Challenger Gold Delivers Robust PFS for Hualilan with US$1.1Bn Post-Tax NPV and 45% Pre-Tax IRR
JMM
Challenger Gold Delivers Robust PFS for Hualilan with US$1.1Bn Post-Tax NPV and 45% Pre-Tax IRR
- Pre-Feasibility Study confirms Hualilan as a technically credible, financeable gold development project in Argentina
- Post-tax NPV5 of US$1.1 billion and post-tax IRR of 34.8% at a conservative US$3,500/oz gold price
- Pre-tax NPV5 of US$1.45 billion and pre-tax IRR of 45%
- Forecast post-tax free cashflow of US$1.98 billion over 14.25-year mine life
- Average annual production of approximately 135koz AuEq
- Maiden Probable Ore Reserve of 62.9Mt at 0.75g/t Au containing 1.51Moz gold, 7.73Moz silver and 170kt zinc
- Low initial capital intensity with upfront CAPEX of US$267 million
- Payback period of approximately 2.25 years from commencement of production
- Significant upside identified through resource conversion, optimisation studies and potential production expansion scenarios
- Hualilan remains open along strike and at depth, with resource extension drilling planned for 2H 2026
Challenger Gold Limited (ASX: CEL) has delivered a robust Pre-Feasibility Study (PFS) for its 100%-owned Hualilan Gold Project in San Juan Province, Argentina, outlining a large-scale, long-life open pit gold project with strong economics, rapid payback and substantial growth optionality.
The PFS establishes Hualilan as a technically credible and commercially attractive development opportunity, transitioning the project from a resource-scale asset into a reserve-backed mining development with integrated processing infrastructure.
The study outlines a staged development strategy centred on an open pit mining operation feeding both a 1.5Mtpa flotation and leaching plant and an 8Mtpa heap leach facility, enabling flexible ore routing and optimised economics across the orebody.
The PFS base case delivers a post-tax NPV5 of US$1.1 billion and post-tax IRR of 34.8%, generating forecast post-tax free cashflows of US$1.98 billion over a 14.25-year mine life using a conservative gold price assumption of US$3,500/oz — approximately US$1,100/oz below the prevailing gold price during study completion.
Importantly, at spot gold pricing of approximately US$4,600/oz, the project’s pre-tax NPV5 increases to approximately US$2.7 billion with an IRR of 83%, highlighting the project’s significant leverage to the gold price environment.
The PFS also delivers a maiden JORC-compliant Probable Ore Reserve of 62.9Mt at 0.75g/t Au containing 1.51Moz gold, 7.73Moz silver and 170kt zinc, representing a major de-risking milestone for the Company.
The reserve underpins a production target of approximately 1.84Moz AuEq recovered over the life of mine, with average annual production expected to reach approximately 135koz AuEq.
The study outlines a capital-efficient staged development pathway, with heap leach operations commencing first using lower upfront capital and diesel-powered infrastructure before transitioning to full-scale flotation operations and grid power integration. Initial CAPEX is estimated at US$267 million, with total life-of-mine CAPEX of US$604 million.
Hualilan benefits from its location in San Juan Province, one of Argentina’s premier mining jurisdictions, with sealed highway access, existing site infrastructure and established mining services capability. The Company has already completed substantial enabling works, including flood mitigation infrastructure, road access, accommodation facilities and water supply systems.
The PFS identifies multiple opportunities to further enhance project value during the upcoming Definitive Feasibility Study (DFS), including:
- Resource conversion from Inferred to Indicated categories
- Earlier commencement of the flotation plant
- Potential increase in processing throughput beyond 150koz AuEq per annum
- Improved heap leach recoveries following recent metallurgical testwork
- Optimisation of contract mining arrangements
- Potential underground development opportunities below the current pit shell
Additionally, the project retains significant exploration upside, with Hualilan remaining open along strike and at depth. Challenger plans to recommence resource extension drilling in 2H 2026.
The Company also intends to apply for Argentina’s Incentive Regime for Large Investments (RIGI), which offers long-term fiscal stability, reduced corporate tax rates and export duty exemptions for qualifying projects.
Challenger said the combination of strong economics, low upfront capital, staged development flexibility and substantial exploration upside positions Hualilan as one of the most compelling emerging gold development projects in Latin America.
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