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Finance Investment, Oil Mining Resources

Challenger Gold (ASX: CEL) – Hualilan Gold Project Scoping Study

Challenger Gold (ASX: CEL) 2 mins read

Challenger Gold (ASX: CEL), is excited to announce the outcomes of a detailed Scoping Study for its wholly-owned Hualilan Gold Project in San Juan, Argentina. The Study unveils a forecasted EBITDA of US$738 million (A$1.1 billion) over the Life of Mine (LOM), a rapid payback period of under 1.25 years, and positions the Company to be one of the lowest-cost producers listed on the ASX.

Key Highlights from the Scoping Study:

  • High-Grade Starter Mine Potential: The Study focuses on the high-grade core of the Hualilan Mineral Resource Estimate (MRE), aiming to establish a low capital-intensive startup capable of rapid self-funding.
  • Impressive Production Targets: An average annual production target of 116,000 oz of gold, 440,000 oz of silver, and 9,175 tonnes of zinc, culminating in 141,000 oz of gold equivalent.
  • Cost Efficiency: The project is forecasted to have a global lowest-quartile cash cost of US$527/oz and an AISC of US$830/oz.
  • Robust Financial Metrics: The Study projects a pre-tax NPV5 of US$409 million with gold at US$1,750/oz and silver at $20/oz, which increases significantly with current market prices.
  • Optimisation Opportunities: The Company identifies several opportunities for optimisation and improvement beyond the excellent outcomes presented.

Operational and Financial Projections:

The initial mine life is projected at 7 years, with the potential for extension as mineralisation remains open at depth. The project will commence with a low-risk starter pit and transition to conventional sub-level open stope (SLOS) underground mining. The processing facility will include a crusher, mill, gravity recovery circuit, and a superior economic outcome from conventional sulphide floatation and floatation-tails leaching (FTL).

The production schedule is robust, comprising 81% Indicated Resource and 19% Inferred Resource. The compelling financial metrics include a Project IRR (Pre-Tax Real) of 75% and a breakeven gold price of US$983/oz.

Outstanding Potential and Future Plans:

Challenger Gold also highlights the significant upside potential, with the indicative NPV not reflecting the residual value of the 1.7Moz of gold equivalent remaining post-SS LOM. The Company is exploring economically viable heap leach processes and optimising underground resources that are likely economic at today's gold prices.

With mineralisation open at depth and along strike, the Company is poised to explore numerous regional opportunities within the 600 Ha footprint. The current gold and silver pricing, which is 14% higher than the price used in the Study assumptions, further enhances the project's financial outlook.

Next Steps:

Challenger Gold seeks to fast-track production by expediting metallurgical testwork and evaluating options to recover lower-grade mineralisation through a larger open pit. The Company will decide whether to advance both conventional flotation and CIL in the next study stage upon receiving further metallurgical testing results.

 


About us:

Challenger Gold Limited’s (ASX: CEL) aspiration is to become a globally significant gold producer. The Company is developing two complementary gold/copper projects in South America with the Company's flagship Hualilan Gold Project in San Juan, Argentina containing resources of 2.8 million ounces gold equivalent.


Contact details:

Jane Morgan

jm@janemorganmanagement.com.au

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