Challenger Gold Secures Toll Processing Deal for Hualilan Project; $6.6M Strategic Placement Finalised

3 min read | December 30, 2024 01:26 PM AEDT | By Team Kalkine Media

Challenger Gold Secures Toll Processing Deal for Hualilan Project; $6.6M Strategic Placement Finalised — Image source: shutterstock

Favorable Processing Terms

The Toll Processing Agreement outlines terms designed to align with the economic objectives of the Hualilan Gold Project, including cost-based processing fees and a performance-based incentive structure. Key highlights include:

Base Toll Processing Fee: Processing at cost, with additional fees for reagent consumption.
Monthly Access Fee: US$8.80 per tonne, with a minimum monthly payment of US$110,000.
Upfront Payment: US$2 million, with US$1 million deferred until the second year.
Performance Fee: Incentive-based fee tied to gold recovery rates, ranging between US$12–18 per tonne.

Additionally, CEL retains full ownership of the ore and all gold products throughout the processing cycle. A technical committee with equal representation from both parties will oversee operations and evaluate transitioning to continuous processing after the initial 12 months.

Strategic Placement to Fund Growth

Challenger Gold has also finalized a $6.6 million strategic placement with an entity controlled by Eduardo Elsztain, expected to settle on January 2, 2025. The placement includes 147.7 million shares priced at 4.5 cents each, along with attached share purchase warrants.

The placement proceeds will be allocated to:

The US$2 million upfront payment for the Toll Processing Agreement.
Preparation for toll milling operations.
General working capital.

Operational and Financial Support

Casposo Argentina Mining Ltd., the toll mill operator, recently secured a US$7 million loan from Banco San Juan S.A. to refurbish the Casposo treatment plant for processing ore from CEL’s Hualilan Project. This funding will ensure operational readiness and support CEL’s costs for mining, ore transport, and processing under an approved budget.

Looking Ahead

Challenger Gold is poised for significant progress at its Hualilan Gold Project, with 450,000 tonnes of ore secured for processing and $6.6 million in strategic funding to support its operations. The company’s focus on efficient toll processing and strong financial backing positions it for substantial growth in 2025 and beyond.

Shares of CEL rose nearly 3% to 4.4 cents following the announcement

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