Challenger Gold Limited (ASX: CEL) (OTCQB: CLLEF) has taken a major step toward production at its Hualilan Gold Project in San Juan, Argentina, following the successful completion of key mining and processing milestones. The Company’s latest advancements signal strong momentum as it prepares to commence Toll Milling operations, bolstering investor confidence and positioning itself for significant near-term gold production.
Figure 1: Hualilan Gold Project
Mining and Processing Breakthroughs Propel Hualilan Forward
Challenger Gold has finalized its open-pit mine design and optimized mining schedules, delivering a 10% grade increase over initial projections. The first 150,000 tonnes of material mined will average 8.7 g/t gold (Au) and 34.5 g/t silver (Ag), with over 90,000 tonnes of Toll Milling material set for processing within the first three months of operations.
The revised mine plan offers greater flexibility by requiring only three of the four initially planned pits, reducing risk and unlocking an additional 120,000 tonnes of Toll Milling material for future processing.
Figure 2: 3D view of Hualilan showing Toll Milling pits and site layout
With its Pre-Feasibility Study (PFS) on track for completion in March 2025, Challenger Gold is now in a prime position to transition from exploration to production.
Toll Processing Agreement and Strategic Investment
Challenger Gold has secured a three-year Toll Processing Agreement with Casposo Argentina Mining Limited, a subsidiary of Austral Gold Limited, ensuring access to 150,000 tonnes of processing capacity per year, totaling 450,000 tonnes over the contract period. To facilitate the agreement, Challenger Gold has made an upfront payment of USD 2 million, while Austral Gold has secured an USD 7 million million loan from Banco San Juan S.A. in Argentina to fund the Casposo Plant refurbishment, ensuring operational readiness.
In addition, Challenger Gold completed a strategic placement of $6.6 million with Inversiones Financieras del Sur S.A. (IFISA), making IFISA the Company’s largest shareholder with a 12.7% stake. This investment strengthens the Company’s financial position as it advances toward production.
Casposo Plant Refurbishment Gains Momentum
The Casposo Toll Milling plant refurbishment is progressing at pace, supported by funding from a local Argentine bank secured in late December 2024. Critical equipment repairs are well underway, ensuring that the facility will be fully operational for ore processing.
Independent technical audits confirm that the Casposo Plant is in good condition, with expected gold recovery rates exceeding 90% and a recommended processing capacity of 300,000 tonnes per annum (tpa) for optimal efficiency.
CEO Speaks on Strategic Advancements
Mr Kris Knauer, CEO and Managing Director of Challenger Gold, underscored the significance of these developments:
“We are rapidly progressing toward being mining and Toll Milling ready, with all key workstreams on schedule. Completing the Toll Milling pit design and mining schedules marks a major milestone, allowing us to finalize contract mining and haulage agreements.
Our refined mining schedule not only improves grade by 10%, but also prioritizes high-grade production in the early phase, front-loading cash flow. Additionally, the ability to defer one pit provides further operational flexibility, ensuring sustained processing efficiency. With Austral Gold confirming steady progress on Casposo plant refurbishment, we remain on track for Toll Milling commencement.”
Key Operational Updates
Challenger Gold continues to hit major operational milestones, including:
- Finalized Geology and Resource Analysis, Mining Schedules, and Pit Design.
- Metallurgical Testing nearing completion, with final results expected by February 2025.
- Processing Cost Model and Contract Mining negotiations in final stages.
- Updated Labor and Economic Models optimized for maximum efficiency.
- Mining and haulage contracts being finalized, ensuring operational readiness.
Figure 3: Final Toll Mill Scheduled Open Pit Physicals (6-month intervals)
Next Steps: The Road to Production
Challenger Gold’s immediate focus remains on completing its Pre-Feasibility Study (PFS) by March 2025, finalizing contract mining and haulage agreements, and concluding the Casposo plant refurbishment.
With an optimized mine schedule, strong financial positioning, and an operationally ready Toll Milling facility, Challenger Gold is poised for a significant production ramp-up. The Company’s structured approach, coupled with rising gold prices, positions it as a formidable emerging gold producer in Argentina.
Additionally, the Company is evaluating potential Toll Milling capacity expansions beyond the initial agreement, ensuring long-term production scalability. As the Company progresses toward first processing, it remains committed to delivering early cash flow, optimizing costs, and maximizing shareholder value.
Stock Performance and Market Confidence
Challenger Gold’s stock has experienced a strong upward trajectory, closing at AUD 0.059 per share on February 23rd, 2025, within a tight trading range of AUD 0.057 – 0.059. The Company’s market capitalization stands at AUD 87.76 million, with a four-week average trading volume of 1.25 million shares.
Gold prices remain above AUD 2,950 per ounce, providing a robust foundation for Challenger Gold’s growth strategy. Shares have surged 13.46% in the past week and 18.00% over the last month, with a year-to-date (YTD) gain of 25.53%.
About Company
Challenger Gold Limited (ASX: CEL) is a gold and copper exploration company with ambitions to become a globally significant gold producer. The Company is developing two complementary projects in South America, including the Hualilan Gold Project in Argentina, which recently announced a 2.8-million-ounce resource estimate, and the El Guayabo Project in Ecuador, where a 4.5-million-ounce maiden resource estimate was established.
Figure 4: Company Projects
Challenger Gold’s strategy is to develop Hualilan as a high-grade, low-capex operation in the near term, while advancing toward larger-scale bulk gold production at both Hualilan and El Guayabo.
