Upon the release of its Hualilán gold project pre-feasibility on Monday, Challenger Gold has also announced a major capital raise and significant executive changes.
Within the PFS, West Perth-based Challenger, which anticipates inaugural gold sales revenue this month, anticipates a 14.25 year life-of-mine period at Hualilán, which is located 120km north north-west of San Juan in Argentina, along with an overall production target of 1.84 million ounces.
Modelled on a gold price of US$3500 per ounce, Hualilán possesses a pre-tax NPV of US$1.45 billion and post-tax NPV of US$1.10 billion – which is increased to US$2.67 billion and US$1.98 billion upon once utilising a spot gold price of US$4600/oz.
As the project continues to take shape, the gold developer has also announced two changes to its management team.
The first, which is subject to shareholder approval, is the appointment of Allied Gold chair and chief executive Peter Marrone as Challenger’s non-executive chair-elect, succeeding Eduardo Elsztain, one of Argentina’s wealthiest people.
Should Mr Marrone’s appointed be approved, Mr Elsztain will transition to a non-executive director role.
Earlier this year, Mr Marrone, who has more than 35 years of mining, business and financial experience, also played a key role in Zijin Gold International acquiring Allied for C$5.5 billion.
Along with Mr Marrone’s arrival, Challenger has also appointed Yohann Bouchard as its chief operating officer.
Mr Bouchard is no stranger to the San Juan region, having overseen Yamana Gold’s mining operations both there and in Latin America. He joins the company following senior management roles at both Andean Precious Metals and New Gold.
Canada-based Yamana was founded by Mr Marrone in 2003 and acquired by Pan American Silver and Agnico for US$4.8 million in 2023.
“The addition of Peter Marrone to the Challenger board as chairman-elect and Yohann Bouchard as COO is transformational for the strategic direction of Challenger,” Mr Elsztain said.
“This appointment and the commitment by Peter and other lead investors of $10m into the Challenger placement provides a strong vote of confidence in Hualilán and follows a period of extensive due diligence by Peter and Yohann.
“Challenger looks forward to the involvement of Peter and Yohann in the future leadership and direction of Challenger to ensure the company reaches its full potential and I look forward to working with Peter and Yohann on the board of directors in my continuing position on the Challenger board.”
Under its most recent significant capital raise, Challenger told the market it would tap investors for $85 million, courtesy of issuing around 708 million new fully paid ordinary shares at 12 cents per share.
This price represents an 11.1 per cent discount to the gold explorer’s closing price of 13.5 cents prior to entering its trading halt on May 7.
Within the capital raise, Mr Marrone ($8 million) and additional lead investors ($2 million) have committed to subscribe, along with affiliates of Mr Elsztain subscribing for $5.3 million.
Euroz Hartleys, Sternship Advisers and Evolution Capital were all appointed joint lead managers to the placement, while Hannam & Partners operated in a co-manager capacity.
Proceeds from the capital raise will be primarily be allocated towards finalising Hualilán’s definitive feasibility study, an extensive resource growth drilling campaign along with funds towards preparation of the project’s standalone development.
Challenger last traded at 14.5 cents, up 7 per cent, as of 10.38am AWST.
