Challenger Gold’s Toll Milling is expected to generate near term cashflow?

Company name: CHALLENGER GOLD LTD

Code: CEL.ASX (Australian Stock Exchange)

Company website: https://challengergold.com/

 Recent capital raise proceeds will place Challenger Gold in a good position to capitalise on the recent announcement that it has entered into an agreement to Toll Mill high-grade ore from Hualilan at a nearby Mine. The successful implementation of which, would transform the Company into a producer and provide a pathway to fund the full development of the Hualilan Gold Project. 
 
 
Other factual information provided by the company has been summarised below:
 

• Toll Milling is expected to generate significant near term cashflow and provide a pathway to fund the larger stand-alone Hualilan Project development as per the recent announcement.  The Company has identified over 450,000t of ore, starting at surface, for Toll Milling at an average grade of 5.7 g/t Au, 32 g/t Ag containing 82,500 Oz (Au) and 463,000 oz (Ag).  This represents 3% of the Hualilan mineral resource of 2.8Moz AuEq.  Additionally, the Agreement provides for funding of mining, transporting, and processing Hualilan ore until CEL receives revenue from initial gold sales meaning minimal startup costs

• Toll Milling is targeted to start within 9 months as the Toll Treatment Mill owner has all necessary finance for the restart secured, and importantly, the toll milling mine is fully permitted for immediate mining and processing. 

• Argentina is transforming into a favoured mining destination with President Milei cutting red tape and is reducing inflation.  The Investment Incentive Regime (RIGI) is now legislated which provides, a guaranteed framework of legal certainty over project life, removal of requirement to convert USD sales into Pesos, a reduction in corporate tax rate from 35% to 25%, and a regime for unlimited dividend repatriation

• Challenger is positioned for the potential gold bull run with a handful of economists and capital firms raising their gold price forecasts due to rising geopolitical instability, stubborn inflation, US dollar weakening and global growth slowdown.      

• CEO & Managing Director – Kris Knauer, has a diverse track record in commodities, as he started his career as an exploration geologist before moving into investment banking, initially as a mining analyst. He is an experienced listed company CEO. He led the listing of a package of copper/gold assets in Saudi Arabia to create Citadel Resources (ASX: CGG) becoming the Managing Director for the first 18 months. Citadel completed a DFS on the Jabal Sayid copper project in Saudi Arabia prior to being taken over for $1 billion.

• Challenger boasts a highly experienced Board and Management Team, with extensive hands-on operational experience in financing, minerals exploration, mining and commercial development in Australia and around the world.

 
About the company
CHALLENGER GOLD LIMITED (CEL) is an ASX-listed gold company, focused on becoming a globally significant gold producer. The Company’s main focus is developing its flagship 2.8Moz Hualilan Gold project in San Juan Argentina.  Additionally the company has 4.5Moz in Ecuador that it has announced will undertake a strategic process to explore options to monetise, or spin-off, its Ecuador assets once a resource upgrade, due in November, is complete. 
 
Hualilan Gold Project - located in San Juan Province Argentina, is a near term development opportunity. It has extensive drilling with over 150 historical and almost 900 CEL drill-holes.  The Company has released a JORC 2012 Compliant resource of 2.8 Moz AuEq which remains open in most directions. This resource contains a high-grade core 9.9 Mt at 5.0 g/t AuEq for 1.6 Moz AuEq and 29.1Mt at 2.2 g/t AuEq for 2.4 Moz AuEq within the larger MRE of 60.6 Mt at 1.4 g/t AuEq for 2.8 Moz AuEq.  Recent drilling has demonstrated this high-grade skarn mineralisation is underlain by a significant intrusion-hosted gold system with intercepts including 209.0m at 1.0 g/t Au, 1.4 g/t Ag, 0.1% Zn and 110.5m at 2.5 g/t Au, 7.4 g/t Au, 0.90% Zn in intrusives.  The Hualilan Scoping Study demonstrates production of 116,000 oz Au, 440,000 oz Ag, 9175t Zn (141,000 oz AuEq) at an ASIC of US$830/oz over an initial 7 year mine life.  CEL's current program will include a Pre-Feasibility Study, and regional exploration along the previously unexplored 30 kilometres of prospective stratigraphy.
 
El Guayabo Gold/Copper Project - covers 35 sq kms in southern Ecuador and is located 5 kilometres along strike from the 20.5 million ounce Cangrejos Gold Project1.  Prior to CEL the project was last drilled by Newmont Mining in 1995 and 1997 targeting gold in hydrothermal breccias. Historical drilling demonstrated potential to host significant gold and associated copper and silver mineralisation.  Historical drilling has returned a number of intersections including 156m @ 2.6 g/t Au, 9.7 g/t Ag, 0.2% Cu and 112m @ 0.6 % Cu, 0.7 g/t Au, 14.7 g/t Ag were not followed up.  The Company reported a maiden 4.5 Moz gold equivalent MRE with mineralisation remaining open in all directions. This MRE is based on 34 drill holes, for 22,572 metres, from the Company's Phase 1 and 2 diamond core drill program at its 100% owned El Guayabo concession.

Sources of information*

Announcements from https://www.asx.com.au/markets/company/cel

Company website https://challengergold.com/

For more articles, opinions information on this company and other ASX listed companies, SUBSCRIBE to the Armchair Banker newsletter!

DISCLAIMER: ‘The information in this article does not constitute personal financial advice. Consult your adviser or stockbroker prior to making any investment decision.

 MORE DISCLAIMERS: Stevo A is not a Financial Adviser, however, works as an Investment Banker assisting ASX listed companies with retail capital raises. All opinions expressed and written by Stevo, including all other ‘Armchair Banker’ contributors is for informational and entertainment purposes only and should not be treated as investment or financial advice of any kind. Any information provided from our articles, blogs and written opinions is general in nature and does not take into account your specific circumstances. Armchair Banker and its contributors are not liable to the reader or any other party, for the reader’s use of, or reliance on, any information received, directly or indirectly, from any content by Armchair Banker in any circumstances.

The reader should always (we’re serious about this):

1. Conduct their own research

2. Never invest more than they are willing to lose

3. Obtain independent legal, financial, taxation and/or other professional advice in respect of any decision made in connection with this article.

Full Disclosure: Stevo A is assisting/has assisted this company with shareholder communications.

For more articles, opinions information on this company and other ASX listed companies, SUBSCRIBE to the Armchair Banker newsletter!