Challenger Gold Limited (ASX: CEL) has confirmed that the refurbishment of its Casposo Processing Plant in San Juan, Argentina, is progressing as planned, with all key workstreams advancing on schedule. This marks a significant milestone for the company as it prepares to capitalise on high gold and silver prices, generating early cash flow to fund the development of the standalone Hualilan Gold Project. With critical milestones met and validation from an independent inspection, CEL is on track to meet its commissioning target in the second half of 2025, positioning the company as a low-cost, high-margin gold and silver producer.
Figure 1: Hualilan Gold Project
Project Progress
The refurbishment workstreams, covering crushing, grinding and classification, leaching, solid-liquid separation, Merrill Crowe, and refining systems, are all advancing as planned. A team of process engineers who carried out the audit and restart plan in December 2024 independently verified the plant’s progress. Their latest inspection report, received in April 2025, confirms that the refurbishment is proceeding on schedule, aligning with the update from Austral Gold Limited.
Inspection Validation
In March 2025, CEL commissioned a second independent inspection conducted by the same process engineering team that completed the 2024 Audit and Restart Plan. This inspection confirmed robust progress across all key processing areas. Notably, the solid-liquid separation capacity, previously identified as a risk, is now deemed adequate for the plant’s required throughput of 1,000 tonnes per day (TPD). The inspection found that this area is already 28% complete, and it remains on track to meet the commissioning target in the second half of 2025.
Toll Milling Agreement
Challenger Gold has secured a binding Toll Milling Agreement with Casposo Argentina Mining Limited, which ensures processing of at least 450,000 tonnes of near-surface Hualilan material over the next three years. The Casposo Plant, located 170 km from Hualilan, has a proven production history, having produced 323,000 ounces of gold and 13.2 million ounces of silver historically. The plant achieved an average annual production rate of 40,000 ounces of gold and 1.6 million ounces of silver, with recoveries of 90% for gold and 79% for silver.
Refurbishment Progress
Key refurbishment milestones have been achieved, including:
- Inspection Phase Completion: The inspection phase has been finalised, and procurement needs have been aligned with warehouse inventory.
- Crushing Circuit (Area 100): Mechanical, electrical, and fabrication works are finalised and ready for commissioning.
- Leaching Tank Reducers (Area 300): 100% of leaching tank reducers have been refurbished and are ready for installation.
- Leaching Tank Cleaning: 80% of the accumulated solids have been removed from the leaching tanks.
- Thickeners and CCD (Area 400): Milling thickeners and counter-current decantation systems have been repaired and are ready for commissioning.
- Belt Filter Refurbishment: Sandblasting and painting of belt filters are 80% complete.
- Process Water System (Area 900): Refurbishment of the process water pumping system has been completed.
- Electrical Cabling (Area 400 and 500): Electrical room reorganisation and cleaning have been completed in key areas supporting CCD, filtration, and Merrill Crowe systems.
- Electric Motor Maintenance: 80% of testing and servicing is complete for the plant’s electric motors.
- Valve Replacement (Area 400): In the CCD and filtration areas, 40% of valves have been replaced.
Identified Risks
The primary risk to the refurbishment timeline is potential delays in the delivery of key equipment, particularly for imported components. Additionally, achieving the targeted P80 grind size of 75 microns with a single-stage SAG mill configuration continues to be monitored. However, CEL’s metallurgical testwork suggests that recovery losses are minimal at a grind size between 100 and 120 microns. Further operational simulations are planned to assess the ability to meet the grind size target by adjusting hydrocyclone and feed pressure settings.
Hualilan Gold Project: A Promising Mining Opportunity in San Juan, Argentina
The Hualilan Gold Project is located in the San Juan province of Argentina, renowned for its rich deposits of gold and copper. Positioned about 120 km north-northwest of San Juan, the project benefits from easy access through a mix of sealed and unsealed roads and strong government support from a proactive mining ministry. The mineralisation at Hualilan primarily consists of zinc skarn with a gold overprint, and extensive exploration has been conducted, including over 900 drill holes by Challenger Gold and 188 historical holes. The 2023 Mineral Resource Estimate (MRE) for the project stands at 2.8 million ounces of gold equivalent (AuEq), with a high-grade core of 1.6 million ounces at 5.0 g/t AuEq. Covering 600 square kilometres of tenements, with 235 square kilometres granted and the rest pending, the project is also situated in a geologically rich area with potential for both gold and copper production.
Investor Outlook
As of 30 April 2025, Challenger Gold’s shares closed at A$0.081, up by 1.25% on a volume of 1,076,796 shares, with a bid-offer range of A$0.081–A$0.082 and a market capitalisation of A$135.01 million. The company has 1.688 billion shares on issue, 161 million options, and 49.5 million performance rights. The low-capex toll milling strategy is expected to generate early cash flow by late 2025, enabling the company to fund the development of the Hualilan Gold Project. The successful completion of refurbishment, coupled with early revenues from toll milling, is anticipated to strengthen investor confidence and could support a re-rating of CEL’s valuation as commissioning nears.
Metal Market Outlook
Gold prices continue to trade above US$3,300 per ounce, which is equivalent to approximately A$5,000 per ounce, driven by continued geopolitical uncertainty, inflationary concerns, and central bank buying. Silver prices are trading near US$40 per ounce, or around A$60 per ounce, bolstered by strong industrial demand—especially in solar photovoltaics, electric vehicles, and battery storage—and continued investment flows into the precious metal market.
These favourable metal pricing dynamics enhance the economics of the toll-milling plan and support the long-term investment case for the Hualilan Gold Project. The strong Australian dollar pricing environment for both gold and silver provides a significant opportunity for Challenger Gold to capitalise on high margins from its toll milling operations and future production.
About Challenger Gold Limited
Challenger Gold Limited (ASX: CEL) is an Australian-based gold and copper exploration company focused on becoming a globally significant gold producer. The company is advancing two key projects in South America: the Hualilan Gold Project in San Juan, Argentina, a 100% owned, high-grade gold project with a 2.8 million ounce resource estimate, and the El Guayabo Project in Ecuador, also 100% owned, with a 9.1 million ounce gold equivalent resource estimate, offering significant growth potential. Challenger Gold is dedicated to developing these projects with a focus on delivering low-capex, high-margin production and aims to become a leading gold producer in the region.
