Challenger Gold Finalizes Toll Milling Agreement and Advances Strategic Investment
AUSTRAL GOLD LIMITED (AGD) Share Update December 2024 Wednesday 4th
Challenger Gold Secures Toll Milling Agreement and Advances $6.6M Investment
Challenger Gold Limited (ASX: CEL) has successfully executed a binding toll milling agreement with Casposo Argentina Mining Limited, securing a significant processing capacity for its Hualilan Gold Project. This strategic move is complemented by a $6.6 million investment nearing completion.
Instant Summary:
- Binding agreement for toll milling with Casposo Argentina Mining Limited.
- Guaranteed processing capacity of 150,000 tonnes per year for three years.
- Working capital support for mining, ore transport, and processing.
- Final long-form agreement expected within 15-20 days.
- $6.6 million strategic investment nearing completion.
Agreement Details
Challenger Gold Limited has finalized a binding agreement with Casposo Argentina Mining Limited, the operator of the Casposo treatment plant in San Juan, Argentina. This agreement outlines the commercial and operational terms for toll processing ore from the Hualilan Gold Project. The agreement guarantees a processing capacity of 150,000 tonnes per annum over three years, totaling 450,000 tonnes.
The agreement includes a base toll processing fee of US$8.80 per tonne, with a monthly minimum payment of US$110,000. An upfront payment of US$2 million is required, with US$1 million deferred until the second year. Additionally, a performance fee structure is in place, incentivizing recovery rates with fees ranging from 20% to 30% of milling costs.
Strategic Investment
In parallel with the toll milling agreement, Challenger Gold is advancing a $6.6 million strategic investment, which was initially announced on October 2. The subscription agreement terms have been finalized, and the investment is nearing completion.
Operational Pathway
Challenger Gold is focused on advancing critical workstreams to commence toll milling operations. This includes finalizing operational procedures with the Mill Operator, completing open-pit mining designs, and evaluating contract mining options. The company aims to maintain operational flexibility and financial discipline while ensuring a clear pathway to production.
The finalized toll milling agreement and the strategic investment are significant steps for Challenger Gold, providing the necessary infrastructure and financial support to advance the Hualilan Gold Project. This development is likely to positively impact the company's stock, as it demonstrates a clear path to production and revenue generation.
Investor Reaction:
Analysts are likely to view this agreement positively, as it secures processing capacity and provides financial support for the Hualilan Gold Project. The strategic investment further strengthens the company's position, potentially boosting investor confidence.
Conclusion:
Investors should closely monitor Challenger Gold's progress in finalizing the long-form agreement and completing the strategic investment. These developments are crucial for the company's growth and could significantly impact its market position.