Challenger closes in Hualilan gold toll treatment

• Challenger Gold on track to start toll treatment of Hualilan oxide material in second half of 2025
• Toll treatment partner Austral Gold making good progress on refurbishment of its Casposo plant
• Gold production through Casposo will allow company to capitalise on current high gold prices

Special Report: Challenger Gold’s plan to produce gold from its Hualilan project in Argentina via toll treatment at Austral Gold’s Casposo plant remains on track to start in the second half of 2025.

Austral’s refurbishment of its processing plant is on track for the start of commercial operations this year aligning with the results of a second independent plant inspection that Challenger Gold (ASX:CEL) received in April 2025.

Under the agreement with Austral, the company will mine and truck 150,000tpa of near-surface oxide material from Hualilan to the Casposo plant for three years.

This includes the provision of working capital to cover mining, trucking and processing costs until the company begins receiving cash flow.

Highlights include:

• A base toll processing fee of US$8.80/t with a monthly minimum payment of US$110,000
• Upfront payment of US$2m with US$1m deferred until the second year, equivalent to US$6.67/t
• A performance incentive-based fee of 20-30% of milling costs depending on recovery rates, expected to range between US$12-18/t; and
• A safeguard, with the upfront payment refundable if the plant is not operating by July 31, 2025.

Casposo plant

The Casposo plant is about 170km from Hualilan via established roads.

It has historically produced 323,000oz of gold and 13.2Moz of silver with average annual output of 40,000oz gold and 1.6Moz silver at recoveries of 90% and 79% respectively.

Austral has completed the inspection stage to identify procurement needs and align them with existing warehouse inventory.

It has also dismantled major equipment such as leaching tank reducers, mill motor, hydrocyclones and impeller blades, and sent them for evaluation and repair.

To date, work on the crushing circuit has been completed while the leaching tank reducers have been repaired and are awaiting installation.

Likewise, the milling thickeners and counter current decantation systems have been repaired and are ready for commissioning while refurbishment of the process water pumping system has been completed.

Other works underway include cleaning of the leaching tanks, refurbishment of the belt filters and maintenance of the electric motor which are all at about 80% completion.

Producing gold through Casposo will enable CEL to capitalise on sky high gold prices that are currently above US$3300/oz to generate early cashflow.

Listen: Kris Knauer chats with Barry FitzGerald

In a previous instalment of the Explorers Podcast, host Barry FitzGerald spoke with CEL managing director Kris Knauer, about the company’s progress at Hualilán in Argentina, which is fast approaching mining and toll milling readiness.

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.