How Challenger Gold’s Hualilan Toll Milling and Ecuador Assets Are Poised for Growth

Hualilan Toll Milling Nears Production

Challenger Gold Limited has made significant strides in advancing its Hualilan Gold Project in Argentina during the September quarter. The refurbishment and commissioning of the Casposo Toll Milling plant, located nearby, has been completed, enabling the processing of lower-grade stockpiles and setting the stage for Hualilan ore processing to commence in January 2026. This timeline reflects a strategic two-month delay from the initial November target, allowing the Casposo plant a full ramp-up period to steady-state production after a prolonged care and maintenance phase.

Key operational contracts have been secured with global explosives leader ORICA and local drilling specialist THOR S.A., ensuring the availability of blasting products and blasthole drilling services essential for the toll milling phase. Both contractors have mobilised on site, with blasting activities scheduled to begin mid-November. The awarding of the explosives permit and approval of an Environmental Impact Assessment amendment further clear regulatory hurdles, fully permitting the toll milling operations.

Pre-Feasibility Study Progress and Infrastructure Build

The standalone Pre-Feasibility Study (PFS) for Hualilan remains on track for release in the first quarter of 2026. Metallurgical testwork is nearing completion, with encouraging results from large-scale column leach tests indicating excellent gold recoveries and no flow issues. Complementing this, detailed mining and processing cost models have been developed with input from industry partners including Komatsu and Ausenco, while open pit and underground mine designs are advancing to support trade-off studies.

On the ground, infrastructure development is progressing well. Earthworks and access roads to key pits are complete, and facilities such as workshops, warehouses, a new camp, and water and fuel supplies are being installed on schedule. The workforce is largely local, with over 90% of mining personnel sourced from the San Juan province, reflecting Challenger’s commitment to community engagement and local employment.

Ecuador Projects Gain Strategic Validation

Meanwhile, in Ecuador, Challenger’s El Guayabo and Colorado V projects have gained renewed market interest following the acquisition of neighbouring Lumina Gold Corp by CMOC Group Limited for approximately A$650 million. Lumina’s flagship Cangrejos project, located immediately north of Challenger’s concessions, is one of Ecuador’s largest undeveloped gold deposits. This transaction implicitly enhances the valuation of Challenger’s adjacent assets, which collectively hold a combined 9.1 million ounces gold equivalent resource.

Challenger is actively pursuing value realisation strategies for its Ecuador portfolio, including potential TSX listing, outright sale, or strategic partnerships. The projects benefit from significant scale, high-grade cores for early production, and proximity to infrastructure such as a deepwater port and granted mining leases, positioning them well for future development.

Financial Position Strengthened by Institutional Placement

Financially, Challenger closed the quarter with $26.7 million in cash, bolstered by a $30 million institutional placement completed in late October. The placement was priced at a 7.1% discount to recent trading and attracted participation from cornerstone investors L1 Capital and Helikon Investments alongside new institutions. Proceeds are earmarked to support the ramp-up of toll milling operations, including upfront contract payments, a fully funded 40,000-metre drilling campaign commencing in January 2026, and select capital expenditures to prepare for standalone development.

Exploration and development expenditure increased to $3.9 million for the quarter, reflecting the operational ramp-up, while administration costs declined slightly. The company also disclosed performance share terms and recent ASX waivers related to milestone-based equity issuance, underscoring ongoing corporate governance and capital management efforts.