Challenger Gold Strengthens Hualilan with New Infill Drilling Results

Infill Drilling Strengthens Toll Milling Pits

Challenger Gold (ASX:CEL) has reported assay results from the final tranche of its 10-metre spaced infill drilling program targeting the Hualilan toll milling pits, including Sanchez, Norte, Magnata, and the contingency Sentazon pit. The program delivered notable intercepts such as 16 metres at 2.5 g/t AuEq including 7 metres at 5.1 g/t AuEq in the Magnata pit, and a standout 5 metres at 19.8 g/t AuEq in the Norte pit, reinforcing the high-grade nature of the deposit.

The drilling results feed directly into the ongoing Pre-Feasibility Study (PFS), supporting the planned mining and toll processing strategy. The program’s approximately 40 holes per pit have enhanced geological confidence and grade continuity within the key mining areas.

Updated Mineral Resource and Ore Reserve Estimates

Challenger’s updated Mineral Resource Estimate (MRE) for Hualilan now stands at 132.1 million tonnes grading 0.57 g/t gold, 3.3 g/t silver, and 0.21% zinc, equating to 2.7 million ounces gold equivalent (AuEq) at a 0.06 g/t AuEq cut-off. This includes 73.3 million tonnes of Indicated Resources at 0.74 g/t gold and 56.9 million tonnes of Inferred Resources at 0.32 g/t gold. The resource is reported within an optimised pit shell, reflecting realistic economic parameters.

Complementing the resource update, the Ore Reserve estimate supports a 3-year mine life based on a toll treatment agreement with Austral Gold. The reserve comprises 427,500 tonnes at 7.0 g/t AuEq, with gold and silver recoveries modelled at 83.4% and 64.7% respectively. The mine plan anticipates delivering 450,000 wet tonnes of ore to Austral Gold’s Casposo processing facility, with mining scheduled across the Sanchez, Norte, and Magnata pits.

Metallurgical Testing Validates Processing Route

Extensive metallurgical test work underpins the processing assumptions. Gravity and flotation tests on representative composites from limestone-hosted, dacitic intrusive, and sediment-hosted mineralisation indicate strong gold, silver, and base metal recoveries. Notably, sequential flotation produced saleable concentrates with low deleterious elements, and intensive leach tests demonstrated gold recoveries up to 96% from concentrate samples.

Tests simulating the toll treatment process at Casposo confirm gold recoveries ranging from 78% to 96% and silver recoveries between 56% and 78%, supporting the economic viability of the toll milling strategy. These results align with the company’s planned staged mining and processing approach.

Environmental and Infrastructure Progress

Challenger has secured Environmental Impact Assessment (EIA) approval as of October 2024, with an addendum pending to cover the updated mine plan. The toll treatment approach reduces on-site infrastructure requirements, eliminating the need for a tailings storage facility. Site infrastructure focuses on mining operations, including camps, offices, and haulage facilities.

The mining method is conventional open pit, supported by detailed geotechnical studies and mine designs optimised for haulage and equipment productivity. Waste rock is being repurposed for site road construction, further streamlining operational costs and environmental footprint.

Next Steps and Market Positioning

With the infill drilling results integrated into updated resource and reserve models, Challenger is well positioned to advance towards production ramp-up. The toll milling agreement with Austral Gold provides a low-capital pathway to cash flow, while metallurgical and environmental work continues to de-risk the project.

Investors will be watching how Challenger manages the transition from resource definition to steady-state mining and processing, particularly as further assay results and metallurgical data become available. The company’s ability to maintain momentum on infrastructure and regulatory fronts will be critical to sustaining its near-term development timeline.