Challenger Gold Limited (ASX: CEL) (OTCQB: CLLEF) is steadily advancing its position in the Australian gold exploration market, with its flagship Hualilan Gold Project in Argentina moving toward near-term production and a defined 2.8-million-ounce resource. Optimised mine scheduling has boosted processing grades, with initial mining set to extract 150,000 tonnes at 8.7 g/t Au and 34.5 g/t Ag, reinforcing Hualilan’s high-grade potential. Meanwhile, the Casposo Toll Mill refurbishment is progressing, and a fast-tracked Pre-Feasibility Study (PFS) remains on schedule for March 2025.
Figure 1: Drilling site
Building on this momentum, Challenger has secured a $6.6 million strategic investment from Inversiones Financieras del Sur S.A. (IFISA), part of the Elsztain Group controlled by Eduardo Elsztain, making him the company’s largest shareholder with a 12.7% stake. The deal, comprising 147.7 million shares at 4.5 cents each and two-year share purchase warrants, signals strong confidence in Challenger’s trajectory. With high-grade production imminent and institutional backing secured, Challenger Gold is positioning itself as a breakout growth story in the global gold sector.
Mr Kris Knauer, Managing Director and CEO of Challenger Gold Ltd, commented:
“This strategic funding will enable the Company to fast-track the Hualilan Gold Project and move closer to production, benefiting from the expertise and network of Mr. Elsztain.”
The 100%-owned El Guayabo Project in Ecuador also significantly enhances Challenger’s portfolio. It hosts a 4.5-million-ounce gold-equivalent resource with strong bulk-tonnage potential. Ongoing drilling aims to expand the deposit, further enhancing the project’s potential.
Figure 2: Company Project Portfolio
With a focus on rapid development, early cash flow, and large-scale resource growth, Challenger is on a fast track to becoming a significant force in gold and energy.
Hualilan Gold: Argentina’s Next High-Grade Powerhouse
The Hualilan Gold Project stands among world-class deposits like Josemaria and Filo del Sol in San Juan Province, Argentina’s premier gold region. Spanning 600km² tenement package, it boasts strong infrastructure, year-round operations, and government support, making it an ideal investment destination.
Figure 3: MRE with various cut-off grades
With a JORC-compliant 2.8Moz (AuEq) resource, including 1.6Moz at 5.0 g/t AuEq, Hualilan ranks as one of Argentina’s most promising gold assets. Historical drilling and a 220,000m campaign by Challenger Gold highlight its immense growth potential, with Challenger adding over 2 million ounces to the previous exploration, identifying 627,000oz at 13.7 g/t gold.
Figure 4: Hualilan Gold Project
Geologically, Hualilan features zinc skarn-hosted mineralisation, overprinting gold-silver systems, and extensive skarn alteration, suggesting further high-grade expansion potential. With the deposit open in multiple directions, ongoing exploration aims to unlock additional resources.
With a Pre-Feasibility Study (PFS) underway, 30km of underexplored stratigraphy, and substantial metallurgical progress, Hualilan is on track to become a significant gold producer.
Toll Milling Advancing Towards Production at Hualilan
Challenger Gold continues to advance its Hualilan Gold Project, achieving key milestones on schedule. The final open-pit mine design has resulted in a 10% increase in average grade, enhancing project economics. Initial mining will extract 150,000 tonnes at 8.7 g/t Au and 34.5 g/t Ag, prioritising high-value material for toll milling. Three of the four planned pits will suffice, ensuring operational flexibility and 120,000 tonnes in reserve.
An upfront payment of US$2 million has been made, with a further US$1 million due in two years. The agreement also includes a fixed monthly fee of US$110,000 for US$8.80/t from the start of Toll Mining and an incentive-based performance fee of 20-30% linked to gold recovery rates expected to range between US$12-18/t.
Figure 5: 3D view of Hualilan showing Toll Milling pits and site layout
Austral Gold Limited (ASX: AGD) began refurbishing the Casposo Toll Mill after bank funds were released in December 2024. Casposo Plant will be operational by July 31, 2025.
Austral Executive Chairman Mr Stabro Kasaneva stated:
“Austral Gold is pleased to execute this agreement, which creates a new revenue stream for Austral while supporting Challenger’s production goals.”
Challenger has accelerated its study approach, advancing directly to a Pre-Feasibility Study (PFS), scheduled for completion by March 2025 and aligning with JORC and NI 43-101 standards.
Key contracts, including contract mining, haulage agreements, and toll mill process cost modelling, are nearing finalisation. Metallurgical test results are expected by February 2025. With high-grade material, optimised scheduling, and strong execution, Challenger Gold can generate early cash flow and drive production forward, providing a promising outlook for our financial performance. As key milestones are met, further updates will follow.
El Guayabo Gold Project: Ecuador’s Emerging Bulk Gold Giant
Challenger Gold’s El Guayabo Gold Project spans seven El Oro Province, Ecuador, tenements, demonstrating significant bulk-tonnage gold potential. Drilling has confirmed over 500 metres of mineralisation across multiple anomalies, highlighting the project’s potential. Strategically located near Machala and Puerto Bolivar, the site benefits from strong infrastructure, ensuring year-round operations.
Figure 6: Showing the Company’s concessions, which comprise the El Guayabo Project, Ecuador
The Company’s 100%-owned El Guayabo concession, initially explored by Newmont, has returned impressive intercepts, including 257.8m at 1.4 g/t AuEq and 309.8m at 0.7 g/t AuEq. The Colorado V concession, where the Company earns a 50% stake, has yielded significant discoveries, with 528.7m at 0.5 g/t AuEq from the surface. Additional tenements, including El Guayabo 2 and Cerro Pelado, offer further expansion potential.
A maiden JORC (2012) Mineral Resource Estimate confirms 4.5Moz AuEq, with a high-grade core of 1.5Moz at 1.0 g/t AuEq. The deposit remains open, presenting strong upside potential.
The Company recently completed a second drill program designed to allow the reporting of a maiden JORC Resource on the adjoining Colorado V concession. Challenger is earning an initial 50% interest. This resource is expected to be released in the current quarter. Ongoing drilling will focus on expanding the resource and testing priority targets. With a robust foundation and continued exploration success, El Guayabo is emerging as a significant gold discovery in Ecuador, offering substantial long-term value.
Kris Knauer: Experienced Leader Driving Challenger Gold’s Growth
Kris Knauer, CEO and Managing Director of Challenger Gold, has extensive experience in exploration geology, investment banking, and executive leadership. He began his career as an exploration geologist and later transitioned into investment banking as a mining analyst, gaining deep insights into resource markets and project valuations.
Figure 7: Mr Kris Knauer, Managing Director and CEO
As a seasoned listed company CEO, he played a pivotal role in creating Citadel Resources (ASX: CGG), leading the listing of a portfolio of copper-gold assets in Saudi Arabia. Under his leadership, Citadel advanced the Jabal Sayid copper project through a Definitive Feasibility Study (DFS), culminating in a $1 billion takeover. With a proven track record of unlocking value in resource projects, Knauer now spearheads Challenger Gold’s strategy, driving its South American gold assets toward production and large-scale resource expansion.
Strong Catalysts Ahead in 2025 for Investors
Challenger Gold is positioned for significant value growth with key developments in its Huallian and Ecuador assets. Fundamentals of the Company highlights a notable disconnect between its market valuation and the fundamental value of its assets, with the Huallian Project’s NPV exceeding $600 million against a market cap of approximately $100 million. Additionally, no value has been attributed to its Ecuador assets, which hold 4.5Moz AuEq, presenting a strong upside potential. The company also sees potential for a positive surprise in the Huallian Pre-Feasibility Study (PFS), alongside Argentina’s evolving economic landscape, further strengthening its outlook. With gold remaining a favourable commodity, Challenger Gold is well-positioned for growth in the coming years.
Gold prices remain strong, hovering near record highs due to persistent inflation concerns and continued central bank buying. At the same time, copper is gaining momentum, with forecasts predicting a structural supply deficit driven by increasing demand for electrification, renewable energy, and global infrastructure projects. This dual market strength is expected to enhance the Company’s financial performance and create significant upside potential, ultimately delivering long-term value to its shareholders.
At the close of 17 February, the Company traded at $0.054. It has a market cap of $89.45M and 1.69 billion ordinary shares. Over the past year, the stock has traded between $0.037 and $0.099, reflecting volatility and strong investor interest. With a P/E ratio of 0.98, the Company remains undervalued relative to its peers, presenting a compelling entry point for investors.
