Hot Chili (ASX:HCH) agreed to grant OR Royalties a net smelter return royalty on the company's La Verde project in Chile for a cash payment of $15 million, according to a Tuesday filing with the Australian bourse.

The deal is an extension of a 2023 agreement related to the broader Costa Fuego project for a net smelter return royalty of 1% of payable copper production and 3% of payable gold production. La Verde has been added to the previous deal, bringing total OR Royalties royalty consideration to $30 million, Hot Chili said.

If a change of control event occurs before the fourth anniversary of the original agreement, the net smelter return can be reduced to a 0.5% royalty on copper and 2.5% on gold in exchange for certain payments to OR Royalties, per the filing.

"This transaction achieves two things simultaneously: it funds the advancement of La Verde without share dilution; and it gives the market a credible third-party datapoint on the value of an asset that has yet to be formally quantified," said Hot Chili Managing Director Christian Easterday.

Shares of the company fell past 10% in recent Tuesday trade.