be a key audit matter due to the significant management judgment involved in assessing the carrying value in accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, including: • Determination of whether expenditure can be associated with finding specific mineral resources, and the basis on which that expenditure is allocated to an area of interest; • Assessing whether any indicators of impairment are present and if so, judgement applied to determine and quantify any impairment loss; and • Assessing whether exploration activities have reached a stage at which the existence of economically recoverable reserves may be determined. Our audit procedures included: • Assessing the Group’s accounting policy for compliance with Australian Accounting Standards; • Assessing whether the rights to tenure of those areas of interest are current; • Testing the option agreement payments are up to date; • Testing on a sample basis of additions to supporting documentation and checking the amounts capitalised during the year are in compliance with the Group’s accounting policy and relate to the area of interest; • Assessing and evaluating management’s assessment of whether indicators of impairment existed at the reporting date; • Enquiring with management and reading budgets and other documentation as evidence that active and significant operations in, or relation to, the area of interest will be continued in the future; • Assessing management’s determination that exploration activities have not yet progressed to the stage where the existence or otherwise of economically recoverable reserves may be determined; and • Assessing the appropriateness of the disclosures in the financial statements. 7 Independent Auditors’ Report (Cont’d) HOT CHILI Annual Report 2026 47 HOT CHILI Annual Report 2026
Page 50
7 Independent Auditors’ Report (Cont’d) Key Audit Matter How our audit addressed this matter Share-based Payment Refer to Notes 23 in the financial statements During the year, the Group issued performance and service rights to employees and consultants. Management has accounted for these instruments in accordance with AASB 2 Share-Based Payment. We considered this to be a key audit matter due to: • The complexity of the accounting associated with recording these instruments and management estimation in determining the fair value of instruments granted; • Management judgement is required to determine the probability of vesting conditions of these instruments and the inputs used in the valuation model to value these instruments; and • The recognition of the share - based payment expense is complex due to the variety of vesting conditions attached to these instruments. Our audit procedures included: • Assessing the Group’s accounting policy for compliance with Australian Accounting Standards; • Obtaining an understanding of the terms and conditions of these instruments granted; • Assessing the completeness of the instruments granted/expired/lapsed at reporting date; • Assessing the appropriateness of management’s valuation methodology used to determine the fair value of these instruments granted; • Testing the key inputs used in the valuation model for each instrument granted; • Critically assessing management’s determination of the vesting probability of each instrument; • Recalculating the share-based payment expenses recognised during the year in relation to those instruments granted; and • Assessing the appropriateness of the disclosures in the financial statements. Other Information The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2026 but does not include the financial report and the auditor's report thereon. Our opinion on the financial report does not cover the other information and accordingly, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of: a. the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and b. the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001, and 48 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 51
for such internal control as the directors determine is necessary to enable the preparation of: i. the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ii. the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/media/bwvjcgre/ar1_2024.pdf. This description forms part of our auditor's report. REPORT ON THE REMUNERATION REPORT Opinion on the Remuneration Report We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2026. In our opinion, the Remuneration Report of Hot Chili Limited , for the year ended 30 June 2026 , complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. RSM AUSTRALIA Perth, WA AIK KONG TING Dated: 29 September 2026 Partner 7 Independent Auditors’ Report (Cont’d) HOT CHILI Annual Report 2026 49
Page 52
8 Directors’ D eclaration In the opinion of the Directors: a) t he attached financial statements and notes thereto comply with the Corporations Act 2001 , the Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; b) t he attached financial statements and notes thereto comply with the International Financial Reporting Standards as issued by the International Accounting Standards Board as described in Note 1 to the financial statements; c) t he attached financial statements and notes thereto give a true and fair view of the consolidated entity’s financial position as at 30 June 2026 and of its performance for the financial year ended on that date; d) t here are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and e) t he information disclosed in the attached consolidated entity disclosure statement is true and correct. The directors have been given the declarations required by section 295A of the Corporations Act 2001 . This declaration is made in accordance with a resolution of the Board of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001. Signed on behalf of the Board of Directors by: Christian Easterday Managing Director Dated this 29th day of September 2026 Perth, Western Australia HOT CHILI Annual Report 2026 50 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 53
9 S tatement of Profit or Loss and Other Comprehensive Income Consolidated Entity 2026 2025 Note $ $ Interest income 4 443,349 483,670 Total Income 443,349 483,670 D epreciation (130,848) (178,875) Corporate fees (498,990) (376,430) Legal and professional (1,540,372) (1,835,383) Employee benefits expense (3,057,898) (2,313,488) Administration expenses (1,746,255) (1,502,972) Accounting fees (87,508) (137,523) Other expenses 5 (1,961,735) (1,406,173) Tenement write off - (3,111,349) Foreign exchange loss (159,287) (11,070) Share-based payments expense 23 (1,823,665) (1,145,406) Finance costs (36,786) (55,205) Total Expenses (11,043,344) (12,073,874) Loss before income tax (10,599,995) (11,590,204) Income tax expense 6 - - Loss After Income Tax (10,599,995) (11,590,204) Other comprehensive income - - Total Comprehensive Loss (10,599,995) (11,590,204) Loss Attributable To: Non-controlling interests (488,331) (452,657) Owners of Hot Chili Limited (10,111,664) (11,137,547) (10,599,995) (11,590,204) Basic and diluted loss per share (cents) attributable to the owners of Hot Chili Limited 7 (5.56) (7.35) The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. FOR THE YEAR ENDED 30 JUNE 2026 HOT CHILI Annual Report 2026 51 HOT CHILI Annual Report 2026
Page 54
Consolidated Entity 2026 2025 Note $ $ Current Assets Cash and cash equivalents 8 24,947,836 5,189,090 Other current assets 13 1,979,111 3,018,313 Total Current Assets 26,926,947 8,207,403 Non-Current Assets Plant and equipment 10 324,200 188,593 Exploration and evaluation expenditure 11 262,466,188 235,822,617 Right-of-use assets 12 379,703 345,547 Other non-current assets 13 237,925 240,389 Total Non-Current Assets 263,408,016 236,597,146 Total Assets 290,334,963 244,804,549 Current Liabilities Trade and other payables 14 6,823,251 4,391,338 Provisions 15 447,856 313,778 Lease liabilities 16 141,076 133,239 Total Current Liabilities 7,412,183 4,838,355 Non-Current Liabilities Provisions 15 67,356 48,581 Lease liabilities 16 287,046 282,060 Total Non-Current Liabilities 354,402 330,641 Total Liabilities 7,766,585 5,168,996 Net Assets 282,568,378 239,635,553 Equity Contributed equity 19 347,247,758 297,649,862 Share-based payments reserve 20(a) 7,725,679 5,082,893 Foreign currency translation reserve 20(b) 1,222 1,222 Accumulated losses 21 (95,060,895) (84,949,231) Capital and Reserves Attributable to Owners of Hot Chili Limited 259,913,764 217,784,746 Non-controlling interests 22 22,654,614 21,850,807 Total Equity 282,568,378 239,635,553 The above Statement of Financial Position should be read in conjunction with the accompanying notes. 10 Statement of Financial Position AS AT 30 JUNE 2026 HOT CHILI Annual Report 2026 52 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 55
11 Statement of Changes in Equity Consolidated Entity Contributed Equity Share-Based Payments Reserve Foreign Currency Translation Reserve Accumulated Losses Non- Controlling Interest (“NCI”) T otal Equity $ $ $ $ $ $ Balance at 1 July 2025 297,649,862 5,082,893 1,222 (84,949,231) 21,850,807 239,635,553 Loss for the year - - - (10,111,664) (488,331) (10,599,995) Total Comprehensive Income for the Year - - - (10,111,664) (488,331) (10,599,995) Options expired during the period Sh ares issued 53,901,012 - - - - 53,901,012 Share issue costs (4,483,116) 999,121 - - - (3,483,995) Share-based payments 180,000 1,643,665 - - - 1,823,665 NCI contribution 1 - - - - 1,292,138 1,292,138 Balance at 30 June 2026 347,247,758 7,725,679 1,222 (95,060,895) 22,654,614 282,568,378 Balance at 1 July 2024 297,651,726 6,445,699 1,222 (76,319,896) 19,648,425 247,427,176 Loss for the year - - - (11,137,547) (452,657) (11,590,204) Total Comprehensive Income for the Year - - - (11,137,547) (452,657) (11,590,204) Options expired during the period - (2,508,212) - 2,508,212 - - Share issue costs (1,864) - - - - (1,864) Share-based payments - 1,145,406 - - - 1,145,406 NCI contribution 1 - - - - 2,655,039 2,655,039 Balance at 30 June 2025 297,649,862 5,082,893 1,222 (84,949,231) 21,850,807 239,635,553 1 T he above NCI contributions were made by Compañía Minera del Pacífico S.A. (“CMP”) to maintain its interest of 20% in Sociedad Minera El Águila SpA and Aguas para El Huasco SpA. The above Statement of Changes in Equity should be read in conjunction with the accompanying notes. FOR THE YEAR ENDED 30 JUNE 2026 HOT CHILI Annual Report 2026 53 HOT CHILI Annual Report 2026
Page 56
Consolidated Entity Note 2026 $ 2025 $ Cash Flows from Operating Activities Payments to suppliers and employees (8,708,273) (7,504,263) Interest received 336,441 529,876 Interest paid (204) (6) Net Cash Used in Operating Activities 9 (8,372,036) (6,974,393) Cash Flows from Investing Activities Payments for plant and equipment 10 (198,471) (76,220) Payments for tenements 11 (4,234,444) (3,835,382) Payments for exploration and evaluation (18,818,811) (20,082,150) Reimbursement from CMP during the year 1,292,138 2,655,039 Net Cash used in Investing Activities (21,959,588) (21,338,713) Cash Flows from Financing Activities Proceeds from issue of shares 53,901,012 - Share issue costs (3,483,995) - Repayment of lease liabilities (176,912) (194,502) Net Cash Provided by / (used in) Financing Activities 50,240,105 (194,502) Net increase / (decrease) in cash held 19,908,481 (28,507,608) Cash and cash equivalents at the beginning of the year 5,189,090 33,741,518 Foreign exchange differences on cash (149,735) (44,820) Cash and Cash Equivalents at the End of the Year 8 24,947,836 5,189,090 The above Statement of Cash Flows should be read in conjunction with the accompanying notes. 12 Statement of Cash Flows FOR THE YEAR ENDED 30 JUNE 2026 HOT CHILI Annual Report 2026 54 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 57
13 N otes to the Financial Statements 1. M ATERIAL ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (a) N ew, Revised or Amended Accounting Standards and Interpretations Adopted The consolidated entity has adopted all of the new, revised or amended accounting standards, interpretations and other accounting pronouncements issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting period. A ny new, revised or amending accounting standards, interpretations and other accounting pronouncements that are not yet mandatory have not been early adopted. ( b) A ccounting Standards and Interpretations Issued But Not Yet Effective Australian Accounting Standards and Interpretations that have recently been issued or amended are not yet mandatory, and have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2026. The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2026. The consolidated entity’s assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below. AASB 18 Presentation and Disclosure in Financial Statements This standard is applicable to annual reporting periods beginning on or after 1 January 2027 and early adoption is permitted. The standard replaces IAS 1 ‘Presentation of Financial Statements’, with many of the original disclosure requirements retained and there will be no impact on the recognition and measurement of items in the financial statements. But the standard will affect presentation and disclosure in the financial statements, including introducing five categories in the statement of profit or loss and other comprehensive income: operating, investing, financing, income taxes and discontinued operations. The standard introduces two mandatory sub-totals in the statement: ‘Operating profit’ and ‘Profit before financing and income taxes’. There are also new disclosure requirements for ‘management-defined performance measures’, such as earnings before interest, taxes, depreciation and amortisation (‘EBITDA’) or ‘adjusted profit’. The standard provides enhanced guidance on grouping of information (aggregation and disaggregation), including whether to present this information in the primary financial statements or in the notes. The consolidated entity will adopt this standard from 1 July 2027 and it is expected that there will be a significant change to the layout of the statement of profit or loss and other comprehensive income. (c) F inancial report prepared on a going concern basis The consolidated financial statements have been prepared on the going concern basis of accounting, which assumes the continuity of normal business activities and the realisation of a ssets and settlement of liabilities in the ordinary course of business. ( d) B asis of Preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”). The financial report was authorised for issue on 29 September 2026 by the Board of Directors. The functional and presentation currency of Hot Chili Limited is Australian Dollars. Critical Accounting Estimates The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 2. Historical Cost Convention These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets. (e) R ounding of Amounts The company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2026/183, issued by the Australian Securities and Investments Commission. Therefore, the amounts in this report have been rounded to the nearest dollar in accordance with that Corporations Instrument, unless otherwise stated. (f) P arent Entity Information In accordance with the Corporations Act 2001 , these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in Note 26. FOR THE YEAR ENDED 30 JUNE 2026 HOT CHILI Annual Report 2026 55 HOT CHILI Annual Report 2026
Page 58
1. M ATERIAL ACCOUNTING POLICIES (CONT’D) (g) P rinciples of Consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Hot Chili Limited (“parent entity”) as at 30 June 2026 and the results of all subsidiaries for the year then ended. Hot Chili Limited and its subsidiaries together are referred to in these financial statements as the “consolidated entity”. Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity. Non-controlling interests in the results and equity of the consolidated entity is shown separately in the c onsolidated statement of profit or loss and other comprehensive income and the consolidated statement of financial position respectively. W here control of an entity is obtained during a financial year, its results are included in the consolidated statement of profit and loss and comprehensive income from the date on which control commences. Where control ceases, de-consolidation occurs from that date. Investments in associates are accounted for in the consolidated financial statements using the equity method. Under this method, the consolidated entity’s share of the post-acquisition profits or losses of associates is recognised in the consolidated statement of comprehensive income, and its share of post-acquisition movements in reserves is recognised in consolidated reserves. The cumulative post- acquisition movements are adjusted against the cost of the investment. Associates are those entities over which the consolidated entity exercises significant influence, but not control. Investments in subsidiaries are recognised at cost less impairment losses. (h) S egment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating d ecision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. (i) Fo reign Currency Translation The financial statements are presented in Australian dollars, which is Hot Chili Limited’s functional and p resentation currency. Foreign Currency Transactions Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign Operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of. (j) G oods and Services Tax (“GST”) and Other Similar Taxes Revenues, expenses and assets are recognised net of the amount of associated GST (or “VAT”, as it is referred to in some jurisdictions), unless the GST incurred is not recoverable from the taxation. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated as inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority. ( k) R evenue Recognition Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and amounts collected on behalf of third parties. Revenue is recognised for major business activities as follows: Interest Income Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. Other Services Other debtors are recognised at the amount receivable and are due for settlement within 30 days from the end of the month in which services were provided. 13 N otes to the Financial Statements(cont’d) FOR THE YEAR ENDED 30 JUNE 2026 HOT CHILI Annual Report 2026 56 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 59
13 N otes to the Financial Statements(cont’d) FOR THE YEAR ENDED 30 JUNE 2026 1. M ATERIAL ACCOUNTING POLICIES (CONT’D) (l) F inance Costs Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred, including interest on short-term and long-term borrowings. (m) I ncome Tax The consolidated entity adopts the liability method of tax-effect accounting whereby the income tax expense i s based on the profit adjusted for any non-assessable or disallowed items. Deferred tax is accounted for using the statement of balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. Hot Chili Limited and its wholly owned Chilean subsidiaries have not formed an income tax consolidated group under the Australian Tax Consolidation Regime. (n) C urrent and Non-Current Classification Assets and liabilities are presented in the statement of financial position based on current and non-current classification. An asset is current when it is expected to be realised or intended to be sold or consumed in normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within twelve months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. A liability is current when it is expected to be settled in normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within twelve months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current. D eferred tax assets and liabilities are always classified as non-current. (o) F air Value Measurement When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement. For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data. (p) I mpairment of Assets Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). (q) Ca sh and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. (r) O ther Receivables Other receivables are recognised at amortised cost, less any allowance for expected credit losses. HOT CHILI Annual Report 2026 57 HOT CHILI Annual Report 2026
Page 60
1. M ATERIAL ACCOUNTING POLICIES (CONT’D) (s) P lant and Equipment Plant and Equipment Plant and equipment are measured on the cost basis less depreciation and impairment losses. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets’ employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining r ecoverable amounts. Depreciation The depreciable amount of all plant and equipment is depreciated on a diminishing value over their useful lives to the consolidated entity commencing from the time the asset is held ready for use. T he depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Plant and Equipment 10% – 33% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. (t) E xploration and Evaluation Expenditure Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred thereon is written off in the year in which the decision is made. (u) R ight-of-Use Assets A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities. T he consolidated entity has elected not to recognise a right- of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. (v) L ease Liabilities A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity’s incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they a re incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down. (w) T rade and Other Payables These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid, together with assets ordered before the end of the financial year. The amounts are unsecured and are usually paid within 30 days of recognition. 13 N otes to the Financial Statements(cont’d) FOR THE YEAR ENDED 30 JUNE 2026 HOT CHILI Annual Report 2026 58 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 61
13 N otes to the Financial Statements(cont’d) FOR THE YEAR ENDED 30 JUNE 2026 1. M ATERIAL ACCOUNTING POLICIES (CONT’D) (x) P rovisions Provisions are recognised when the consolidated entity has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. (y) I ssued Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. ( z) S hare-Based Payments Equity-based compensation benefits can be provided to directors and executives. The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using any of the Hoadley Employee Stock Option, Hoadley Employee Stock Option 2 (“Hoadley ESO2”), Hoadley Parisian Barrier, Hybrid Barrier Up and In Trinomial, or Black-Scholes option pricing models that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option or right, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Hoadley Employee Stock Option, Hoadley ESO2, Hoadley Parisian Barrier, Hybrid Barrier Up and In Trinomial, or Black- Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows: (i) d uring the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period. (ii) f rom the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date. All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability. (aa) E arnings per Share Basic Earnings per Share Basic earnings per share is determined by dividing the profit attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. Diluted Earnings per Share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. HOT CHILI Annual Report 2026 59 HOT CHILI Annual Report 2026
Page 62
13 N otes to the Financial Statements(Cont’d) 2. CR ITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events; management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. (a) E xploration and Evaluation Costs Exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which this determination is made. (b) S hare-Based Payment Transactions The consolidated entity measures the cost of equity-settled transactions with directors, employees and key consultants by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Hoadley Employee Stock Option, Hoadley ESO2, Hoadley Parisian Barrier, Hybrid Barrier Up and In Trinomial, or Black-Scholes option pricing models taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. FOR THE YEAR ENDED 30 JUNE 2026 60 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 63
13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 3. S EGMENT INFORMATION The Company’s operations are in one reportable business segment, being the exploration for Copper. The Company operates in one geographical segment, being Chile. The operating segment information is the same information as provided throughout the consolidated financial statements and therefore not duplicated. The information reported to the CODM is on at least a monthly basis. Consolidated Entity 2026 2025 $ $ 4. IN TEREST INCOME Interest earnt on bank deposits 443,349 483,670 443,349 483,670 5. O THER EXPENSES Marketing and business development expenses 1,584,303 1,255,228 Travel costs 358,119 99,955 Community development costs 15,106 2,520 Huasco Water direct costs 4,207 48,470 1,961,735 1,406,173 6. I NCOME TAX EXPENSE (a) R econciliation of Income Tax Expense to Prima Facie Tax Payable Loss before income tax (10,599,995) (11,590,204) Prima facie income tax at 25% (2025: 25%) (2,649,999) (2,897,551) Tax-effect of amounts not deductible in calculating taxable income 881,883 760,082 Tax loss not recognised 1,768,116 2,137,469 Income Tax Expense - - ( b) T ax Losses: Unused tax losses for which no deferred tax asset has been recognised 49,251,036 44,415,076 Potential tax benefit at 25% (2025: 25%) 12,312,759 11,103,769 As shown above, the directors’ estimate that the potential deferred tax asset at 30 June 2026 in respect of tax losses not brought to account is $12,312,759 (2025: $11,103,769). In addition, Chilean subsidiaries of Hot Chili Limited also have tax losses that are a potential deferred tax asset of $37,676,272 (2025: $37,062,757). The benefit for tax losses will only be obtained if: (i) T he consolidated entity and the subsidiaries derive income, sufficient to absorb tax losses; and (ii) T here is no change to legislation to adversely affect the consolidated entity and its subsidiaries in realising the benefit from the deduction of the losses. HOT CHILI Annual Report 2026 61
Page 64
13 N otes to the Financial Statements(Cont’d) Consolidated Entity 2026 2025 $ $ 7. L OSS PER SHARE Loss after tax attributable to the owners of Hot Chili Limited (10,111,664) (11,137,547) The weighted average number of ordinary shares on issue used in the calculation of basic loss per share 182,009,397 151,465,213 W eighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted loss per share (i) 182,009,397 151,465,213 Basic Loss Per Share (Cents) (5.56) (7.35) Diluted Loss Per Share (Cents) (i) (5.56) (7.35) (i) U nexercised options are not dilutive. 8. C ASH AND CASH EQUIVALENTS Cash at bank 8,840,526 5,189,090 Short-term deposits 16,107,310 - Total Cash and Cash Equivalents 24,947,836 5,189,090 Reconciliation to cash and cash equivalents: The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the statement of cash flows as follows: Cash and Cash Equivalents 24,947,836 5,189,090 9. N OTES TO STATEMENT OF CASH FLOWS (a) R econciliation of Net Cash Used in Operating Activities Loss for the year (10,599,995) (11,590,204) Adjustments for: Depreciation 130,848 178,875 Tenement write off - 3,111,349 Foreign exchange loss 159,287 11,070 Exploration and evaluation expensed 4,207 48,470 Community development costs recognised as investing activities 15,106 2,520 Share-based payments 1,823,665 1,145,406 Finance costs on lease liabilities 36,582 55,199 Net cash flows from operating activities before change in assets and liabilities (8,430,300) (7,037,315) Change in assets and liabilities during the financial year (i): O ther current assets (265,829) (39,983) Trade and other payables 171,240 32,665 Provisions 152,853 70,240 Net Cash Outflow from Operating Activities (8,372,036) (6,974,393) (i) A s related to operating activities. FOR THE YEAR ENDED 30 JUNE 2026 62 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 65
13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 9. N OTES TO STATEMENT OF CASH FLOWS (CONT’D) (b) N on-Cash Investing and Financing Activities 2026 During the current year there were non-cash investing and financing activities of $999,121 due to options issued to brokers. 2 025 There were no non-cash investing and financing activities during the previous year. Consolidated Entity 2026 2025 $ $ 10. P LANT AND EQUIPMENT Plant and equipment at cost 1,396,666 1,198,195 Less: Accumulated depreciation (1,072,466) (1,009,602) Total Plant and Equipment 324,200 188,593 Reconciliation: Carrying amount at the beginning of the year 188,593 162,654 Additions 198,471 76,220 Depreciation expensed (11,851) (15,732) Depreciation capitalised into exploration costs (51,013) (34,549) Carrying Amount at the End of the Year 324,200 188,593 11. E XPLORATION AND EVALUATION EXPENDITURE Carrying amount at the beginning of the year 235,822,617 215,831,609 Tenement write off (iii) - (3,111,349) Transfer to VAT receivable - (3,147,705) Consideration given for mineral exploration acquisition 4,234,444 3,835,382 Capitalised mineral exploration and evaluation (i) 22,409,127 22,414,680 Carrying Amount at the End of the Year (ii) 262,466,188 235,822,617 (i) Capitalised mineral exploration and evaluation is net of reimbursements of VAT recovered following approval for VAT refunds from the Chilean Tax Authorities. (ii) Management have determined that the capitalised expenditure relating to the projects in Chile are still in the exploration phase and are to be classified as exploration and evaluation expenditure. In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, management have assessed whether there are any indicators of impairment on the capitalised expenditure as at balance date. In making this assessment management have considered whether sufficient data exists to conclude that the exploration and evaluation assets are unlikely to be recovered in full from successful development or sale. Based on this assessment, management are satisfied that there are no impairment indicators as at balance date. T he future realisation of these non-current assets is dependent on further exploration and funding necessary to commercialise the resources or realisation through sale. (iii) Marsellesa, Antofagasta Minerals S.A. (AMSA), and Cometa option agreements have been terminated due to unsuccessful exploration assessments by the Company. These terminations are not considered material to the exploration program. HOT CHILI Annual Report 2026 63
Page 66
13 N otes to the Financial Statements(Cont’d) Consolidated Entity 2026 2025 $ $ 12. R IGHT-OF-USE ASSET Right-of-use assets at cost 984,647 831,495 Less: Accumulated depreciation (604,944) (485,948) 379,703 345,547 Reconciliation of Right-of-Use Assets Opening balance 345,547 508,689 Additions (i) 153,153 - Amortisation (118,997) (163,142) Closing balance 379,703 345,547 (i) Effective on 1 June 2024, the Chilean entities entered into a lease agreement for their new Chilean office premises at Los Condes, Santiago, Republic of Chile. This lease has a fixed term of 3 years, with the option to renew for a further 3 years. O n the 25 May 2026, an additional lease was taken over a further floor at the same premises for a fixed term of 2 years. B oth leases are denominated in “Unidad de Fomento”, or “Development Units”, which is a Chilean inflation-indexed unit of account. (ii) D uring the year, the Company continued its leases of premises at 768 Canning Highway, Applecross, Western Australia. The leases for the ground and first floors previously expired and have been extended on a periodic basis. Consolidated Entity 2026 2025 $ $ 13. O THER ASSETS Current Prepayments 472,423 313,502 VAT receivable 1,249,185 2,547,126 Other receivables 257,503 157,685 Total Other Current Assets 1,979,111 3,018,313 Non-Current Term deposits and bonds 237,925 240,389 Total Other Non-Current Assets 237,925 240,389 Total Other Assets 2,217,036 3,258,702 FOR THE YEAR ENDED 30 JUNE 2026 64 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 67
13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 Consolidated Entity 2026 2025 $ $ 14. T RADE AND OTHER PAYABLES Trade payables and accruals 6,823,251 4,391,338 6,823,251 4,391,338 15. P ROVISIONS Current Annual leave 326,804 220,749 Long service leave 121,052 93,029 Total Current Provisions 447,856 313,778 Non-Current Long service leave 67,356 48,581 Total Non-Current Provisions 67,356 48,581 Total Provisions 515,212 362,359 16. LE ASE LIABILITIES Current 141,076 133,239 Non-current 287,046 282,060 Total Lease Liabilities 428,122 415,299 Maturity Analysis: Year 1 168,970 170,192 Year 2 155,480 88,412 Year 3 88,033 88,412 Year 4 80,698 88,412 Year 5 - 81,045 493,181 516,473 Less: Interest portion of lease liabilities (65,059) (101,174) Closing Balance 428,122 415,299 The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the Group’s treasury function. Refer to Note 12 for further details of the Group’s leases. HOT CHILI Annual Report 2026 65
Page 68
13 N otes to the Financial Statements(Cont’d) Consolidated Entity 2026 2025 $ $ 17. CO MMITMENTS FOR EXPENDITURE (a) E xploration Commitments In order to maintain current rights of tenure to exploration and mining tenements, the consolidated entity has the following discretionary exploration expenditure requirements up until the expiry of leases. These obligations are not provided for in the financial statements and are payable as follows: Within one year 363,954 381,679 Later than one year but not later than five years 1,455,816 1,526,718 More than five years 4,003,494 4,580,153 5,823,264 6,488,550 (b) O ption Payment Commitments The mining rights (which vary between 90% to 100%) of the various projects undertaken by Hot Chili will be transferred upon satisfaction of the option payments committed as at year end as tabled below: Within one year 4,804,193 3,099,237 Later than one year but not later than five years 20,628,913 26,366,412 More than five years - - 25,433,106 29,465,649 18. CO NTINGENT LIABILITIES (a) V AT Payments At year-end, Hot Chili Limited had accumulated: . VAT refund payments of $19,581,638 (2025: $16,586,083) with respect to VAT recovered at year end by Sociedad Minera El Águila SpA (refer to the table below); and . VAT refund payments of $12,312,019 (2025: $10,990,802) with respect to VAT recovered at year-end by Sociedad Minera La Frontera SpA (refer to the table below). 2026 2025 $ $ VAT recovered by Sociedad Minera El Águila SpA (CLP 12,406,051,392; 2025: CLP 10,140,567,058) 19,581,638 16,586,083 V AT recovered by Sociedad Minera La Frontera SpA (CLP 7,800,345,143; 2025: CLP 6,719,667,817) 12,312,019 10,990,802 T otal VAT Recovered by the Group (CLP 20,206,396,535; 2025: CLP16,860,234,875) 31,893,657 27,576,885 U nder the initial terms of the VAT refund payment, the consolidated entity initially had until 31 December 2019 to commercialise production from Productora and meet certain export targets, having the right to extend this term. The Company exercised its right to extend the deadline to meet the committed amount of exports with the Ministry of Economy. Sociedad Minera El Aguila SpA obtained extensions until 30 June 2022, until 30 June 2026 and recently until 30 June 2033. Sociedad Minera La Frontera SpA’s extension ends on 31 December 2026 for exports related to the Cortadera deposit. However, a new extension will be required in the following months. In the event that the term is not extended further and the Company does not meet certain export targets, the Company will be required to re-pay the VAT refund payments to the Chilean Tax Authority subject to certain terms and conditions. However, if Hot Chili achieves the export targets within that timeframe or its renewal, if required, any VAT refund payments will not be required to be repaid. FOR THE YEAR ENDED 30 JUNE 2026 66 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 69
13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 18. CO NTINGENT LIABILITIES CONT’D) (b) F uture Royalty Payments In July 2023, the Company closed an Investment Agreement with Osisko Gold Royalties Ltd (Osisko). Under the terms of the Investment Agreement Osisko purchased a net smelter return royalty comprising 1% of payable copper production and 3% of gold payable production. Hot Chili retains a buyback right if a change of control event occurs prior to the 4th anniversary of closing under the terms and conditions of the announcement dated 28 June 2023. On 7 July 2026, Hot Chili announced the execution of a binding Amended and Restated Investment Agreement (A&R Investment Agreement) with OR Royalties Inc (formerly Osisko) pursuant to which the Company has agreed to grant to OR a Net Smelter Return royalty on the Company’s La Verde Project. The A&R Investment Agreement brings total royalty consideration under the OR royalty arrangement to US$30 million with Hot Chili to receive US$15 million at closing of the transactions contemplated by the A&R Investment Agreement. 19. CO NTRIBUTED EQUITY Consolidated Entity 2026 2025 No. Shares $ No. Shares $ (a) S hare Capital Ordinary shares – fully paid 202,686,033 347,247,758 151,606,305 297,649,862 (b) M ovement in Ordinary Share Capital Balance at the beginning of the period 151,606,305 297,649,862 151,345,206 297,651,726 Shares issued under Private Placement to institutional & professional investors (i) 13,209,698 21,796,002 - - Shares issued under Private Placement to institutional & professional investors (ii) 11,032,727 17,916,013 Shares issued under Private Placement to institutional & professional investors (iii) 23,648,329 14,188,997 - - Shares issued to director for onboarding (iv) 200,000 180,000 - - Shares issued to employees under Employee Share Scheme (v) 2,988,974 - 261,099 - Less: Costs associated with issue of share capital - (4,483,116) - (1,864) Balance at the End of the Period 202,686,033 347,247,758 151,606,305 297,649,862 (i) I ssued at $1.65 per share. (ii) I ssued at CAD$1.56 per share. (iii) Issued at $0.60 per share. (iv) 200,000 fully paid ordinary shares were issued for onboarding of Chairman Mr Stuart Mathews at $0.90 per share, approved at the AGM on 27 November 2025. (v) 2,988,974 Service & Performance rights exercised at nil per share. (c) T erms and Conditions of Contributed Equity Ordinary Shares Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. HOT CHILI Annual Report 2026 67
Page 70
13 N otes to the Financial Statements(Cont’d) 19. CO NTRIBUTED EQUITY (CONT’D) (d) U nlisted Options Over Ordinary Share Capital Issue Date E xpiry Date E xercise Price B alance at Start of Year N o. Issued No. E xercised No. E xpired No. B alance at End of Year No. E xercisable at End of Year No. 2 5 Jul 2024(i) 25 Jul 2026 A$1.50 1,914,000 - - - 1,914,000 1,914,000 12 Feb 2026(ii) 12 Aug 2028 A$2.145 - 1,212,121 - - 1,212,121 1,212,121 1,914,000 1,212,121 - - 3,126,121 3,126,121 (i) A pproved at the General Meeting of Shareholders on 4 July 2024. (ii) Non-transferable and unlisted options in the Company issued to Agents acting as lead managers in the placement of shares. Weighted average exercise price of options on issue is $1.75 (2025: $1.50). The weighted average remaining contractual life of options outstanding at the end of the financial year was 0.86 years (2025: 1.07 years). (e) S ervice Rights Grant Date L ast Vesting Day E xpiry Date (i) Balance at Start of Year No. I ssued (ii) No. E xercised No. E xpired/ Lapsed No. B alance at End of Year No. E xercisable at End of Year(iii) No. 1 0 May 2023 31 Dec 2023 12 May 2028 811,549 - (782,549) - 29,000 29,000 10 May 2023 31 Dec 2024 12 May 2028 803,263 - (774,263) - 29,000 29,000 10 May 2023 31 Dec 2025 12 May 2028 747,572 - (472,830) - 274,742 274,742 21 Aug 2023 31 Dec 2023 22 Aug 2028 106,672 - (53,336) - 53,336 53,336 21 Aug 2023 31 Dec 2024 22 Aug 2028 115,006 - (61,670) - 53,336 53,336 21 Aug 2023 31 Dec 2025 22 Aug 2028 114,988 - (53,328) - 61,660 61,660 24 Sep 2024 31 Dec 2024 6 Jan 2030 105,300 - (105,300) - - - 24 Sep 2024 31 Dec 2025 6 Jan 2030 210,600 - (210,600) - - - 13 Dec 2024 31 Dec 2024 6 Jan 2030 1,806 - - - 1,806 1,806 13 Dec 2024 31 Dec 2025 6 Jan 2030 27,0 82 - (16,250) - 10,832 10,832 19 Dec 2025 31 Dec 2025 19 Dec 30 - 100,147 - - 100,147 100,147 3,043,838 100,147 (2,530,126) - 613,859 613,859 (i) Later expiry dates apply if service rights have vested on or before the last vesting day. (ii) D uring the year, 100,147 service rights were issued to the Company’s employees. Refer to Note 23(a)(ii) for details of the fair value of the service rights granted. (iii) Denotes service rights exercisable as a result of vesting conditions being met during the year. (iv) During the year, $328,837 (2025: $892,470) was expensed in relation to the vesting of service rights (see Note 23). FOR THE YEAR ENDED 30 JUNE 2026 68 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 71
13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 19. CO NTRIBUTED EQUITY (CONT’D) (f) P erformance Rights Grant Date L ast Vesting Day E xpiry Date (i) Balance at Start of Year No. I ssued (ii) No. E xercised No. E xpired/ Lapsed (iii) No. B alance at End of Year No. E xercisable at End of Year(iv) No. 1 0 May 2023 31 Dec 2023 12 May 2028 273,889 - (273,889) - - - 10 May 2023 31 Dec 2024 12 May 2028 71,857 - (71,857) - - - 10 May 2023 31 Dec 2025 12 May 2028 1,113,786 - (47, 28 4) (1,041,929) 24,574 24,574 10 May 2023 10 May 2026 12 May 2028 538,928 - - (538,928) - - 21 Aug 2023 31 Dec 2023 22 Aug 2028 37,328 - (18,664) - 18,664 18,664 21 Aug 2023 31 Dec 2024 22 Aug 2028 11,497 - (6,165) - 5,332 5,332 21 Aug 2023 31 Dec 2025 22 Aug 2028 178,262 - (5,336) (166,756) 6,170 6,170 21 Aug 2023 21 Aug 2026 22 Aug 2028 86,250 - - (86,250) - - 24 Sep 2024 31 Dec 2024 6 Jan 2030 10,530 - (10,530) - - - 24 Sep 2024 31 Dec 2025 6 Jan 2030 200,070 - (21,060) (179,010) - - 24 Sep 2024 21 Aug 2026 6 Jan 2030 78,974 - - (78,974) - - 13 Dec 2024 31 Dec 2024 6 Jan 2030 220 - - - 220 220 13 Dec 2024 31 Dec 2025 6 Jan 2030 32,461 - (4,063) (27,0 8 3) 1,315 1,315 13 Dec 2024 21 Aug 2026 6 Jan 2030 14,218 - - (14,218) - - 27 Nov 2025 31 Dec2026 30 Apr 2031 - 311,106 - - 311,106 - 27 Nov 2025 31 Dec 2027 30 Apr 2031 - 226,259 - - 226,259 - 27 Nov 2025 31 Dec 2028 30 Apr 2031 - 226,259 - - 226,259 - 1 May 2026 31 Dec 2026 30 Apr 2031 - 1,405,197 - - 1,405,197 - 1 May 2026 31 Dec 2027 30 Apr 2031 - 990,521 - - 990,521 - 1 May 2026 31 Dec 2028 30 Apr 2031 - 990,521 - - 990,521 - 2,648,270 4,149,863 (458,848) (2,133,148) 4,206,137 56,275 (i) Later expiry dates apply if performance rights have vested on or before the last vesting day. (ii) D uring the year, 4,149,863 performance rights were issued to the Company’s employees. Refer to Note 23(b) for details of the fair value of the performance rights granted. (iii) D uring the year, 2,133,148 performance rights lapsed due to vesting conditions not being met by that date. (iv) Denotes performance rights exercisable as a result of vesting conditions being met during the year. (v) During the year, $1,314,828 (2025: $252,936) was expensed in relation to the vesting of performance rights (see Note 23). (g) C apital Risk Management The consolidated entity’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the consolidated entity may issue new shares, pay dividends or return capital to shareholders. Capital is calculated as ‘equity’ as shown in the statement of financial position and is monitored on the basis of funding exploration activities. The capital risk management policy remains unchanged from the 2025 Annual Report. HOT CHILI Annual Report 2026 69
Page 72
Consolidated Entity 2026 2025 $ $ 20. R ESERVES (a) S hare-Based Payments Reserve The share-based payments reserve is used to recognise the fair value of options, service and performance rights issued: Balance at the beginning of the year 5,082,893 6,445,699 Vesting of service and performance rights during the year (see Note 23) 1,643,665 1,145,406 Issue of options during the year (i) 999,121 - Options or rights expiring during the year (transferred to accumulated losses) - (2,508,212) Balance at the End of the Year 7,725,679 5,082,893 (i) Approved at the General Meeting held 27 November 2025. (b) Fo reign Currency Translation Reserve Balance at the beginning of the year 1,222 1,222 Balance at the End of the Year 1,222 1,222 21. A CCUMULATED LOSSES Accumulated losses at the beginning of the year (84,949,231) (76,319,896) Net loss for the year attributable to the owners of Hot Chili Limited (10,111,664) (11,137,547) Options or rights expiring during the year (transferred from share-based payments reserve) - 2,508,212 Accumulated Losses at the End of the Y ear (95,060,895) (84,949,231) 22. N ON-CONTROLLING INTERESTS Balance at the beginning of the year 21,850,807 19,648,425 Share of net loss for the year (488,331) (452,657) NCI contributions (current year) (i) 1,292,138 2,655,039 Balance at the End of the Year 22,654,614 21,850,807 (i) The above NCI contributions were made by Compañía Minera del Pacífico S.A. (“CMP”) to maintain its interest of 20% in Sociedad Minera El Águila SpA and Aguas para El Huasco SpA. 13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 70 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 73
13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 Consolidated Entity 2026 2025 $ $ 23. S HARE-BASED PAYMENTS Share-Based Payments Expense Recognised in Profit or Loss Vesting of service rights to employees and key consultants of the Company (see Note 23(a) below) 328,837 892,470 V esting of performance rights to employees and key consultants of the Company (see Note 23(b) below) 1,314,828 252,936 R ecognition of shares issued to employees and key consultants of the Company (see Note 23(d) below) 180,000 - T otal Share-Based Payments Expense/(Reversal) Recognised in Profit or Loss 1,823,665 1,145,406 Share-Based Payments Recognised Directly in Equity Options granted to capital raising lead managers during the year 999,121 - Total Share-Based Payments Recognised Directly in Equity 999,121 - Total Share-Based Payment Transactions 2,822,786 1,145,406 Below are details of share-based payments made during the current and previous financial years. (a) S ervice Rights (i) S hare-Based Payments Expense Related to Service Rights $328,837 (2025: $892,470) was expensed in relation to the vesting of the following service rights during the year: Service rights issued in December 2025 90,132 - Service rights issued in January 2025 66,979 225,865 Service rights issued in August 2023 32,324 125,633 Service rights issued in May 2023 139,402 540,972 328,837 892,470 Refer to Note 23(a)(ii) below for details of the key terms and conditions and the fair value of rights granted and issued. HOT CHILI Annual Report 2026 71
Page 74
23. S HARE-BASED PAYMENTS (CONT’D) (a) S ervice Rights (cont’d) (ii) F air Value of Service Rights During the current year 100,147 service rights were issued to the Company’s employees. The fair values for service rights issued in January and December 2025 and August 2023 were determined using the Black Scholes option pricing model. The fair values for service rights issued in May 2023 were determined using the Hoadley ES02 valuation model. The inputs for these models and key terms and conditions of service rights were as follows: Share Based Payment Number Issue Date Valuation Date Spot price at Grant Date Exercise Price Vesting Date Expiry Date Price Volatility Risk-free Interest Rate Dividend Yield Fair Value Per Right Fair Value at Grant Date Vesting Conditions SR - Tranche 1 938,953 12 May 23 10 May 23 $0.9800 Nil 31 Dec 23 12 May 28 75% 3.170% Nil $0.9800 920,174 Continued employment during the 2023 calendar year SR - Tranche 1 115,006 22 Aug 23 21 Aug 23 $1.3200 Nil 31 Dec 23 21 Aug 28 70% 3.950% Nil $1.3200 151,808 SR - Tranche 2 938,955 12 May 23 10 May 23 $0.9800 Nil 31 Dec 24 12 May 28 75% 3.170% Nil $0.9800 920,176 Continued employment during the 2024 calendar year SR - Tranche 2 115,006 22 Aug 23 21 Aug 23 $1.3200 Nil 31 Dec 24 21 Aug 28 70% 3.950% Nil $1.3200 151,808 SR - Tranche 2 105,300 06 Jan 25 24 Sep 24 $0.8450 Nil 31 Dec 24 06 Jan 30 70% 3.950% Nil $0.8450 88,979 SR - Tranche 2 9,931 06 Jan 25 13 Dec 24 $0.7000 Nil 31 Dec 24 06 Jan 30 70% 3.950% Nil $0.7000 6,952 SR - Tranche 3 938,956 12 May 23 10 May 23 $0.9800 Nil 31 Dec 25 12 May 28 75% 3.170% Nil $0.9800 920,177 Continued employment during the 2025 calendar year SR - Tranche 3 114,988 22 Aug 23 21 Aug 23 $1.3200 Nil 31 Dec 25 21 Aug 28 70% 3.950% Nil $1.3200 151,784 SR - Tranche 3 210,600 06 Jan 25 24 Sep 24 $0.8450 Nil 31 Dec 25 06 Jan 30 70% 3.950% Nil $0.8450 177,957 SR - Tranche 3 27,082 06 Jan 25 13 Dec 24 $0.7000 Nil 31 Dec 25 06 Jan 30 70% 3.950% Nil $0.7000 18,957 SR - Tranche 3 100,147 18 Dec 25 19 Dec 25 $0.9000 Nil 31 Dec 25 19 Dec 30 70% 3.950% Nil $0.9000 90,132 Continued employment during the 2025 calendar year (b) P erformance Rights (i) S hare-Based Payments Expense Related to Performance Rights $1,314,828 was expensed (2025: $252,936) in relation to the vesting of the following performance rights during the year: Consolidated Entity 2026 2025 $ $ Performance rights issued in May 2026 1,786,749 Performance rights issued in January 2025 (30,132) 62,168 Performance rights issued in August 2023 (85,326) 47,298 Performance rights issued in May 2023 (356,463) 143,470 1,314,828 252,936 During the year 4,149,863 performance rights were issued to the Company’s employees. 13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 72 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 75
13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 (b) P erformance Rights (Cont’d) (i) S hare-Based Payments Expense Related to Performance Rights (Cont’d) The inputs for these fair value models and the terms and conditions of performance rights were as follows: Share Based Payment Number Issue Date Valuation Date Spot price at Grant Date Exercise Price Vesting Date Expiry Date Price Volatility Risk-free Interest Rate Dividend Yield Fair Value Per Right Fair Value at Grant Date Vesting Conditions PR Class A - Tranche 1 82,994 12 May 23 10 May 23 $0.9800 Nil 31 Dec 23 12 May 28 75% 3.170% Nil $0.9800 81,334 Lost Time Injury Fre- quency Rate ("LTIFR") of less than 27 and zero fatalities during the 2023 calendar year. PR Class A - Tranche 1 11,497 22 Aug 23 21 Aug 23 $1.3200 Nil 31 Dec 23 21 Aug 28 70% 3.950% Nil $1.3200 15,176 PR Class A - Tranche 2 82,995 12 May 23 10 May 23 $0.9800 Nil 31 Dec 24 12 May 28 75% 3.170% Nil $0.9800 81,335 LTIFR of less than 27 and zero fatalities during the 2024 calendar year. PR Class A - Tranche 2 11,497 22 Aug 23 21 Aug 23 $1.3200 Nil 31 Dec 24 21 Aug 28 70% 3.950% Nil $1.3200 15,176 PR Class A - Tranche 2 10,530 06 Jan 25 24 Sep 24 $0.8450 Nil 31 Dec 24 06 Jan 30 70% 3.950% Nil $0.8450 8,898 PR Class A - Tranche 2 2,251 06 Jan 25 13 Dec 24 $0.7000 Nil 31 Dec 24 06 Jan 30 70% 3.950% Nil $0.7000 1,576 PR Class A - Tranche 3 82,998 12 May 23 10 May 23 $0.9800 Nil 31 Dec 25 12 May 28 75% 3.170% Nil $0.9800 81,338 LTIFR of less than 27 and zero fatalities during the 2025 calendar year. PR Class A - Tranche 3 11,506 22 Aug 23 21 Aug 23 $1.3200 Nil 31 Dec 25 21 Aug 28 70% 3.950% Nil $1.3200 15,188 PR Class A - Tranche 3 21,060 06 Jan 25 24 Sep 24 $0.8450 Nil 31 Dec 25 06 Jan 30 70% 3.950% Nil $0.8450 17,796 PR Class A - Tranche 3 5,378 06 Jan 25 13 Dec 24 $0.7000 Nil 31 Dec 25 06 Jan 30 70% 3.950% Nil $0.7000 3,765 PR Class B - Tranche 1 207,486 12 May 23 10 May 23 $0.9800 Nil 31 Dec 23 12 May 28 75% 3.170% Nil $0.7152 203,336 The Company's relative shareholder return ("SR") performance during the 2023 calendar year ranked against a "Peer Group" of comparable companies. The Company's ranking must be above the 50th percentile for any rights in the tranche to vest. The Company's ranking must be above the 75th percentile for all rights in the tranche to vest. PR Class B - Tranche 1 28,747 22 Aug 23 21 Aug 23 $1.3200 Nil 31 Dec 23 21 Aug 28 70% 3.950% Nil $1.3090 37,946 PR Class B - Tranche 2 207,490 12 May 23 10 May 23 $0.9800 Nil 31 Dec 24 12 May 28 75% 3.170% Nil $0.7711 203,340 Criteria per above, applied to the 2024 calendar year. PR Class B - Tranche 2 28,747 22 Aug 23 21 Aug 23 $1.3200 Nil 31 Dec 24 21 Aug 28 70% 3.950% Nil $0.8950 37,946 PR Class B - Tranche 2 26,325 06 Jan 25 24 Sep 24 $0.8450 Nil 31 Dec 24 06 Jan 30 70% 3.950% Nil $0.3940 22,245 PR Class B - Tranche 2 1,265 06 Jan 25 13 Dec 24 $0.7000 Nil 31 Dec 24 06 Jan 30 70% 3.950% Nil $0.3957 886 PR Class B - Tranche 3 207,491 12 May 23 10 May 23 $0.9800 Nil 31 Dec 25 12 May 28 75% 3.170% Nil $0.8278 203,341 Criteria per above, applied to the 2025 calendar year. PR Class B - Tranche 3 28,756 22 Aug 23 21 Aug 23 $1.3200 Nil 31 Dec 25 21 Aug 28 70% 3.950% Nil $0.8960 37,958 PR Class B - Tranche 3 52,650 06 Jan 25 24 Sep 24 $0.8450 Nil 31 Dec 25 06 Jan 30 70% 3.950% Nil $0.6023 44,489 PR Class B - Tranche 3 4,333 06 Jan 25 13 Dec 24 $0.7000 Nil 31 Dec 25 06 Jan 30 70% 3.950% Nil $0.4829 3,033 PR Class C - Tranche 1 311,234 12 May 23 10 May 23 $0.9800 Nil 10 May 26 12 May 28 75% 3.170% Nil $0.4706 305,009 Increase in the Com- pany's 20-day VWAP to $1.69 per share on or before 10 May 2026. PR Class C - Tranche 1 43,129 22 Aug 23 21 Aug 23 $1.3200 Nil 21 Aug 26 21 Aug 28 70% 3.895% Nil $1.0090 56,930 PR Class C - Tranche 1 39,487 06 Jan 25 24 Sep 24 $0.8450 Nil 01 Jul 27 05 Jan 30 70% 3.895% Nil $0.2482 33,367 PR Class C - Tranche 1 7,109 06 Jan 25 13 Dec 24 $0.7000 Nil 01 Jul 27 05 Jan 30 70% 3.895% Nil $0.1570 4,976 PR Class C - Tranche 2 311,232 12 May 23 10 May 23 $0.9800 Nil 10 May 26 12 May 28 75% 3.170% Nil $0.4706 305,007 Increase in the Com- pany's 20-day VWAP to $2.72 per share on or before 10 May 2026. PR Class C - Tranche 2 43,121 22 Aug 23 21 Aug 23 $1.3200 Nil 21 Aug 26 21 Aug 28 70% 3.895% Nil $1.0090 56,920 PR Class C - Tranche 2 39,487 06 Jan 25 24 Sep 24 $0.8450 Nil 01 Jul 27 05 Jan 30 70% 3.895% Nil $0.2482 33,367 PR Class C - Tranche 2 7,109 06 Jan 25 13 Dec 24 $0.7000 Nil 01 Jul 27 05 Jan 30 70% 3.895% Nil $0.1570 4,976 PR Class D - Tranche 1 497,972 12 May 23 10 May 23 $0.9800 Nil 31 Dec 25 12 May 28 75% 3.170% Nil $0.9800 488,013 Total resources growth to 1.2 billion tonnes on or before 31 December 2025. PR Class D - Tranche 1 69,000 22 Aug 23 21 Aug 23 $1.3200 Nil 31 Dec 25 21 Aug 28 70% 3.950% Nil $1.3200 91,080 PR Class D - Tranche 1 63,180 06 Jan 25 24 Sep 24 $0.8450 Nil 01 Jul 27 05 Jan 30 70% 3.895% Nil $0.8450 53,387 PR Class D - Tranche 1 11,375 06 Jan 25 13 Dec 24 $0.7000 Nil 01 Jul 27 05 Jan 30 70% 3.895% Nil $0.7000 7,963 PR Class D - Tranche 2 497,972 12 May 23 10 May 23 $0.9800 Nil 31 Dec 25 12 May 28 75% 3.170% Nil $0.9800 488,013 Total resources growth to between 1.2 billion tonnes and 1.4 billion tonnes on or before 31 December 2025, vesting on a pro-rata basis. PR Class D - Tranche 2 69,000 22 Aug 23 21 Aug 23 $1.3200 Nil 31 Dec 25 21 Aug 28 70% 3.950% Nil $1.3200 91,080 PR Class D - Tranche 2 63,180 06 Jan 25 24 Sep 24 $0.8450 Nil 01 Jul 27 05 Jan 30 70% 3.895% Nil $0.8450 53,387 PR Class D - Tranche 2 11,375 06 Jan 25 13 Dec 24 $0.7000 Nil 01 Jul 27 05 Jan 30 70% 3.895% Nil $0.7000 7,963 23. S HARE-BASED PAYMENTS (CONT’D) HOT CHILI Annual Report 2026 73
Page 76
(b) P erformance Rights (Cont’d) (i) S hare-Based Payments Expense Related to Performance Rights (Cont’d) The fair values for the Class A and Class D performance rights were determined using Black Scholes option pricing model. The fair values for the Class B performance rights were determined using a hybrid employee share option pricing model, and the fair values for the Class C performance rights were determined using a barrier up-and-in trinomial pricing model with a Parisian barrier adjustment. The fair values for STI performance rights, Tranche C LTI performance rights and Tranche D LTI performance rights were determined using Black Scholes option valuation methodology. The fair values for Tranches A and B performance rights were determined using Monte Carlo simulation methodology. (c) O ptions Granted (i) F air Value of Options Granted 1,212,121 options were issued to lead managers and form part of the fees of the capital raising (refer ASX release dated 4 February 2026). T he fair value was determined using the Black-Scholes valuation model. The inputs for the fair value model were as follows: Share Based Payment Number Issue Date V aluation Date S pot price at Grant D ate Exercise Price V esting Date E xpiry Date Price Volatility R isk-free Interest R ate Dividend Yield F air Value Per Right F air Value per Option Br oker & Underwriter Options 1,914,000 25 Jul 24 27 May 24 $1.1750 $1.5000 N/A 25 Jul 26 100% 4.030% Nil $0.5652 1,081,882 Broker & Underwriter Options 1,212,121 12 Feb 26 12 Feb 26 $1.7000 $2.1450 N/A 11 Feb 31 100% 4.230% Nil $0.8243 999,121 (d) S hares Issued 200,000 fully paid ordinary shares were issued for onboarding of the Chairman. 13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 23. S HARE-BASED PAYMENTS (CONT’D) 74 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 77
13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 24. F INANCIAL RISK MANAGEMENT The consolidated entity’s principal financial instruments comprise receivables, payables, cash and short-term deposits. The consolidated entity manages its exposure to key financial risks in accordance with the consolidated entity’s financial risk management policy. The objective of the policy is to support the delivery of the consolidated entity’s financial targets while protecting future financial security. The main risks arising from the consolidated entity’s financial instruments are market risk (including interest rate risk and foreign exchange risk), credit risk and liquidity risk. The consolidated entity uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rates and assessments of market forecasts for interest rates. Ageing analysis of and monitoring of receivables are undertaken to manage credit risk, liquidity risk is monitored through the development of future rolling cash flow forecasts. T he Board reviews and agrees policies for managing each of these risks as summarised below. Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and agrees policies for managing each of the risks identified below, including for interest rate risk, credit allowances and cash flow forecast projections. Risk Exposures and Responses: (a) I nterest Rate Risk Exposure The consolidated entity is exposed to interest rate risk on financial assets and financial liabilities at the end of the reporting period where a change in interest rates may affect future cashflows or fair values of financial instruments. The group is exposed to interest rate risk on its cash and cash equivalent balances which are subject to floating interest rates. At year end, cash balances subject to floating interest amounted to of $26,391 (2025: $2,416,933). The following table illustrates sensitivities to the consolidated entity’s exposures to changes in interest rates. The table indicates how profit and equity values reported at reporting date would have been affected by changes in the relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is independent of other variables. Sensitivity Analyses At 30 June 2026 and at 30 June 2025, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows: Consolidated Entity 2026 Impact on Post Tax Profit $ I mpact on Equity $ Increase in interest rate by 2% 528 528 Decrease in interest rate by 2% (528) (528) 2025 Increase in interest rate by 2% 48,339 48,339 Decrease in interest rate by 2% (48,339) (48,339) HOT CHILI Annual Report 2026 75
Page 78
24. F INANCIAL RISK MANAGEMENT (CONT’D) Risk Exposures and Responses: (Cont’d) (b) C redit Risk Exposure Credit risk arises from the financial assets of the consolidated entity, which comprise deposits with banks and trade and other receivables. The consolidated entity’s exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal to the carrying amount of these instruments. The carrying amount of financial assets included in the statement of financial position represents the consolidated entity’s maximum exposure to credit risk in relation to those assets. The consolidated entity does not hold any credit derivatives to offset its credit exposure. The consolidated entity trades only with recognised, credit worthy third parties and as such collateral is not requested nor is it the Company’s policy to securities it trades and other receivables. Receivable balances are not significant and are monitored on an ongoing basis with the result that the consolidated entity does not have a significant exposure to bad debts. There are no significant concentrations of credit risk within the consolidated entity. (c) L iquidity Risk Liquidity risk arises from the financial liabilities of the consolidated entity and the consolidated entity’s subsequent ability to meet their obligations to repay their financial liabilities as and when they fall due. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and, the availability of funding through the ability to raise further equity or through related party entities. Due to the dynamic nature of the underlying businesses, the Board aims at maintaining flexibility in funding through management of its cash resources. The consolidated entity has no financial liabilities at the year-end other than normal trade and other payables incurred in the general course of business. Financing Arrangements Remaining Contractual Maturities The following tables detail the consolidated entity’s remaining contractual maturity for its financial liability instruments. The tables have been drawn up based on the undiscounted cash flows of financial instruments liabilities based on the earliest date on which the financial instruments are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position. Contractual Maturities of Financial Liabilities Consolidated Weighted Average Interest Rate 1 Year or Less B etween 1 and 6 Years R emaining Contractual Maturities Amount per Statement of Financial Position At 30 June 2026 % $ $ $ $ Non-Derivatives Trade payables - 6,823,251 - 6,823,251 6,823,251 Lease liabilities - interest bearing 11.0 - 13.0 168,970 324,211 493,181 428,122 Total Financial Liabilities 6,992,221 324,211 7,316,432 7,251,373 At 30 June 2025 Non-Derivatives Trade payables - 4,391,338 - 4,391,338 4,391,338 Lease liabilities - interest bearing 11.00 - 13.00 170,192 346,281 516,473 415,299 Total Financial Liabilities 4,561,530 346,281 4,907,811 4,806,637 13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 HOT CHILI Annual Report 2026 76 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 79
13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 24. F INANCIAL RISK MANAGEMENT (CONT’D) Risk Exposures and Responses: (Cont’d) (c) L iquidity Risk (Cont’d) Financial Assets Available to Manage Liquidity Consolidated Weighted Average Interest Rate 1 Year or Less B etween 1 and 5 Years R emaining Contractual Maturities Amount per Statement of Financial Position At 30 June 2026 % $ $ $ $ Non-Derivatives Cash and cash equivalents 3.02 24,947,836 - 24,947,836 24,947,836 Other receivables (term deposits and bonds) 2. 82 40,000 197,925 237,925 237,925 Total Financial Assets 24,987,836 197,925 25,185,761 25,185,761 At 30 June 2025 Non-Derivatives Cash and cash equivalents 1.79 5,189,090 - 5,189,090 5,189,090 Other receivables (term deposits and bonds) 1. 76 192,673 200,388 393,061 393,061 Total Financial Assets 5,381,763 200,388 5,582,151 5,582,151 (d) M arket Risk Foreign Exchange Risk The consolidated entity is exposed to foreign exchange risk through its cash holdings, assets and liabilities not denominated in Australian dollars. The group’s foreign currency denominated cash holdings, assets and liabilities are primarily denominated in US dollars (“USD”), Canadian dollars (“CAD”), and Chilean pesos (“CLP”). The group’s exposure to foreign exchange risk at the end of the reporting period, expressed in Australian dollars, was as follows: Assets and Liabilities Exposed to Foreign Exchange Risk Consolidated CLP Denominated US D Denominated CA D Denominated A t 30 June 2026 $ $ $ Cash and cash equivalents 305,247 6,635,723 117,929 Other receivables (term deposits and bonds) 7 3,143 145,582 - Trade payables and accruals (5,937,427) (62,787) (21,625) Net Exposure to Foreign Exchange Risk (5,559,037) 6,718,518 96,304 At 30 June 2025 Cash and cash equivalents 2,460,437 43,390 96,439 Other receivables (term deposits and bonds) 75 ,607 152,672 - Trade payables and accruals (3,724,615) (21,973) (60,566) Net Exposure to Foreign Exchange Risk (1,188,571) 174,089 35,873 HOT CHILI Annual Report 2026 77 HOT CHILI Annual Report 2026
Page 80
24. F INANCIAL RISK MANAGEMENT (CONT’D) Risk Exposures and Responses: (Cont’d) (d) M arket Risk (Cont’d) Sensitivity Analyses The consolidated entity has considered the sensitivity relating to its exposure to foreign currency risk at reporting date. This sensitivity analysis considers the effect on current and previous year results and equity which could result from a change in the AUD to CLP rate, the AUD to USD rate, and the AUD to CAD rate. The table below summarises the impact of + / - 10% strengthening/ weakening of the AUD against the CLP, the USD, and the CAD on the consolidated entity’s post-tax profit and equity. The analysis is based on a 10% strengthening/weakening of the AUD against the CLP, the USD, and the CAD at reporting date with all other factors remaining constant. Consolidated Entity 2026 Impact on Post Tax Profit $ I mpact on Equity $ Strengthening of the AUD against the CLP by 10% 555,904 555,904 Weakening of the AUD against the CLP by 10% (555,904) (555,904) Strengthening of the AUD against the USD by 10% (671,852) (671,852) Weakening of the AUD against the USD by 10% 671,852 671,852 Strengthening of the AUD against the CAD by 10% (9,630) (9,630) Weakening of the AUD against the CAD by 10% 9,630 9,630 2025 Strengthening of the AUD against the CLP by 10% 118,857 118,857 Weakening of the AUD against the CLP by 10% (118,857) (118,857) Strengthening of the AUD against the USD by 10% (17,409) (17,409) Weakening of the AUD against the USD by 10% 17,409 17,409 Strengthening of the AUD against the CAD by 10% (3,587) (3,587) Weakening of the AUD against the CAD by 10% 3,587 3,587 25. R ELATED PARTIES (a) P arent Entity Hot Chili Limited is the ultimate parent entity. Relevant parent entity disclosures are set out in Note 26. (b) S ubsidiaries Interests in subsidiaries are set out in Note 27. (c) K ey Management Personnel Disclosures relating to key management personnel (“KMP”) are set out in Note 28 and the Remuneration Report included in the Directors’ Report. (d) T ransactions with Related Parties There were no related party transactions during the financial years ended on 30 June 2026 and on 30 June 2025. 13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 HOT CHILI Annual Report 2026 78 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 81
13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 26. P ARENT ENTITY DISCLOSURES Hot Chili Limited 2026 2025 $ $ (a) Financial Position Assets Current assets 25,220,973 3,046,634 Non-current assets 251,481,389 228,116,180 Total Assets 276,702,362 231,162,814 Liabilities Current liabilities 1,333,682 1,058,636 Non-current liabilities 67,356 48,581 Total Liabilities 1,401,038 1,107,217 Equity Issued capital 347,247,758 297,649,862 Reserves 7,725,679 5,082,893 Accumulated losses (79,672,113) (72,677,158) Total Equity 275,301,324 230,055,597 (b) Financial Performance Loss for the year (6,994,956) (5,126,592) Total Comprehensive Income (6,994,956) (5,126,592) (c) Contingent Liabilities of the Parent Entity The parent entity did not have any contingent liabilities as at 30 June 2026 or at 30 June 2025. (d) Contractual Commitments for the Acquisition of Property, Plant or Equipment The parent entity did not have any contractual commitments for the acquisition of property, plant or equipment as at 30 June 2026 or at 30 June 2025. (e) Material Accounting Policies The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in Note 1, except for the following: (i) i nvestments in subsidiaries are accounted for at cost, less any impairment, in the parent entity; (ii) i nvestments in associates are accounted for at cost, less any impairment, in the parent entity; and (iii) d ividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of a n impairment of the investment. HOT CHILI Annual Report 2026 79 HOT CHILI Annual Report 2026
Page 82
27. IN TEREST IN SUBSIDIARIES (a) S ubsidiaries The consolidated financial statements incorporate the assets, liabilities, and results of the following material subsidiaries, in accordance with the accounting policy described in Note 1(g): Equity Holding Name of Entity Country of Incorporation Class of Shares 2 026 % 2 025 % S ociedad Minera El Corazón Limitada Chile Ordinary 100 100 Sociedad Minera El Águila SpA (i) Chile Ordinary 80(i) 80(i) Aguas para El Huasco SpA (i) (ii) Chile Ordinary 80(i) 80(i) Sociedad Minera La Frontera SpA Chile Ordinary 100 100 Sociedad Minera Banderas SpA Chile Ordinary 100 100 Sociedad Minera Los Mantos SpA Chile Ordinary 100 100 (i) T he non-controlling interests hold 20% of Sociedad Minera El Águila SpA and Aguas para El Huasco SpA (“SMEA”) - refer to Note 27(b) below. (ii) T he Company was incorporated on 28 June 2024. (b) N on-Controlling Interests (“NCI”) Summarised financial information of the subsidiary with NCI that are material to the consolidated entity are set out below: SMEA 2026 2025 $ $ (i) S ummarised Statement of Profit or Loss and Other Comprehensive Income Revenue - 34 Expenses (2,441,655) (2,263,320) Loss Before Income Tax Expense (2,441,655) (2,263,286) Income tax expense - - Loss After Income Tax Expense (2,441,655) (2,263,286) Other comprehensive income - - Total Comprehensive Loss (2,441,655) (2,263,286) (ii) S ummarised Statement of Financial Position Assets Current assets 999,880 2,745,273 Non-current assets 140,094,272 131,440,191 Total Assets 141,094,152 134,185,464 Liabilities Current liabilities 2,323,763 1,995,689 Non-current liabilities 25,497,320 22,935,742 Total Liabilities 27,821,083 24,931,431 Net Assets 113,273,069 109,254,033 (iii) S tatement of Cash Flows Net cash used in operating activities (2,410,057) (2,224,774) Net cash used in investing activities (5,297,505) (11,552,364) Net cash from financing activities 7,730,129 13,401,788 Net Increase/(Decrease) in Cash and Cash Equivalents 22,567 (375,350) (iv) O ther Financial Information Loss attributable to non-controlling interests (488,331) (452,657) Accumulated Non-Controlling Interests at the End of the Reporting Period 22,654,614 21,850,807 13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 HOT CHILI Annual Report 2026 80 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 83
13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 28. K EY MANAGEMENT PERSONNEL DISCLOSURES The following were the directors and other key management personnel (“KMP”) of the consolidated entity at any time during the current and previous financial years and unless otherwise indicated, were KMP for the entire period: Non-Executive Directors P osition Stuart Mathews I ndependent Non-Executive Chair Roberto de Andraca Adriasola N on-Executive Director Mark Jamieson N on-Executive Director Fiona Van Maanen I ndependent Non-executive Director E xecutive Director P osition Christian Easterday M anaging Director O ther KMP P osition José Ignacio Silva C ountry Manager and Executive Vice President Grant King C hief Operating Officer Alberto Cerda 1 P roject Director/Consultant David Bayona 2 P roject Director 1 Until 1 December 2025 when he moved to a consulting role 2 Appointed 2 March 2026 The remuneration of the directors and other KMP of the consolidated entity, as listed above, is set out below in aggregate: Consolidated Entity 2026 2025 $ $ Directors Short-term benefits 735,097 554,541 Post-employment benefits 83,880 53,063 Share-based payments 532,983 281,281 Other benefits 34,486 11,999 1,386,446 900,884 Other KMP Short-term benefits 1,005,258 723,499 Post-employment benefits 30,000 29,932 Share-based payments 409,554 282,767 Other benefits 38,812 10,175 1,483,624 1,046,373 Total 2,870,070 1,947,257 HOT CHILI Annual Report 2026 81 HOT CHILI Annual Report 2026
Page 84
29. RE MUNERATION OF AUDITORS Consolidated Entity 2026 2025 $ $ (a) R SM Australia Partners Audit or review of financial reports for the Group 78,000 74,000 Tax compliance services 20,500 18,500 Tax advisory services* 45,192 - Total Audit and Other Services Provided by RSM Australia Partners 143,692 92,500 Total Remuneration of Auditors 143,692 92,500 * R elates to non-recurring advisory services. 30. E VENTS OCCURRING AFTER REPORTING DATE On 7 July 2026, the Company announced the execution of a binding Amended and Restated Investment Agreement (‘the A&R Investment Agreement’) with OR Royalties Inc., formerly Osisko Gold Royalties Ltd (‘OR’) pursuant to which the Company has agreed to grant to OR a Net Smelter Return (‘NSR’) royalty on the Company’s La Verde Project, as part of the broader Costa Fuego Cu-Au Project (‘Costa Fuego’ or ‘the Project’), in consideration for cash payment of US$15 million. The A&R Investment Agreement brings total royalty consideration under the OR royalty arrangement to US$30 million (see the Company’s press releases dated 28 June 2023, and 26 July 2023) with Hot Chili to receive US$15 million (‘Royalty Consideration’) at closing of the transactions contemplated by the A&R Investment Agreement. On 14 July 2026, 161,059 vested Service Rights and 16,106 vested Performance Rights were exercised. On 25 July 2026, 1,914,000 Options expired without exercise or conversion. On 7 August 2026, 32,500 vested Service Rights and 5,958 vested Performance Rights were exercised. Other than the above, the directors are not aware of any other matters or circumstances that have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the consolidated entity the results of those operations, or the state of affairs of the consolidated entity in future financial periods. 13 N otes to the Financial Statements(Cont’d) FOR THE YEAR ENDED 30 JUNE 2026 HOT CHILI Annual Report 2026 82 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 85
The following entities were part of the consolidated entity as at 30 June 2026: Entity Name Entity Type Ownership Interest of Ultimate Parent Entity % P lace of Business and Country of Incorporation Australian or Foreign Resident (i) Foreign Jurisdiction of Foreign Residents (ii) Ultimate Parent Entity (iii) Hot Chili Limited Body Corporate (Listed Public Entity) (N/A: Listed Public Ultimate Parent Entity) Australia Australian N/A Chilean Parent Entity (iii) Sociedad Minera El Corazón Limitada Body Corporate 100 Chile Foreign Republic of Chile Chilean Subsidiaries (iii) Sociedad Minera El Águila SpA Body Corporate 80 Chile Foreign Republic of Chile Aguas para El Huasco SpA Body Corporate 80 Chile Foreign Republic of Chile Sociedad Minera La Frontera SpA Body Corporate 100 Chile Foreign Republic of Chile Sociedad Minera Banderas SpA Body Corporate 100 Chile Foreign Republic of Chile Sociedad Minera Los Mantos SpA Body Corporate 100 Chile Foreign Republic of Chile (i) Within the meaning of the Income Tax Assessment Act 1997. (ii) Resident of the foreign jurisdiction for the purposes of the law of the foreign jurisdiction relating to foreign income tax (within the meaning of that Act). (iii) Hot Chili Limited, the ultimate parent entity of this consolidated group, holds 100% of the equity of Sociedad Minera El Corazón Limitada. Sociedad Minera El Corazón Limitada, in turn, holds 80% of the share capital of Sociedad Minera El Águila SpA and Agus para El Huasco SpA, and 100% of the share capital of Sociedad Minera La Frontera SpA, Sociedad Minera Banderas SpA, Sociedad Minera Los Mantos SpA. (a) B asis of preparation The Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the Corporations Act 2001 . It includes certain information for each entity that was part of the consolidated entity at the end of the financial year. 14 Consolidated Entity Disclosure Statement AS AT 30 JUNE 2026 HOT CHILI Annual Report 2026 83 HOT CHILI Annual Report 2026
Page 86
AS AT 21 SEPTEMBER 2026 15 S hareholder Information Information Required by the Australian Securities Exchange Limited (a) S pread of Holdings Shareholders Units % 1 - 1 ,000 1,758 1,005,487 0.50% 1,001 - 5 ,000 2,042 5,257,244 2.59% 5,001 - 1 0,000 742 5,492,534 2.71% 10,001 - 1 00,000 966 30,225,193* 14.90% 100,001 & O ver 207 160,921,198 79.28% 5,715 202,901,656 100% There are 371 holders of unmarketable parcels comprising 59,598 shares. (b) ( b) T he names of the twenty largest shareholders as at 21 September 2026, who between them held 57.35% of the issued capital are listed below: Number of Ordinary Shares % 1 C ITICORP NOMINEES PTY LIMITED 21,042,398 10.37 2 CANADIAN REGISTER CONTROL A\C (CDS & CO) 17,212,121 8.48 3 GLENCORE AUSTRALIA HOLDINGS PTY LIMITED 15,242,732 7.51 4 BLUE SPEC 11,779,602 5.81 5 HSBC CUSTODY NOMINEES 11,323,958 5.58 6 GS GROUP AUSTRALIA PTY LTD <GS GROUP AUSTRALIA A/C> 10,189,409 5.02 7 BNP PARIBAS NOMINEES PTY LTD <IB AU NOMS RETAILCLIENT> 5,934,618 2.92 8 MR DAVID STEWART FIELD 3,790,000 1.87 9 BNP PARIBAS NOMINEES PTY LTD 3,622,321 1.79 10 DALTON CORPORATE PTY LIMITED <DALTON FAM SF A/C> 2,640,000 1.30 11 SAMLISA NOMINEES PTY LTD 2,000,000 0.99 12 MR CHRISTIAN ERVIN EASTERDAY 1,892,842 0.93 13 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2 1,669,058 0.82 14 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 1,419,168 0.70 15 CAP S A 1,323,078 0.65 16 LONERGAN FOUNDATION PTY LTD <LONERGAN FOUNDATION A/C> 1,280,000 0.63 17 BNP PARIBAS NOMINEES PTY LTD <CLEARSTREAM> 1,093,425 0.54 18 MRS NERIDA RUTH SCOTT <SCOTT FAMILY A/C> 1,040,000 0.51 19 DIAMOND ROCK PTY LTD 960,000 0.47 20 MS JIHUA WANG 914,975 0.45 Total Units Held 116,369,705 57.35 Total Units on Issue 202,901,656 100 (c) S ubstantial Shareholders (from Substantial Shareholder Notices): Relevant Interest Per Notice Date Received Number of Shares % of Issued Capital Murray Edward Black (grouped) 03/10/2025 10,034,147 5.66% Glencore Australia Holdings Pty Ltd 21/05/2024 11,235,497 7.78% GS Group Australia Pty Ltd atf GS Group Australia Trust 01/02/2024 8,320,123 6.97% HOT CHILI Annual Report 2026 84 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 87
AS AT 21 SEPTEMBER 2026 15 S hareholder Information(Cont’d) Information Required by the Australian Securities Exchange Limited (Cont’d) (d) H oldings of Warrants, Options and Rights (i) A s at 21 September 2026 there are no listed warrants over shares on issue. (ii) A s at 21 September 2026 there are 4 holders of the 1,212,121 unlisted options over shares on issue. There are no voting rights attached to unlisted options: Class No. of Unquoted Equity S ecurities No. of Holders N o. of Holders Holding 20% or More in the Class U nlisted options exercisable at A$2.145 expiring 12 August 2028 1,212,121 4 3 1,212,121 4 3 Unquoted Equity Security Holdings Greater Than or Equal to 20% Unlisted Options Exercisable at $2.145 Expiring 12 August 2028 No. of Unlisted O ptions % 1 VERITAS CONSOLIDATED PTY LTD 375,758 31.00% 2 NATIONAL BANK FINANCIAL INC <5FHE0AA A/C> 375,758 31.00% 3 DESJARDINS SECURITIES INC 339,393 28.00 Total Units Held 1,090,909 90.400 Total Units on Issue 1,212,121 100% (iii) A s at 21 September 2026 there 8 holders of the 320,155 service rights on issue. There are no voting rights attached to service rights. (iv) A s at 21 September 2026 there 38 holders of the 4,263,829 performance rights on issue. There are no voting rights attached to performance rights. (e) O n-Market Buyback As at 21 September 2026 there was no current on-market buyback under way. HOT CHILI Annual Report 2026 85 HOT CHILI Annual Report 2026
Page 88
Table 2: Current Tenement (Patente) Holdings in Chile as at 30 June 2026 Cortadera Project Tenements No License ID HCH % Held H CH % Earning A rea (ha) A greement Details 1 ALCENIA 1/10 100% SMEA SpA 50 2 AMALIA 942 A 1/6 100% Frontera SpA 53 3 ATACAMITA 1/82 100% Frontera SpA 82 4 CORROTEO 1 1/260 100% Frontera SpA 260 5 CORROTEO 5 1/261 100% Frontera SpA 261 6 CORTADERA 1 1/200 100% Frontera SpA 200 7 CORTADERA 1/40 100% Frontera SpA 374 8 CORTADERA 2 1/200 100% Frontera SpA 200 9 CORTADERA 41 100% Frontera SpA 1 10 CORTADERA 42 100% Frontera SpA 1 11 LAS CANAS 1/15 100% Frontera SpA 146 12 LAS CANAS 16 100% Frontera SpA 1 13 LAS CANAS ESTE 2003 1/30 100% Frontera SpA 300 14 MAGDALENITA 1/20 100% Frontera SpA 100 15 PAULINA 10 B 1/16 100% Frontera SpA 136 16 PAULINA 11 B 1/30 100% Frontera SpA 249 17 PAULINA 12 B 1/30 100% Frontera SpA 294 18 PAULINA 13 B 1/30 100% Frontera SpA 264 19 PAULINA 14 B 1/30 100% Frontera SpA 265 20 PAULINA 15 B 1/30 100% Frontera SpA 200 21 PAULINA 22 A 1/30 100% Frontera SpA 300 22 PAULINA 24 1/24 100% Frontera SpA 183 23 PAULINA 25 A 1/19 100% Frontera SpA 156 24 PAULINA 26 A 1/30 100% Frontera SpA 294 25 PAULINA 27A 1/30 100% Frontera SpA 300 26 PURISIMA 1/8 (1/2 Y 5/6) 100% Frontera SpA 20 NSR 1.5% 27 CF 1 100% Frontera SpA 300 28 CF 2 100% Frontera SpA 300 29 CF 3 100% Frontera SpA 300 30 CF 4 100% Frontera SpA 300 31 CF 5 100% Frontera SpA 200 32 CF 6 100% Frontera SpA 200 33 CF 7 100% Frontera SpA 100 34 CF 8 100% Frontera SpA 200 35 CF 9 100% Frontera SpA 100 36 CF 10 100% Frontera SpA 200 37 CF 11 100% Frontera SpA 200 16 T enement Schedule 86 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 89
16 Tenement Schedule (Cont’d) No License ID HCH % Held H CH % Earning A rea (ha) A greement Details 38 CHAPULIN COLORADO 1/3 100% Frontera SpA 3 39 CHILIS 1 100% Frontera SpA 200 40 CHILIS 3 100% Frontera SpA 100 41 CHILIS 4 100% Frontera SpA 200 42 CHILIS 5 100% Frontera SpA 200 43 CHILIS 6 100% Frontera SpA 200 44 CHILIS 7 100% Frontera SpA 200 45 CHILIS 8 100% Frontera SpA 200 46 CHILIS 9 100% Frontera SpA 300 47 CHILIS 10 1/38 100% Frontera SpA 190 48 CHILIS 11 100% Frontera SpA 200 49 CHILIS 12 1/60 100% Frontera SpA 300 50 CHILIS 13 100% Frontera SpA 300 51 CHILIS 14 100% Frontera SpA 300 52 CHILIS 15 100% Frontera SpA 300 53 CHILIS 16 100% Frontera SpA 300 54 CHILIS 17 100% Frontera SpA 300 55 CHILIS 18 100% Frontera SpA 300 56 CORTADERA 1 100% Frontera SpA 200 57 CORTADERA 2 100% Frontera SpA 200 58 CORTADERA 3 100% Frontera SpA 200 59 CORTADERA 4 100% Frontera SpA 200 60 CORTADERA 5 100% Frontera SpA 200 61 CORTADERA 6 1/60 100% Frontera SpA 265 62 CORTADERA 7 1/20 100% Frontera SpA 93 63 CRISTINA 1/40 100% SMEA SpA 40 64 DIABLITO 1/5 100% SMEA SpA 25 65 DONA FELIPA 1/10 100% Frontera SpA 50 66 DORO 1 100% Frontera SpA 200 67 DORO 2 100% Frontera SpA 200 68 DORO 3 100% Frontera SpA 300 69 FALLA MAIPO 2 1/10 100% Frontera SpA 99 70 FALLA MAIPO 3 1/8 100% Frontera SpA 72 71 FALLA MAIPO 4 1/26 100% Frontera SpA 26 72 MINORI 1 100% SMEA SpA 300 73 MINORI 2 100% SMEA SpA 300 74 MINORI 3 100% SMEA SpA 300 75 MINORI 4 100% SMEA SpA 300 Table 2: Current Tenement (Patente) Holdings in Chile as at 30 June 2026 (Cont’d) Cortadera Project Tenements (Cont’d) HOT CHILI Annual Report 2026 87
Page 90
16 Tenement Schedule (Cont’d) Table 2: Current Tenement (Patente) Holdings in Chile as at 30 June 2026 (Cont’d) Cortadera Project Tenements (Cont’d) No License ID HCH % Held H CH % Earning A rea (ha) A greement Details 76 PORFIADA B 100% Frontera SpA 200 77 PORFIADA D 100% Frontera SpA 300 78 PORFIADA G 100% Frontera SpA 200 79 PORFIADA I 100% Frontera SpA 300 80 PORFIADA II 100% Frontera SpA 300 81 PORFIADA III 100% Frontera SpA 300 82 PORFIADA IV 100% Frontera SpA 300 83 PORFIADA V 100% Frontera SpA 200 84 PORFIADA VI 100% Frontera SpA 100 85 PORFIADA X 100% Frontera SpA 200 86 SAN ANTONIO 1 100% Frontera SpA 200 87 SAN ANTONIO 2 100% Frontera SpA 200 88 SAN ANTONIO 3 100% Frontera SpA 300 89 SAN ANTONIO 4 100% Frontera SpA 300 90 SAN ANTONIO 5 100% Frontera SpA 300 91 MARINA 1/10 100% Frontera SpA 100 92 CATITA V 1/9 100% Frontera SpA 9 93 CHILIS 19 100% Frontera SpA 300 94 PAULINA 100% Frontera SpA 100 95 ARBOLEDA 7 1/25 100% Frontera SpA 234 96 NAVARRO 1 41/60 100% Frontera SpA 81 97 WH 1 1/20 100% Frontera SpA 100 TOTAL 19,377 N ote. Sociedad Minera La Frontera SpA is a 100% owned subsidiary company of Hot Chili Limited 88 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 91
16 Tenement Schedule (Cont’d) Productora Project Tenements No License ID HCH % Held H CH % Earning A rea (ha) A greement Details 1 ALGA 7 A 1/32 80% SMEA SpA 89 2 ALGA VI 4 100% SMEA SpA 2 3 ALGA VI 5/24 80% SMEA SpA 66 4 ARENA 1 1/6 80% SMEA SpA 40 5 ARENA 2 1/17 80% SMEA SpA 113 6 AURO HUASCO 1A 1/8 80% SMEA SpA 35 7 CABRITO-CABRITO 1/9 80% SMEA SpA 50 8 CACHIYUYITO 1 1/20 80% SMEA SpA 100 9 CACHIYUYITO 2 1/60 80% SMEA SpA 300 10 CACHIYUYITO 3 1/60 80% SMEA SpA 300 11 CARMEN I, 1/50 80% SMEA SpA 222 12 CARMEN II, 1/60 80% SMEA SpA 274 13 CF 12 100% Frontera SpA 100 14 CF 13 100% Frontera SpA 200 15 CF 14 100% Frontera SpA 300 16 CHICA 80% SMEA SpA 1 17 CHOAPA 1/10 80% SMEA SpA 50 18 CUENCA A 1/51 80% SMEA SpA 255 19 CUENCA B 1/28 80% SMEA SpA 139 20 CUENCA C 1/51 80% SMEA SpA 255 21 CUENCA D 80% SMEA SpA 3 22 CUENCA E 80% SMEA SpA 1 23 ELEONOR RIGBY 1/10 100% Frontera SpA 100 24 ELQUI 1/14 80% SMEA SpA 61 25 ESPERANZA 1/5 80% SMEA SpA 11 26 FRAN 1 1/60 80% SMEA SpA 220 27 FRAN 12 1/40 80% SMEA SpA 200 28 FRAN 13 1/40 80% SMEA SpA 200 29 FRAN 14 1/40 80% SMEA SpA 200 30 FRAN 15 1/60 80% SMEA SpA 300 31 FRAN 18, 1/60 80% SMEA SpA 273 32 FRAN 2 1/20 80% SMEA SpA 100 33 FRAN 21, 1/46 80% SMEA SpA 226 34 FRAN 3 1/20 80% SMEA SpA 100 35 FRAN 4 1/20 80% SMEA SpA 100 36 FRAN 5 1/20 80% SMEA SpA 100 37 FRAN 6 1/26 80% SMEA SpA 130 38 FRAN 7 1/37 80% SMEA SpA 176 39 FRAN 8 1/30 80% SMEA SpA 120 Table 2: Current Tenement (Patente) Holdings in Chile as at 30 June 2026 (Cont’d) HOT CHILI Annual Report 2026 89
Page 92
16 Tenement Schedule (Cont’d) No License ID HCH % Held H CH % Earning A rea (ha) A greement Details 40 JULI 10 1/60 80% SMEA SpA 300 41 JULI 11, 1/60 80% SMEA SpA 300 42 JULI 12, 1/42 80% SMEA SpA 210 43 JULI 13, 1/20 80% SMEA SpA 100 44 JULI 14, 1/50 80% SMEA SpA 250 45 JULI 15, 1/55 80% SMEA SpA 275 46 JULI 16 1/60 80% SMEA SpA 300 47 JULI 17 1/20 80% SMEA SpA 100 48 JULI 19 80% SMEA SpA 300 49 JULI 20 80% SMEA SpA 300 50 JULI 21 1/60 80% SMEA SpA 300 51 JULI 22 80% SMEA SpA 300 52 JULI 23 1/60 80% SMEA SpA 300 53 JULI 24 1/60 80% SMEA SpA 300 54 JULI 25 80% SMEA SpA 300 55 JULI 27 B, 1/10 80% SMEA SpA 48 56 JULI 27, 1/30 80% SMEA SpA 146 57 JULI 28, 1/60 80% SMEA SpA 300 58 JULI 9, 1/60 80% SMEA SpA 300 59 JULIETA 10, 1/60 80% SMEA SpA 300 60 JULIETA 11 80% SMEA SpA 300 61 JULIETA 12 80% SMEA SpA 300 62 JULIETA 13 1/60 80% SMEA SpA 298 63 JULIETA 14 1/60 80% SMEA SpA 269 64 JULIETA 15 1/40 80% SMEA SpA 200 65 JULIETA 16 80% SMEA SpA 200 66 JULIETA 17 80% SMEA SpA 200 67 JULIETA 18 1/40 80% SMEA SpA 200 68 JULIETA 5 80% SMEA SpA 200 69 JULIETA 6 80% SMEA SpA 200 70 JULIETA 7 80% SMEA SpA 100 71 JULIETA 8 80% SMEA SpA 100 72 JULIETA 9 80% SMEA SpA 100 73 JULITA ¼ 80% SMEA SpA 4 74 LEONA 2A ¼ 80% SMEA SpA 10 75 LIMARI 1/15 80% SMEA SpA 66 Table 2: Current Tenement (Patente) Holdings in Chile as at 30 June 2026 (Cont’d) Productora Project Tenements (Cont’d) 90 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 93
16 Tenement Schedule (Cont’d) No License ID HCH % Held H CH % Earning A rea (ha) A greement Details 76 LOA 1/6 80% SMEA SpA 30 77 MAIPO 1/10 80% SMEA SpA 50 78 MONTOSA ¼ 80% SMEA SpA 35 NSR 3% 79 ORO INDIO 1A 1/20 80% SMEA SpA 82 80 PEGGY SUE 1/10 100% Frontera SpA 100 81 PRODUCTORA 1/16 80% SMEA SpA 75 82 TOLTEN 1/14 80% SMEA SpA 70 83 URANIO 1/70 0% 350 25-year Lease Agreement US$250,000 per year (average for the 25 year term); plus 2% NSR all but gold; 4% NSR gold; 5% NSR non-metallic 84 Z APA 1 1/10 80% SMEA SpA 100 85 ZAPA 1/6 80% SMEA SpA 6 GSR 1% 86 ZAPA 3 1/23 80% SMEA SpA 92 87 ZAPA 5A 1/16 80% SMEA SpA 80 88 ZAPA 7 1/24 80% SMEA SpA 120 89 SIERRA SOLIS 1 100% SMEA SpA 200 90 SIERRA SOLIS 2 100% SMEA SpA 300 91 SIERRA SOLIS 3 100% SMEA SpA 300 92 SIERRA SOLIS 4 100% SMEA SpA 200 93 SIERRA SOLIS 5 100% SMEA SpA 300 94 SIERRA SOLIS 6 100% SMEA SpA 300 95 SIERRA SOLIS 7 100% SMEA SpA 300 96 SIERRA SOLIS 8 100% SMEA SpA 300 97 ZAPALLO 1 100% SMEA SpA 100 98 ZAPALLO 2 100% SMEA SpA 200 99 ZAPALLO 3 100% SMEA SpA 200 100 HWZC 1 1/14 100% SMEA SpA 98 101 BUENA SUERTE 1/6 100% SMEA SpA 30 102 PILAR 1/2 100% SMEA SpA 10 TOTAL 17,316 Note. Sociedad Minera El Aguila SpA (“SMEA”) is subsidiary company - 80% owned by Hot Chili Limited, 20% owned by CMP (Compañía Minera del Pacífico) Note. Sociedad Minera La Frontera SpA is a 100% owned subsidiary company of Hot Chili Limited. Table 2: Current Tenement (Patente) Holdings in Chile as at 30 June 2026 (Cont’d) Productora Project Tenements (Cont’d) HOT CHILI Annual Report 2026 91
Page 94
16 Tenement Schedule (Cont’d) No License ID HCH % Held H CH % Earning A rea (ha) A greement Details 1 ANTONIO 1 1/56 100% Frontera SpA 280 100% HCH Domeyko Purchase Option Agreement US$320,000 (alr eady satisfied) US$200,000 payable by April 19th 2027 US$3.480,000 payable by April 19th 2028 NSR 1% 2 A NTONIO 1/40 100% Frontera SpA 200 3 ANTONIO 10 1/21 100% Frontera SpA 63 4 ANTONIO 19 1/30 100% Frontera SpA 128 5 ANTONIO 21 1/20 100% Frontera SpA 60 6 ANTONIO 36 1/15 100% Frontera SpA 74 7 ANTONIO 5 1/40 100% Frontera SpA 200 8 ANTONIO 9 1/40 100% Frontera SpA 193 9 CAZURRO 1 100% Frontera SpA 200 10 CAZURRO 2 100% Frontera SpA 200 11 CAZURRO 3 100% Frontera SpA 300 12 CAZURRO 4 100% Frontera SpA 300 13 CAZURRO 5 100% Frontera SpA 100 14 CAZURRO 6 100% Frontera SpA 200 15 CAZURRO 7 100% Frontera SpA 200 16 CAZURRO 8 100% Frontera SpA 200 17 CERRO MOLY 1 100% Frontera SpA 300 18 CERRO MOLY 2 100% Frontera SpA 300 19 CERRO MOLY 3 100% Frontera SpA 300 20 CERRO MOLY 4 100% Frontera SpA 300 21 CAZURRO 3 1/60 100% Frontera SpA 300 22 CAZURRO 4 1/60 100% Frontera SpA 300 23 CAZURRO 7 1/40 100% Frontera SpA 200 24 EMILIO 1 1/8 100% Frontera SpA 38 25 EMILIO 3 1/9 100% Frontera SpA 45 26 INES 1/40 100% Frontera SpA 200 27 LORENA ½ 100% Frontera SpA 2 28 MERCEDITA 1/7 100% Frontera SpA 22 29 PRIMO 1 1/6 100% Frontera SpA 36 30 SANTIAGUITO 5 1/24 100% Frontera SpA 114 31 DOMINOCEROS 1/20 (1/4) 100% Frontera SpA 20 100% HCH Dominoceros Purchase Option Agreement US$1,000,000 (alr eady satisfied) US$1,000,000 payable by October 25th 2026 US$6,890,000 payable by October 25th 2027 3 2 CF SUR 1 100% Frontera SpA 300 33 CF SUR 2 100% Frontera SpA 300 34 CF SUR 3 100% Frontera SpA 300 35 CF SUR 4 100% Frontera SpA 300 36 CF SUR 5 100% Frontera SpA 200 Table 2: Current Tenement (Patente) Holdings in Chile as at 30 June 2026 (Cont’d) Domeyko Project Tenements (Cont’d) 92 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 95
16 Tenement Schedule (Cont’d) No License ID HCH % Held H CH % Earning A rea (ha) A greement Details 37 CF SUR 6 100% Frontera SpA 300 38 CF SUR 7 100% Frontera SpA 300 39 CF SUR 8 100% Frontera SpA 300 40 CF SUR 9 100% Frontera SpA 200 41 CF SUR 10 100% Frontera SpA 200 42 CF SUR 11 100% Frontera SpA 300 43 CF SUR 12 100% Frontera SpA 300 44 CF SUR 13 100% Frontera SpA 300 45 CF SUR 14 100% Frontera SpA 300 46 CF SUR 15 100% Frontera SpA 200 47 CF SUR 16 100% Frontera SpA 300 48 CF SUR 18 100% Frontera SpA 300 49 CF SUR 19 100% Frontera SpA 300 50 CF SUR 20 100% Frontera SpA 300 51 CF SUR 21 100% Frontera SpA 300 52 CF SUR 22 100% Frontera SpA 300 53 CF SUR 23 100% Frontera SpA 200 54 CF SUR 24 100% Frontera SpA 200 55 CF SUR 25 100% Frontera SpA 300 56 CF SUR 26 100% Frontera SpA 300 57 CF SUR 28 100% Frontera SpA 200 58 CF SUR 29 100% Frontera SpA 300 59 CF SUR 31 100% Frontera SpA 300 60 CF SUR 32 100% Frontera SpA 300 61 CF SUR 33 100% Frontera SpA 300 62 CF SUR 34 100% Frontera SpA 300 63 CF SUR 35 100% Frontera SpA 300 64 KRETA ¼ 100% Frontera SpA 16 The mining concession is included in SanAntonio Pur chase Option Agreement 65 MARI 1 100% Frontera SpA 300 66 MARI 1/12 100% Frontera SpA 64 The mining concession is included in San Antonio Purchase Option Agreement 67 M ARI 6 100% Frontera SpA 300 69 MARI 8 100% Frontera SpA 300 69 PAJONALES 100% Frontera SpA 300 70 PORFIADA SUR 1 1/60 100% Frontera SpA 300 71 PORFIADA SUR 2 1/60 100% Frontera SpA 300 72 PORFIADA SUR 3 1/40 100% Frontera SpA 200 73 PORFIADA SUR 4 1/60 100% Frontera SpA 300 TOTAL 16.583 Table 2: Current Tenement (Patente) Holdings in Chile as at 30 June 2026 (Cont’d) Domeyko Project Tenements (Cont’d) HOT CHILI Annual Report 2026 93
Page 96
16 Tenement Schedule (Cont’d) Table 2: Current Tenement (Patente) Holdings in Chile as at 30 June 2026 (Cont’d) El Fuego Project Tenements No License ID HCH % Held H CH % Earning A rea (ha) A greement Details 1 MERCEDES 1/3 100% Frontera SpA 50 100% HCH San Antonio Purchase Option Agreement USD 2,400,000 alr eady paid. US$2,000,000 payable by September 30th 2026 to exercise the El Fuego Option. (2 additional and conditional payments of USD 2,000,000, each one, to be paid by December 31, 2030 under certain conditions detailed at title “Tenement Changes During the Quarter” of this quarterly report.) 2 PORFIADA A 1/33 100% Frontera SpA 160 3 PORFIADA C 1/60 100% Frontera SpA 300 4 PORFIADA E 1/20 100% Frontera SpA 100 5 PORFIADA F 1/50 100% Frontera SpA 240 6 PORFIADA IX 1/60 100% Frontera SpA 300 7 PORFIADA VII 1/60 100% Frontera SpA 270 8 PORFIADA VIII 1/60 100% Frontera SpA 300 9 PRIMA 1 100% Frontera SpA 1 10 PRIMA 2 100% Frontera SpA 2 11 ROMERO 1/31 100% Frontera SpA 31 12 SAN ANTONIO 1/5 100% Frontera SpA 25 13 SAN JUAN SUR 1/5 100% Frontera SpA 10 14 SAN JUAN SUR 6/23 100% Frontera SpA 90 15 SANTIAGO Z 1/30 100% Frontera SpA 300 16 SANTIAGO 1/4 Y 20 100% Frontera SpA 75 17 SANTIAGO 15/19 100% Frontera SpA 25 18 SANTIAGO 21/36 100% Frontera SpA 76 19 SANTIAGO 37/43 100% Frontera SpA 26 20 SANTIAGO A, 1/26 100% Frontera SpA 244 21 SANTIAGO B, 1/20 100% Frontera SpA 200 22 SANTIAGO C, 1/30 100% Frontera SpA 300 23 SANTIAGO D, 1/30 100% Frontera SpA 300 24 SANTIAGO E, 1/30 100% Frontera SpA 300 TOTAL 3,725 Note. Sociedad Minera La Frontera SpA is a 100% owned subsidiary company of Hot Chili Limited. Cordillera Project 1 ALBORADA III 1/35 100% Frontera SpA 162 100% HCH Purchase Option Agreement U SD 100,000 already paid US$100,000 payable by November 14th 2026 US$100,000 payable by November 14th 2027 US$3,700,000 payable by November 14th 2028 NSR 1% for underground mining and 1,5% for open-pit mining 2 ALBORADA IV 1/20 100% Frontera SpA 54 3 ALBORADA VII 1/25 100% Frontera SpA 95 4 CAT IX 1/30 100% Frontera SpA 150 5 CATITA IX 1/20 100% Frontera SpA 100 6 CATITA XII 1/13 100% Frontera SpA 61 7 CORDILLERA 1/5 100% Frontera SpA 20 8 HERREROS 1/14 100% Frontera SpA 28 9 MINA HERREROS III 1/6 100% Frontera SpA 18 10 MINA HERREROS IV 1/10 100% Frontera SpA 23 11 PORSIACA 1/20 100% Frontera SpA 20 12 QUEBRADA 1/10 100% Frontera SpA 28 13 VETA 1/17 100% Frontera SpA 17 TOTAL 776 Note. Sociedad Minera La Frontera SpA is a 100% owned subsidiary company of Hot Chili Limited. HOT CHILI Annual Report 2026 94 HOT CHILI Annual Report 2026 HOT CHILI Annual Report 2026
Page 97
17 Corporate Directory Directors Stuart Mathews (Independent Non-Executive Chairman) C hristian Easterday (Managing Director) R oberto de Andraca Adriasola (Non-Executive Director) M ark Jamieson (Non-Executive Director) F iona Van Maanen (Independent Non-Executive Director) Company Secretary Carol Marinkovich Chief Financial Officer Ryan Finkelstein Executive Management Jose Ignacio Silva (Country Manager & Executive Vice President) G rant King (Chief Operating Officer) D avid Bayona (Project Director) Principal Place of Business and Registered Office First Floor, 768 Canning Highway APPLECROSS WA 6153 T elephone: + 61 (0)8 9315 9009 Facsimile: + 61 (0)8 9315 5004 Email: a dmin@hotchili.net.au Web: w ww.hotchili.net.au Stock Exchange Code ASX: HCH TSXV: HCH OTCQX: HHLKF Solicitors Australia Blackwall Legal LLP Level 26, 140 St George’s Terrace PERTH WA 6000 Ca nada Bennet Jones 3400 One First Canadian Place, P.O. Box 130 Toronto ON M5X 1A4 Share Registries Australia Computershare Investor Services Pty Limited Level 17, 221 St Georges Terrace PERTH WA 6000 T elephone: + 61 (0)8 9323 2000 Facsimile: + 61 (0)8 9323 2033 Canada Computershare Investor Services Inc 100 University Ave, 8th Floor Toronto ON, M5J 2Y1 T elephone: + 1 416 263 9200 Facsimile: + 1 888 453 0330 Auditors RSM Australia Partners Level 32, Exchange Tower 2 The Esplanade PERTH WA 6000 Principal Bankers Westpac Banking Corporation Hannan Street KALGOORLIE WA 6430 Na tional Australia Bank Level 12, 100 St Georges Terrace PERTH WA 6000 HOT CHILI Annual Report 2026 95 HOT CHILI Annual Report 2026
Page 98
ASX: HCH TSXV: HCH OTCQX: HHLKF www.hotchili.net.au HOT CHILI LIMITED ANNUAL REPORT 2026ACN 130 955 725