Challenger signs mining deal to launch gold operations at Argentina’s Hualilán project

• Challenger executes MAPAL mining contract, with operations on track to start December 1
• Blast drilling and blasting progressing, with contractors already active on site and the maiden blast completed overnight
• Toll milling phase to fund development of Hualilán as a standalone gold producer

Special Report: Challenger Gold is now firmly on the road to starting gold production at its flagship Hualilán project in Argentina’s San Juan province with its entry into a 24-month mining services contract.

Under the contract, MAPAL Constructions and Mining will carry out load and haul, auxiliary works, and run-of-mine handling activities associated with the movement of about 3.37Mt of material under the toll-milling phase.

Mobilisation to site began in late October 2025 under a mutually agreed early-works authorisation that was issued after both parties settled commercial terms and were finalising minor schedule details.

This is now complete with preparatory activities progressing through November 2025 while production mining activities remain on track to start formally on December 1, 2025.

Challenger Gold (ASX:CEL) selected MAPAL – one of Argentina’s largest mining contractors – for its extensive experience in mining and civil construction across San Juan province, and its strong track record in safety, community engagement and operational performance.

Engaging a proven local contractor leverages MAPAL’s established workforce and fleet, helping de-risk operational start-up and underpin reliable early production outcomes.

Operations at Hualilán are progressing on schedule with first mining on track to start on December 1, 2025.

Blasthole drill contractor THOR has mobilised to site and started drilling operations.

Reports from the site team indicate that drilling is achieving penetration rates at or above expectations – an encouraging and strong early operational outcome.

Meanwhile, Orica has started explosive charging activities on site with the first multi-pattern blast completed overnight in Argentina.

Hualilán project in focus

Hualilán sits within San Juan province which is known for being the most pro-mining province in Argentina and its gold producing strength.

The project has a resource of 2.8Moz gold equivalent and includes a high-grade core of 1.6Moz at 5g/t gold.

A toll-treatment Pre-Feasibility Study (PFS) released this year confirmed robust economics, including life-of-mine EBITDA forecast at US$143m and pre-tax NPV of US$123m based on a gold price of US$3,300/oz.

EBITDA increases to US$195m using a US$4000/oz gold price, which is just under current spot prices of ~US$4077/oz.

Material from the mine will be processed at Austral Gold’s Casposo plant about 165km away by road under a toll milling agreement that secures processing of at least 450,000t of near-surface material over three years.

Casposo historically produced over 323,000oz of gold and 13.2Moz of silver, achieving average annual production of 40,000oz gold and 1.6Moz silver at recoveries of 90% and 79% for gold and 79 silver respectively. 

It was previously on care and maintenance and recommenced commercial processing operations in October 2025.

CEL is currently working on a PFS for the standalone development of Hualilán, which is on track for delivery in Q1 2026.

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