Challenger Gold gets green tick from San Juan Government at Hualilán

Challenger Gold granted environmental approval for Hualilán gold project
First gold project to be approved in San Juan project in 17 years
Company recently signed toll mining agreement for project

Special Report: Challenger Gold has welcomed Environmental Impact Assessment approval for its Hualilán gold project – the first gold project in Argentina’s San Juan Province to receive EIA approval in 17 years.

This approval demonstrates the company’s commitment to environmental and social responsibility – and is a significant milestone with Hualilán now fully permitted for construction, development and production.

Hualilán is one of the largest undeveloped gold projects in Argentina hosting an estimated resource of 2.8Moz gold equivalent that extends over 2.2km of strike.

More than 75% of the resource is in the indicated category and contains a high-grade core of 9.9Mt at 5g/t gold equivalent (for 1.6Moz gold equivalent). That will provide significant flexibility when it comes to starting a development.

Last year’s scoping study, based on the high-grade core only, forecast an average annual production target of 116,000oz gold, 440,000oz silver and 9175t zinc.

It also flagged the project is in the lowest-quartile C1 cash cost of US$527/oz ($811/oz) and AISC of US$830/oz ($1265/oz), with an EBITDA of US$738m ($1.1 billion) over life of mine and a rapid payback period of under 1.25 years at US$1750/oz gold.

Spot gold prices are current around US$1000/oz higher than the price used in the study.

Targeting production via toll mining in H2 2025

The EIA is also particularly timely, given the Challenger Gold’s (ASX:CEL) recent announcement around a toll milling startup and a strategic A$6.6m private placement with existing shareholder Dolphin Real Assets Fund SPC.

Toll milling is expected to accelerate the timeline to bring Hualilán into production and capitalise on record gold prices to generate early cash flow.

The Toll Milling Agreement would guarantee CEL a minimum of 450,000t of processing capacity over three years, enabling it to process high-grade near surface Hualilán ore containing approximately 85,000oz of gold and 495,000oz silver.

“This approval establishes a new standard in mining, combining economic development with environmental protection and social benefit for San Juan,” CEL executive director Dr Sonia Delgado said.

“Challenger chose San Juan not by chance, but by conviction – a province that offers not only legal security and institutional support but possesses exceptional human capital and over a century of mining tradition.”

“The approval process was led by local professionals, demonstrating that San Juan’s talent meets the highest international standards.

“We will be an example of modern mining, with 71 specific environmental commitments that we view as our promise to the people of San Juan who have seen us grow.”

The company has made strong social commitments including prioritising local employment with focus on San Juan residents, a community development program, and a technical training program for local students, along with promoting the participation of local and regional suppliers.

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.