Challenger Gold Executes Mining Contract for Hualilán Toll Milling Phase; First Blast Completed as Project Advances Toward December Mining Start
Challenger Gold Limited (ASX: CEL) has reached another major milestone at its flagship Hualilán Gold Project in Argentina, executing a 24-month mining services contract with leading local contractor MAPAL Constructions and Mining S.A. and completing the first production blast ahead of the scheduled mining start on 1 December 2025.
Under the contract, MAPAL will undertake load-and-haul operations, auxiliary works, and run-of-mine (ROM) material handling covering approximately 3.37 million tonnes of material movement during the Toll Milling Phase.
Mobilisation to site authorised under an early-works agreement began in late October and is now complete, with preparatory works progressing through November. Blasthole drilling by THOR S.A. commenced on schedule on 1 November, followed by on-site explosives charging by Orica and completion of the first blast on 20 November 2025.
The Toll Milling Phase is designed to generate significant near-term cash flow by processing near-surface ore through the nearby Casposo Plant, which recently returned to commercial operation and delivers strong historical recoveries. Toll milling draws on only 3% of the 2.8Moz AuEq Hualilán Mineral Resource Estimate, providing substantial upside for future standalone development.
Commenting on the developments, Challenger CEO Kris Knauer, said:
“Engaging MAPAL provides a low-risk and capital-efficient path to execute our Toll Milling Phase while keeping the broader standalone development program on track. MAPAL’s depth of experience, established workforce, and long history in the San Juan mining community give us strong confidence in their ability to deliver. Appointing an established local contractor for mining production materially reduces execution risk and positions us for long-term success at Hualilán.”
“This appointment marks another key milestone as Challenger progresses toward first gold production, with mining on track to commence on 1 December. Our first blast this week, marking the transition from development to production activities. The Toll Milling Phase is a central component of our growth strategy: providing near-term cash flow, reducing capital intensity, and de-risking the development of the broader Hualilán Gold Project, one of Argentina’s most advanced undeveloped gold assets.”
Operational Progress Highlights
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THOR S.A. successfully mobilised to site and commenced blasthole drilling on 1 November, achieving penetration rates at or above expectations.
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Orica has commenced explosive charging operations, with the first multi-pattern blast completed on 20 November.
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Recruitment for key operational roles is largely finalised, with a predominantly local Argentine workforce.
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Mining under the executed MAPAL contract remains on track for 1 December 2025.
Toll Milling Strategy: Low-Capex Pathway to First Cash Flow
Under a binding agreement with Casposo Argentina Mining Limited, Challenger has secured processing of 450,000 tonnes of near-surface Hualilán material over three years.
The Casposo Plant—165 km from Hualilán—has previously produced 323,000 oz Au and 13.2 Moz Ag, historically achieving recoveries of 90% for gold and 79% for silver.
According to the June 2025 Toll Milling PFS, the three-year plan delivers outstanding economics, including:
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EBITDA of US$195M and post-tax NPV5 of US$110.4M at spot prices (~US$4,000/oz Au)
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AISC of ~US$1,454/oz AuEq
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UPSIDE: Toll milling extracts only 3% of the current MRE, leaving substantial growth potential
About us:
About Challenger Gold
Challenger Gold Limited (ASX: CEL) is advancing two gold/copper projects in South America. Its flagship project, the Hualilan Gold Project in San Juan, Argentina, contains resources of 2.8 Moz AuEq.
Contact details:
Media Enquiries Jane Morgan +61 405 555 618 [email protected]