Challenger Gold Limited (ASX: CEL) Finalises Toll Milling Agreement
Challenger Gold Limited (ASX: CEL) has executed a binding toll milling agreement with Casposo Argentina Mining Limited, covering the processing of ore from the Hualilan Gold Project. This deal secures a guaranteed processing capacity of 150,000 tonnes per annum for the next three years, totalling 450,000 tonnes.
The agreement provides essential working capital support for mining, ore transport, and processing costs. CEL anticipates finalising a long-form agreement within the next 15-20 days while concurrently managing a strategic investment of $6.6 million.
Agreement Highlights
The toll milling agreement includes favourable terms such as a base toll processing fee of US$8.80 per tonne and an initial payment of US$2 million. CEL will also get performance fees based on gold recovery rates, ranging from 20-30% of milling costs.
The upfront payment is refundable if the mill operator fails to commence operations by 31 July 2025. Moreover, CEL retains full ownership of the ore and its resulting products throughout the milling process.
Path to Production
Challenger Gold Limited remains focused on several key workstreams to launch toll milling operations. This includes finalising operational procedures with the mill operator, completing open-pit mining designs, and exploring contract mining options. Mining schedules are expected to be finalized shortly.
Kris Knauer, Managing Director and CEO of Challenger Gold Limited, commented, “This agreement is a significant milestone for our company and ensures a robust processing capacity for the Hualilan Gold Project. We are committed to advancing operations efficiently and maintaining financial discipline as we move forward.”
The structured execution of this agreement reveals Challenger Gold’s planned approach towards achieving production while emphasising operational flexibility and financial responsibility.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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