Challenger Gold Limited has delivered a significant milestone with the completion of the Pre-Feasibility Study (PFS) for its toll milling operation at the Hualilan Gold Project in San Juan, Argentina, confirming a high-margin, low-capex pathway to near-term cash flow.
The PFS outlines robust economics for a 33-month toll milling campaign at the Casposo plant, operated under an existing agreement with Austral Gold. At current spot metal prices (US$3,300/oz Au, US$33/oz Ag), the project is forecast to deliver an EBITDA of A$221 million (US$142.8 M), post-tax NPV5 of A$127 million (US$82.2 M), and cumulative post-tax free cash flow of A$142 million (US$91.8 M).
Importantly, the toll milling operation requires just A$13.8 million (US$8.9M) in upfront capital and working capital, which is already fully funded through Challenger’s recent A$33.9 million equity placement.
Key Highlights:
- High margin at conservative pricing: At base case metal prices (US$2,500/oz Au, US$27.50/oz Ag), the PFS forecasts EBITDA of US$88.0 million, post-tax NPV5 of US$50.5 million, and post-tax free cash flow of US$56.7 million
- Low-cost, rapid development: The project’s AISC is estimated at US$1,454/oz AuEq, with project payback expected just three months from the start of mining
- High-grade reserve base: The production target is 450,000 wet metric tonnes at an average mined grade of 6.2 g/t Au and 35 g/t Ag, producing 76,600 oz of payable gold and 338,500 oz of silver
- Permitted processing route: Ore will be trucked 165km to the fully-permitted Casposo plant, where metallurgical recoveries are estimated at 84.4% for gold and 65.7% for silver
- Minimal development risk: The PFS is based entirely on Indicated Resources and excludes Inferred Resources, de-risking the reserve and cash flow projections
Challenger Gold Limited is an Australia-based gold and copper exploration company. The Company’s projects include the Hualilan project, El Guayabo project, and Karoo Basin Gas project. Challenger Gold Limited is developing the Hualilan Gold Project in San Juan, Argentina. Hualilan is one of the highest-grade undeveloped gold projects globally, with a current 2.8 Moz gold equivalent Mineral Resource Estimate. The Company is advancing both a low-capex toll milling opportunity and a larger standalone development strategy, with a focus on rapid cash generation, resource growth and value creation.