- 01CEL targets 2029 Hualilán first production.
- 02PFS: 1.8 Moz AuEq; 14.25-yr life; capex US$267m; NPV US$1.1b; IRR 35%.
- 03Fully permitted; progress via camp, roads.
Challenger Gold (ASX: CEL) has outlined a clear development roadmap for its Hualilán project in Argentina, identifying strategic priorities and near-term catalysts to support commercial production from the standalone Phase 1 heap leach operation by early 2029.
The company’s new leadership team has established a plan to accelerate production through a combination of technical, exploration, project financing, and execution initiatives, underpinned by a recent pre-feasibility study.
The PFS highlighted the unique opportunity for near-term production from a fully permitted low-capex, large-scale development project in one of South America’s top-ranked mining jurisdictions.
The team is now bringing forward expenditure on engineering and earthworks related to construction of a mining camp, access roads, and main gate to support an accelerated development schedule in parallel with optimisation and growth initiatives to progress Hualilán along the critical path to first production.
Staged Development Approach
Released in May, the Hualilán PFS outlined production of 1.8 million gold equivalent ounces over a 14.25-year mine life, averaging 135,000oz gold equivalent per year after the first two years.
Comprising an initial heap leach operation followed by the addition of a flotation circuit approximately two years later, Challenger expects the staged development approach to reduce its pre-production capital requirements to approximately US$267 million (including contingency), while generating $1.1 billion in post-tax net present value and a 35% post-tax internal rate of return over a 2.25 year payback period, assuming a gold price of US$3,500 per ounce.
At a gold price of $4,500/oz, the post-tax NPV would increase to $1.8b over a reduced payback period of 1.25 years.
Based on these outcomes, Challenger has developed an integrated development plan to progressively de-risk the Phase 1 heap leach development and support the achievement of first production by 2029.
Pathway to Production
“Our objective is clear—to transition Hualilán from a development asset to a producing gold operation,” the company said.
“With a fully permitted project, a robust PFS, and a strengthened leadership team, we believe Hualilán has a compelling pathway to commercial production.
“The priorities outlined today provide a structured framework to support that objective while preserving the significant long-term growth opportunities across the broader Hualilán district.”
At end June, small-scale mining activities had stockpiled 79,897 tonnes of ore at an average grade of 0.72 grams per tonne gold for future processing and Challenger said it was in talks regarding a potential transition to an ore purchase agreement.
New Drilling Campaign
Challenger has launched a 35,000-metre drilling campaign, including 5,500m of geotechnical drilling, to expand the Hualilán resource and reserves base, convert mineral resources to ore reserves, and support mine plan optimisation.
Four rigs are currently in operation at the site, with initial work focused on targeting extensions to known mineralisation around the existing open-pit footprint.
Improved geological understanding is expected to create opportunities to convert in-pit material currently classified as waste into economically recoverable ore, and offer additional resource growth opportunities across the broader Hualilán district.
The company is targeting an exploration update before year end following the receipt, interpretation, and validation of initial drilling results, with updated mineral resource and ore reserve estimates in the second half of 2027.
RIGI Investment Application
Challenger is progressing an application for Argentina’s large investment incentive regime (RIGI) with potential to materially enhance Hualilán’s fiscal and financing framework.
Qualification under the regime provides a range of benefits including a reduced corporate income tax rate of 25%, accelerated depreciation, indefinite carry-forward of tax losses, select customs and tax exemptions, and flexibility over foreign exchange access for export proceeds.
RIGI is designed for projects with capital investment exceeding US$200m where more than 40% has been committed within the first two years and could enhance project economics, strengthen financing attractiveness and support development activities.
Challenger believes approximately US$30m of historical investment at Hualilán may qualify toward the RIGI threshold, and anticipates feedback on its application in the first half of 2027.
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