Challenger Gold (ASX:CEL) has completed a $6.6 million strategic placement to an entity controlled by Eduardo Elsztain, who now becomes the largest shareholder with a holding of 12.7%.
The company intends to appoint Elsztain to its board as non-executive Chairman and Saul Zang to its board as a non-executive.
Additionally, the US$2 million up-front payment required under the Toll Processing Agreement with Casposo Argentina Mining has been paid. This guarantees toll processing of 150,000 tonnes per annum of Hualilan material over three years, with a total secured capacity of 450,000 tonnes.
The Toll Processing Agreement with Casposo, the operator of the Casposo treatment plant located in San Juan Argentina, is for toll processing ore from Hualilan. The Casposo Plant is located 170km from Hualilan via established roads. It has historically produced over 323,000 ounces of gold and 13.2 million ounces of silver.
During operations, the plant achieved average annual production of 40,000 ounces of gold and 1.6 million ounces of silver at recoveries of 90% for gold and 79% for silver. The primary objective of the Toll Treatment strategy is to capitalise on the current high gold price (above US$2,500/oz) to generate early cash flow.
Challenger Gold says this cashflow will be allocated towards the construction of the standard-alone Hualilan Gold project.
The company has identified 450,000 tonnes of Hualilan material containing approximately 85,000 oz of gold and 495,000 ounces of silver contained in four starter pits for Toll processing.
Open pit designs have been completed for these pits generating Potential Mining Inventory for Toll Milling of 478,000 tonnes which starts at surface.
Write to Adam Orlando at Mining.com.au
Images: Challenger
