Challenger Gold finalises toll milling agreement with Casposo Argentina Mining

A binding toll mining agreement with Casposo Argentina Mining has been reached
It confirms an annual processing capacity of 150,000tpa for three years
The $6.6m investment is also nearing completion

Special report: Challenger Gold has entered into a toll mining agreement with Casposo Argentina Mining, guaranteeing the processing capacity of 150,000tpa over three years.

A total secured capacity of 450,000t has been decided, with the agreement involving the provision of working capital to cover mining, trucking and processing costs until Challenger Gold (ASX:CEL) 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
Includes a safeguard, with the upfront payment being refundable if the plant is not operating by July 31, 2025.

In parallel, CEL’s previously announced $6.6M strategic investment continues to progress, with subscription agreement terms finalised.

One of the biggest gold resources on the ASX

Javier Milei is turning Argentina into a mining investment hotspot, with his free-market approach and overhaul of mining impediments leaving the industry buzzing.

Challenger’s gold-silver-zinc Hualilan project in San Juan is one of the biggest on the ASX, boasting 2.8Mt on a gold equivalent basis.

The asset’s mix of metals means it benefits from the broad sweep of price rises for precious metals and base metals. Gold held above US$2640/oz on Wednesday, increasing by US$586.82 or 28.45% since the beginning of the year.

Pathway to production

CEL remains focused on advancing critical workstreams to begin toll milling operations.

Over the coming months, the company plans to finalise operational procedures with the mill operator to support the execution of the toll milling agreement, expected within 15-20 days, and subsequent closure of the strategic placement.

The completion of open pit mining designs will take place, with mining schedules expected in 10 days.

And ongoing evaluation of contract mining and owner-operated options will follow, leveraging long-term rental equipment availability in San Juan.

This structured approach ensures a clear pathway to production while maintaining operational flexibility and financial discipline.

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.