Approval lights turn green for Challenger Gold to launch Hualilan toll milling

• Challenger Gold receives final EIA amendment to truck ore from Hualilan project to Casposo processing plant
• Amendment also enables key mining and drill and blast contracts to be executed in the coming weeks
• Toll mining expected to generate EBITDA of $136 million on prices of US$2500/oz for gold and US$27.50/oz for silver
• At US$3300/oz for gold this increases to EBITDA of $221 million

Special Report: Challenger Gold has passed a major milestone before starting toll treatment from its Hualilan project in Argentina with the approval received for its Environmental Impact Assessment amendment.

The amendment to the EIA sought approval for the trucking of ore from the project to the third-party Casposo plant.

It marks the final government approval Challenger Gold (ASX:CEL) requires to enable toll mining, which will batch-treat Hualilan ore at a rate of about 25,000t per month under a three months on and three months off schedule with the entire toll program lasting 33 months.

This is expected to generate EBITDA of A$136 million, a post-tax NPV of US$50.5m and cumulative post-tax-free cash flow of US$56.7m using conservative spot prices of US$2500/oz for gold and US$27.50/oz for silver.

Gold is currently trading well above the US$3800/oz mark with spot prices last at US$3836/oz while silver commands a price of about US$46.84/oz, meaning the company could easily realise far higher returns.

The agreement also covers just 3% of the current 2.8Moz resource at the project.

CEL notes the terms of the amendment are as anticipated and in line with the ore haulage assumptions used in its pre-feasibility study for toll milling released in June 2025.

It also enables key mining and drill and blast contracts to be executed in the coming weeks.

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Toll milling

CEL executed the toll milling agreement with Casposo Argentina – the Argentinean subsidiary of Austral Gold (ASX:AGD) – to capitalise on the current high gold price and generate early cash flow.

The Casposo plant, which sits 165km from Hualilan via established roads, is being refurbished with work proceeding as planned.

It historically produced more than 323,000oz of gold and 13.2Moz of silver. During operations, it achieved average annual production of 40,000oz Au and 1.6Moz Ag at recoveries of 90% and 79% respectively.

Casposo is expected to be available for toll processing of Hualilan material from November 2025, which is in line with CEL’s schedule.

Cashflow from the agreement will be allocated towards the construction of the larger standalone Hualilan gold project, which boasts a high-grade core of 1.6Moz at 5g/t gold.

This article was developed in collaboration with Challenger Gold, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.