After an almost 12 month hiatus, Challenger Exploration (ASX: CEL) has been reinstated to official quotation this morning with $5 million in cash and a new leadership team to advance the “exciting” Hualilan gold project in Argentina and the El Guayabo copper and gold asset in Ecuador.
As part of its readmission to the ASX, the formerly gas focused explorer has emerged with two new projects to advance in South America after raising the $5 million via the issue of 166 million shares at $0.03 each at the end of May.
In February this year, Challenger revealed it had entered a binding condition agreement to acquire 75% of the Hualilan project and 100% of El Guayabo by securing AEP Corporation Pty Ltd for 180 million ordinary shares, 78.4 million options and a further 120 million in performance shares.
Hualilan gold project
Speaking with Small Caps, Challenger managing director Kris Knauer said the company was currently awaiting assays from an underground channel sampling program at Hualilan.
He said the program was designed to validate historically defined mineralisation at the project.
Hualilan is only 500m from a sealed highway and power lines are under construction 2km from the project.
The asset is also near major gold operations in the region and comprises granted mining leases and a surrounding exploration licence application totalling almost 27 square kilometres.
La Mancha resources was the last company to explore the project, which resulted in a non-JORC foreign resource of 647,809 ounces of gold, with mineralisation remaining open in most directions.
Gold and base metals have been found at 19 sites over 4km of strike at Hualilan.
Additionally, there is around 6km of underground workings at the project that pass through the Cerro Norte and Cerro Sur zones.
Exploration at the project dates back to the 1970s and includes at least 150 drill holes.
Mr Knauer said once the results are known from the channel sampling campaign, the company will carry out two rounds of drilling, with drilling designed to produce a JORC resource.
El Guayabo copper-gold project
Over in southern Ecuador, Challenger is hoping to unlock El Guayabo’s potential, with Newmont Mining Corporation and Odin Mining and Exploration being the last companies to explore the asset during the mid-to-late 1990s.
Mr Knauer said the company is waiting on results from a 3D geophysical survey and re-assayed old drill core, as well as surface and underground sampling and mapping.
Previous drilling unearthed thick copper, gold and silver intersections greater than 100m.
Multiple targets have been identified at El Guayabo, which is located 36km from Machala – the capital of El Oro Province.
Challenger plans to firm up targets with further geophysics prior to start drilling in the second half of this year.
Board restructure provides experienced team
To advance the assets, Challenger has installed a new experienced board which includes Mr Knauer as managing director and chief executive officer, Scott Funston’s new role as chief financial officer and the appointment of Fletcher Quinn as non-executive chairman.
Both Mr Knauer and Mr Quinn were present during Citadel Resources’ early days, with Mr Knauer acting as Citadel’s managing director for the company’s first 18 months.
Citadel went on to complete a definitive feasibility study on the Jabal Sayid copper project in Saudi Arabia, with the company eventually taken over for $1 billion.
Meanwhile, Mr Funston has provided financial accounting, stock exchange and regulatory compliance services for a number of resource companies operating in Australia, South America, Asia, the US and Canada.
Commenting on Challenger’s readmission to the ASX this morning, Mr Knauer said he wanted to thank existing shareholders for their support and welcome the company’s new shareholders.
“We are now in a position to quickly advance our two highly prospective South American gold and copper projects.”
“Importantly both projects have the benefit of significant historical exploration and expenditure that provides us with a lot of confidence we have two exceptional gold and copper opportunities,” he added.
Investors reacted positively to Challenger’s reinstatement to official quotation, with the company’s share price up more than 141% to $0.029 in early morning trade.