Challenger Gold Secures $195M EBITDA Toll Milling Phase with ORICA and THOR
Challenger Gold has secured critical drilling and explosives contracts and completed refurbishment of the Casposo Toll Milling plant, marking a pivotal step toward early gold production at its Hualilán project in Argentina.
- Contracts signed with ORICA for blasting and THOR S.A. for drilling services
- Casposo Toll Milling plant refurbishment and commissioning completed
- Mobilisation of contractors scheduled for late October 2025
- Toll Milling phase designed to generate near-term cash flow and de-risk project development
- JORC-compliant resource estimates underpin robust project economics
Strategic Partnerships to Support Toll Milling
Challenger Gold Limited (ASX, CEL) has taken a significant stride in advancing its flagship Hualilán Gold Project in Argentina by signing key contracts with ORICA, a global leader in explosives, and THOR S.A., one of Argentina’s largest drilling contractors. These agreements are set to underpin the Toll Milling phase, a critical early stage in the project’s development designed to process near-surface mineralised material and generate early cash flow.
ORICA will supply blasting products and services, leveraging its strong safety record and logistical capabilities in Argentina, while THOR will provide blasthole drilling services with a flexible contract allowing up to three concurrent work fronts. The mobilisation of these contractors is scheduled for late October 2025, with drilling operations commencing shortly thereafter.
Casposo Plant Refurbishment Completes Key Milestone
Complementing these contracts, the refurbishment and commissioning of the Casposo Toll Milling plant have been successfully completed. The plant, located approximately 165km from Hualilán, is now operational and processing lower-grade stockpiles. Historically, Casposo has been a prolific producer of gold and silver, and its reactivation is a cornerstone of Challenger’s strategy to capitalise on current high gold prices.
This Toll Milling approach allows Challenger to generate near-term cash flow by processing approximately 450,000 tonnes of mineralised material over three years, providing a financial foundation to support the construction of the larger standalone Hualilán project.
Robust Economics and Resource Confidence
Challenger’s recent Pre-Feasibility Study highlights compelling economics for the Toll Milling phase, projecting EBITDA of US$195 million and a post-tax net present value of US$110.4 million at current spot prices. Even under conservative commodity price assumptions, the project remains economically attractive, with significant upside potential given that the Toll Milling targets only a small fraction of the total 2.8 million ounce gold equivalent resource at Hualilán.
The company’s detailed JORC-compliant mineral resource estimates, supported by extensive drilling and assay data, provide a strong technical foundation. The engagement of experienced local contractors ORICA and THOR also forms part of a deliberate risk mitigation strategy to ensure operational reliability and community engagement through local employment and training.
Looking Ahead
With the Toll Milling phase now fully supported by operational contracts and plant readiness, Challenger is positioned to commence mining and processing activities imminently. This phase is expected to deliver early cash flow and reduce execution risk ahead of the broader development of the Hualilán Gold Project, which remains one of Argentina’s most advanced undeveloped gold assets.
Bottom Line?
Challenger Gold’s Toll Milling phase sets the stage for early production and cash flow, but execution and commodity price volatility remain key watchpoints.
Questions in the middle?
- How smoothly will the mobilisation and ramp-up of ORICA and THOR proceed in the coming months?
- What impact will current gold price fluctuations have on the Toll Milling phase’s cash flow and project economics?
- How will the Toll Milling success influence timelines and financing for the standalone Hualilán project?
