Challenger Gold (ASX:CEL) has raised $85 million to advance its Hualilán Gold Project in Argentina, following an operational review that confirmed the asset’s development potential.
The company has appointed Peter Marrone as non-executive chairman alongside new senior executives, including COO Yohann Bouchard, CFO Felipe Riquelme, and VP for Project and Strategic Planning Luke Buchanan.
The funding will support resource growth drilling, feasibility work, development preparation, and working capital as Challenger transitions from its current third-party toll treatment model toward an integrated mining and processing operation.
Challenger has commenced its first exploration drilling program at Hualilán in more than three years, with an initial minimum 35,000m diamond drilling campaign now underway.
The majority of drilling will test extensions of known mineralisation at depth and along strike, while advancing mineral resource conversion within the existing open pit design.
Approximately 5,000m will be dedicated to geotechnical drilling to support the proposed phase one standalone heap leach project.
The operational review confirmed Hualilán’s development case, supported by a Prefeasibility Study (PFS) that outlined a 14.25-year life-of-mine production target of 1.84 million ounces (Moz) gold equivalent (AuEq).
The study showed average annual production of approximately 135,000 ounces AuEq after the staged start-up period, with a pre-tax net present value (NPV) of US$1.45 billion ($2.05 billion) and post-tax NPV of US$1.1 billion at US$3,500/oz gold.
The company is implementing a disciplined transition over approximately four months, focusing on mining, preparing, and stockpiling ore confirmed to be technically and economically suitable.
Challenger is assessing replacement of the existing toll treatment structure with an ore purchase arrangement with Casposo to reduce direct exposure to third-party processing cost risk while maintaining commercial cashflow generation.
PFS outlines robust development case
Challenger Gold says Hualilán remains a high-quality gold development opportunity with the potential to become a meaningful, long-life operation.
“The published PFS demonstrates the scale of the opportunity, including a 1.84Moz AuEq production target, a 14.25-year mine life, low upfront capital intensity, a competitive all-in sustaining cost profile, and significant NPV leverage to the gold price environment,” the company says.
The PFS contemplated a larger, integrated open-pit development with a conventional 1.5-million-tonnes-per-annum (Mtpa) flotation plant and an 8Mtpa heap leach circuit.
The study highlighted low upfront capital requirements, with estimated start-up capital of US$232 million — excluding contingency — and a payback period of approximately 2.25 years from commencement of production.
The existing 2.8Moz AuEq mineral resource remains open both along strike and at depth. The new drilling campaign is intended to systematically test this upside while improving understanding of the scale, geometry, and continuity of the mineralised system.
Subject to completion of engineering studies, permitting, financing and regulatory processes, Challenger is targeting commencement of construction activities during 2027 and progression toward standalone production in early 2029.
Challenger Gold is a West Perth-based explorer with a portfolio spanning gold, silver, copper, and gas across Argentina, Ecuador and South Africa.
Write to JC Villarba at Mining.com.au
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