ASX-listed mineral exploration company Hot Chili has announced a private placement of 24.9 million new shares to institutional and professional investors, with an aim to raise A$24.9m ($16.5m).

The shares, priced at A$1.00 each, were offered at an almost 20% discount to the company's last closing price and an around 18.6% discount to the ten-day volume weighted average price.

For this transaction, Veritas Securities and Cormark Securities served as joint lead managers, with BMO Capital Markets and Beacon Securities as co-managers.

The company noted that its placement attracted strong demand from Australian, Canadian, and overseas investors, including existing shareholders.

In addition to the placement, the company will also offer to all eligible shareholders the opportunity to participate in a share purchase plan (SPP) to raise up to A$5m at the same offer price as the placement.

The funds raised from the private placement and SPP, alongside existing treasury, will finance the completion of the Costa Fuego pre-feasibility study, water supply business case study, and its environmental impact assessment.

It will also be used for ongoing exploration, drilling, and consolidation activities, as well as for general working capital needs.

Hot Chili managing director Christian Easterday said: “We control large-scale assets in two of the most critical commodities of our time – copper and water – with two of the most desirable attributes – low-risk and near-term.

“The Placement and Share Purchase Plan maintain the Company’s strategic funding optionality, while ensuring Costa Fuego remains one of a limited number of globally significant copper developments, not owned by a major mining company, that could deliver meaningful new copper supply this decade.

“Market conditions are indicative of the initial stages of a new copper price cycle being driven by a lack of new supply. The Company is now well funded to take advantage of controlling the right assets at the right time in the right place.”