Strong Economics and Development Potential
Challenger Gold Limited has released a robust pre-feasibility study (PFS) for its Hualilan Gold Project located in San Juan Province, Argentina. The study details a post-tax net present value (NPV) of $1.1 billion and an internal rate of return (IRR) of 34.8%. With annual production expected to reach approximately 135,000 ounces of gold equivalent (AuEq), the project demonstrates strong economic potential.
Over a 14.25-year mine life, the study projects post-tax free cashflow of $1.98 billion. Initial capital intensity is low, with upfront capital expenditure (CAPEX) pegged at $267 million, resulting in a payback period of about 2.25 years.
Maiden Ore Reserve and Expansion Plans
Challenger Gold introduced a maiden JORC-compliant Probable Ore Reserve. The reserve consists of 62.9 million tonnes at 0.75 grams per tonne gold, containing 1.51 million ounces of gold, 7.73 million ounces of silver, and 170,000 tonnes of zinc. In the latter half of 2026, resource extension drilling is planned to explore additional upside potential.
An open pit mining operation is central to the development strategy. It will feed a 1.5 million tonne per annum flotation and leaching plant, alongside an 8 million tonne per annum heap leach facility. The project remains open along strike and at depth, suggesting potential for future resource expansion.
Challenger Gold is considering applying for Argentina’s Incentive Regime for Large Investments. This regime offers benefits such as fiscal stability and reduced corporate tax rates for qualifying projects.
A conservative gold price of $3,500 per ounce forms the base case scenario of the PFS. This is approximately $1,100 less than the gold price at the time the study was completed. If the gold price rises to $4,600 per ounce, the project’s pre-tax NPV5 could increase to roughly $2.7 billion, with the IRR potentially reaching 83%.
Challenger Gold Limited (ASX: CEL) owns 100% of the Hualilan Gold Project. The PFS supports a large-scale, long-life open pit gold project with strong economics and rapid payback, offering substantial growth optionality.
The study outlines a capital-efficient staged development pathway. Initially, heap leach operations will commence with lower upfront capital and diesel-powered infrastructure. This will later transition to full-scale flotation operations and grid power integration.
