Argentina's Hualilán Gold Mine Plans Commercial Production in Early 2029

en.Wedoany.com Reported - Challenger Gold Limited has proposed a new roadmap to advance development of the Hualilán project in San Juan Province, planning to achieve commercial production in early 2029 through an initial standalone phase based on heap leaching.

The new management team has made bringing this 100%-owned project into production a primary objective. The schedule arranges engineering, exploration, optimization, financing and execution to proceed in parallel, with construction activities to accelerate in the second half of 2027.

The strategy is based on the results of the Pre-Feasibility Study (PFS) submitted in May 2026. The PFS estimates production of 1.8 million ounces of gold equivalent over a 14.25-year mine life, averaging approximately 135,000 ounces of gold equivalent per year after the first two years. The development plan includes an initial heap leach phase, followed by the addition of a flotation circuit approximately two years later; pre-production capital is estimated at approximately US$267 million (including contingency).

On engineering and construction, Challenger has appointed BBA Consultants to advance detailed engineering for Phase 1, covering the mine, heap leach pad, processing facilities and related services. At the same time, the company is conducting optimization studies on the mine plan, processing and infrastructure. One option under consideration is improving gold recovery through heap leaching, potentially raising recovery from 69.7% to 74.7%, subject to further metallurgical work. Another area under review is power infrastructure. Challenger estimates that having a third party finance and build power access could reduce initial capital requirements by approximately US$48 million. The company also plans to file an NI 43-101-compliant technical report in the first quarter of 2027.

On exploration, Challenger is advancing a 35,000-meter drilling program, with four rigs currently operating. The work is aimed at expanding the resource base, converting mineral resources to ore reserves and optimizing the mine plan. The company expects to provide an exploration progress update in the fourth quarter of 2026, with updated mineral resource and ore reserve estimates planned for release in the second half of 2027.

Alongside technical advancement, Challenger is studying the financial structure needed to develop Hualilán. The company plans to submit an application to join the Large Investment Incentive Regime (RIGI) by the end of September 2026 and expects a decision in the first half of 2027. Challenger says approximately US$30 million in historical investment at Hualilán may count toward the investment threshold required under the regime. On financing, the company plans to refinance its existing US$15 million convertible debt and aims to have a comprehensive project financing plan in place by mid-2027. The company is also considering a potential secondary listing to increase exposure to North American institutional investors.

Early activities are already advancing in San Juan, including work related to the mine camp, access roads and the project's main entrance. As of the end of June, small-scale mining activities had stockpiled 79,897 tonnes of ore at an average grade of 0.72 g/t gold, intended for future processing. Challenger has also abandoned its previous third-party processing strategy. The company says this change does not affect the larger standalone project defined in the May 2026 Pre-Feasibility Study.

Under the new roadmap, 2027 is shaping up to be a decisive year for Hualilán. Challenger plans to advance full project financing, complete new technical studies and accelerate construction activities, with the goal of achieving commercial production in the first few months of 2029.