Challenger Gold Limited (ASX:CEL) has announced a significant milestone in its journey towards gold production, securing a $6.6 million private placement and a strategic toll milling agreement that will accelerate the development of its Hualilan Gold Project in Argentina.
The company has entered into a binding term sheet for a $6.6 million private placement with Dolphin Real Assets Fund SPC Ltd, an existing shareholder and part of the Elsztain Group.
This strategic investment will provide crucial funding for the project’s advancement.
Alongside the placement, Challenger Gold has secured a Toll Milling Agreement that guarantees the processing of 450,000 tonnes of high-grade ore over three years.
This agreement is pivotal in enabling early cash flow from the Hualilan Gold Project.
The combination of the strategic placement and toll milling agreement sets Challenger Gold on an accelerated path to production, with gold output expected to commence by Q2 2025.
The company has identified 478,000 tonnes of ore containing 85,550 oz of gold and 495,334 oz of silver for the startup phase.
Key production highlights:
- Average grade: 5.8 g/t Au and 32.2 g/t Ag
- Mining method: Shallow, low-strip ratio open pits
- Production timeline: Commencing once permits are secured
Challenger Gold has made significant strides in the permitting process, having submitted an Environmental Impact Assessment (EIA) application for mining approval.
This marks the final step toward full production readiness at Hualilan.
The early-stage production strategy enabled by the toll milling agreement is designed to fund the broader development of the Hualilan Project.
Future plans include the construction of a Flotation with Tails Leach (FTL) circuit and a potential Heap Leach pad.
In conjunction with the strategic placement, Challenger Gold will offer a Share Purchase Plan (SPP) to existing shareholders, capped at $1 million.
This provides an opportunity for current investors to participate at the same price as the placement, aligning their interests with the company’s growth trajectory.
As Challenger Gold moves closer to becoming a gold producer, this strategic investment and toll milling agreement represents a significant step forward in realising the potential of the Hualilan Gold Project.
