Challenger Gold Limited (“Challenger”) has signed key production drilling and explosives services contracts for its Hualilán Gold Project in Argentina, marking another significant milestone as the Company advances toward first gold production under its Toll Milling Phase.
The Company’s Argentine subsidiary, Golden Mining S.A., has executed:
- a contract with global explosives leader ORICA for the provision of blasting products and on-site blasting services; and
- a 24-month drilling services contract with THOR S.A., one of Argentina’s most experienced drilling contractors, for blasthole drilling and ore control.
THOR is the preferred drilling partner for ORICA’s contract blasting operations in Argentina, operating one of the nation’s largest drill fleets. Mobilization of both ORICA and THOR to site is scheduled for late October 2025, with blasthole drilling expected to commence in early November, followed by the first blast shortly thereafter.
Challenger CEO Kris Knauer said the Company was pleased to formalize partnerships with experienced local operators.
“We are pleased to partner with ORICA and THOR as we take this next step toward production at Hualilán. Their technical strengths and established operational footprint in Argentina make them ideal partners for a project of this scale. These contracts ensure safe, efficient, and reliable drilling-and-blast execution as we commence mining operations for toll milling.
“We are aligned with both ORICA and THOR not only commercially, but also in our shared goal of creating lasting value in San Juan through local employment, training, and the development of regional suppliers.
The Toll Milling Phase is a critical milestone in Challenger’s growth strategy, providing near-term cash flow and de-risking the development of the broader Hualilán Gold Project, one of Argentina’s most advanced undeveloped gold assets.”
Toll Milling and Operational Update
The Casposo Toll Milling Plant, owned by Austral Gold Limited, has successfully completed refurbishment and commissioning, with processing now underway on lower-grade stockpiles. The facility, located 165 kilometers from Hualilán, historically produced over 323,000 ounces of gold and 13.2 million ounces of silver and achieved recoveries of 90 % for gold and 79 % for silver.
Under the Toll Milling Agreement, a minimum of 450,000 tonnes of near-surface Hualilán mineralized material will be processed over three years.
The strategy aims to capitalize on the current high gold price—above US$4,000/oz—to generate early cash flow for development of Challenger’s standalone Hualilán Gold Project.
A recent Pre-Feasibility Study (PFS) highlighted:
- EBITDA of US$195 M and post-tax NPV5 of US$110.4 M at spot prices;
- AISC of ~US$1,454/oz AuEq; and
- operations extracting just 3 % of Hualilán’s 2.8 Moz AuEq Mineral Resource Estimate.
De-Risking Through Local Partnerships
Engagement with ORICA and THOR represents a strategic move to de-risk start-up operations by leveraging their technical expertise, established logistics, and long-term presence in San Juan. Both companies maintain strong community engagement programs and a proven track record in safe, efficient mining support services.