Challenger Gold

Challenger Announces Completion of Hualilan Toll Milling Pre-Feasibility Study

PFS outlines robust economics from toll milling delivering forecast EBITDA of A$221m1 over the 3 years of tolling at current prices

Challenger Gold Limited (ASX: CEL) ("CEL" or the "Company") is pleased to provide the outcomes of the Toll Milling Pre-Feasibility Study (“PFS”) completed on it’s 100% owned Hualilan Gold project located in San Juan, Argentina. The study presents a technical and economic evaluation of the Tolling scheme proposed for the project in conjunction with Austral Gold (ASX: AGD) (“Tolling Partner” or “Toll Mill”) as announced in an ASX Release on 10 January 2025.


Highlights

Toll Milling Pre-Feasibility Study (PFS) delivers compelling financial metrics:

  • Robust margins on conservative commodity prices: using US$2,500/oz Au and US$27.50/oz Ag, the three-year toll-milling plan generates EBITDA of US$88.0M, post-tax NPV5 of US$50.5M, and cumulative post-tax free cash flow of US$56.7M.
  • Leverage to spot prices: at today’s ~US$3,300/oz Au and US$33/oz Ag, EBITDA rises to US $142.8M and post-tax NPV5 to US$82.2M, with post-tax free cash flow of US$91.8M.
  • Low upfront capital and quick payback: total upfront spend is just US$8.9M (A$13.8M) which is US$4.2M upfront capex and US$4.7M working capital, and achieves payback by December 2025 (or 3 months from the commencement of mining).
  • Competitive cost structure: forecast All-In Sustaining Cost ("AISC")2 is ~US$1,454/oz AuEq, comfortably below spot prices and achievable thanks to toll milling and a short haulage distance.
  • Financing risk removed: recent A$33.9M equity placement fully funds development through to first cash flow and acceleration the development of the larger stand-alone Hualilan development.
  • Significant upside: Toll Milling is based on extracting only 3% of the 2.8 Moz Hualilan MRE.

Key operational findings of the PFS for Toll Milling to support

  • High grade reserve-only schedule: mining focuses on three shallow open pits producing 465,000 wet metric tonnes ("wmt") of mineralized material above the cut-off grade at an average mined grade of 6.2 g/t Au and 35 g/t Ag; Inferred Resources are excluded.
  • Payable Metal: Production Target of 76.6 koz payable Au and 338.5 koz Ag over a 30-month processing campaign.
  • Low strip ratio: total material movement of 3.27 Mt with a life-of-mine strip ratio of 6:1 w:o and a forecast mining cost of US$8.12/t.
  • Logistics & processing: ore is hauled 165 km on sealed highway to the fully-permitted Casposo plant, where recoveries are expected at 84.4% Au and 65.7% Ag; all-in processing, haulage and access charges of ≈ US$133/t processed.
  • Campaign rhythm: Casposo batch treats Hualilan ore at ~25 kt/ month, running three months- on/ three months-off, with the toll program spanning 33 months in total.


Click here for the full ASX Release

This article includes content from Challenger Gold, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.

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