Hualilán 2029 Gold Production
Challenger Gold targets commercial production at its Hualilán project by early 2029.
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Key Points
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The standalone development strategy replaces Challenger Gold’s earlier, smaller-scale toll-milling model. An operational review found that the orebody has a broader, more disseminated grade distribution, and the new plan’s estimated post-tax NPV of about US$1.1 billion is substantially higher than the up-to-US$82.2 million estimated under the 2025 toll-milling plan.
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Challenger reported that 79,897 tonnes of ore grading 0.72 grams of gold per tonne had been stockpiled from small-scale mining activities as of the end of June.
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The Hualilán project has a reported 2.8 million-ounce gold-equivalent mineral resource estimate, while the drilling campaign is intended to support resource growth, reserve conversion and mine-plan optimisation.
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The company expects construction to ramp up in the second half of 2027, with an exploration and project-development update planned for the fourth quarter of 2026 and a NI 43-101 technical report and optimisation-study results targeted for the first quarter of 2027.
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Detailed engineering is being conducted with BBA Consultants to support early procurement planning, and Challenger aims to establish a full project-financing plan by mid-2027 after refinancing the US$15 million convertible debenture.
Challenger Gold plans to start commercial gold production at its Hualilán project in Argentina by early 2029, following a strategic review that scrapped an earlier, smaller toll-milling plan. Geelong Advertiser reports the new standalone heap-leach operation is expected to generate a post-tax net present value of about US$1.1 billion at a US$3,500 gold price — far higher than the previous US$82.2 million estimate.
The phased development includes 1.8 million gold-equivalent ounces over 14.25 years and requires approximately US$267 million in upfront capital. A flotation circuit will be added about two years after the heap-leach startup. The company is now running a 35,000-meter drilling program to expand resources and refine the mine plan.
why the strategy shift Away from toll-milling
Challenger's earlier plan relied on toll-milling — paying another operator to process ore. The Mercury reports the operational review found the Hualilán orebody has a broader, more disseminated gold grade distribution than originally thought. This discovery made a standalone heap-leach operation far more attractive economically.
The financial case is compelling: the new plan's US$1.1 billion post-tax NPV dwarfs the earlier model's US$82.2 million projection. At a 35% internal rate of return and a 2.25-year payback period, the standalone route offers substantially better returns for shareholders.
Staged Construction and 2027 Milestones
The Australian reports construction will ramp up in the second half of 2027. Before then, Challenger must deliver several critical steps: refinance a US$15 million convertible debenture, submit an application for Argentina's RIGI investment-incentive regime, and complete technical studies.
Two major technical deliverables are due in early 2027: a NI 43-101 technical report and optimization-study results. Detailed engineering with BBA Consultants is already underway to support early procurement. The company aims to finalize project financing by mid-2027, clearing the path for construction.
Drilling Campaign Targets Resource Growth
Four drill rigs are currently working on a 35,000-meter program at Hualilán. Daily Telegraph notes this campaign is designed to expand the 2.8 million-ounce gold-equivalent mineral resource estimate and convert resources into mineable reserves. The results will help optimize the mine plan.
As of end-June, Challenger had already stockpiled 79,897 tonnes of ore grading 0.72 grams of gold per tonne from small-scale mining. This existing ore inventory provides a head start when the heap-leach operation commences.
Path to Argentina's Investment Incentive Regime
Townsville Bulletin reports Challenger is pursuing Argentina's RIGI investment-incentive program, which offers tax breaks and regulatory certainty to qualifying mining projects. The application process is part of the company's broader permitting and financing strategy ahead of the 2027 construction ramp-up.
An exploration and project-development update is scheduled for the fourth quarter of 2026. This update will give investors visibility into resource growth from the drilling program and refine production and capital assumptions before final construction decisions are locked in.
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