Outstanding Hualilan Gold Project Metallurgical Test Results Transform Economics

Outstanding Metallurgical Results Set to Transform Project Economics

Challenger Gold Limited (ASX: CEL) has announced significant metallurgical breakthroughs at its Hualilan Gold Project, with final testwork now underway ahead of the full-scale Pre-Feasibility Study (PFS). The latest results confirm heap leaching as a viable processing route for the project's substantial low-grade mineralisation, potentially transforming the economic outlook for Hualilan.

The column leach tests have delivered exceptional gold recoveries averaging 75% and reaching up to 85% in optimal conditions. These results are remarkable in the heap leach space, where typical industry recoveries range between 55-79% and average 60-65% globally. Even more promising, strong recoveries were achieved at a relatively coarse half-inch crush size, which significantly reduces processing costs compared to finer crushing requirements.

"These final stages of metallurgical testwork mark a major milestone as we move toward delivery of a full-scale PFS for Hualilan," said Managing Director Kris Knauer. "The outstanding heap leach results confirm the viability of processing low-grade material that was previously excluded from economic evaluation. This could materially enhance the scale, economics and development pathway for Hualilan, positioning it as a standout gold project in Argentina."

Game-Changing Results for Low-Grade Material

The heap leach testing program revealed several key findings that could dramatically alter the project's economic profile:

• Excellent recoveries at low grades: Tests demonstrated strong gold recoveries even at very low grades, with 67.2% recovery achieved from material grading just 0.15 g/t gold
• Consistent performance across rock types: Dacite returned 66-87% gold recovery across grades of 0.1-1 g/t, while lutite showed 64-91% recovery across grades of 0.2-1 g/t
• Optimal crush size identified: Recovery up to 85% was achieved at a half-inch crush size, balancing recovery performance with operating costs

These results are particularly significant because they open the potential for Challenger to process vast amounts of material previously considered waste. The 2023 Mineral Resource Estimate included 74.3 million tonnes of material above a 0.2 g/t AuEq cut-off, containing 2.9 million ounces of gold equivalent. This represents a substantial increase from the 7.2 million tonnes contemplated in the earlier Scoping Study mine plan.

Understanding Heap Leaching in Gold Mining

Heap leaching is a widely used extraction method in the gold mining industry. The process involves:

1. Crushing the ore to an optimal size (in this case, half-inch)
2. Stacking the crushed material on an impermeable pad
3. Irrigating with a cyanide solution that dissolves the gold and silver
4. Collecting the pregnant solution containing dissolved metals
5. Processing through carbon adsorption or Merrill-Crowe to recover the precious metals

This method offers several advantages over conventional processing:

• Lower capital expenditure: Heap leach facilities require significantly less infrastructure than conventional mills
• Reduced operating costs: Less energy-intensive with fewer moving parts and maintenance requirements
• Economic processing of lower grades: Can profitably treat material that would be uneconomic through conventional methods
• Scalable operations: Can be expanded incrementally as needed

For Hualilan specifically, heap leaching allows Challenger to potentially convert large volumes of previously overlooked material into valuable resources, extending mine life and enhancing project economics.

Final PFS Metallurgical Work on Track

Challenger reports that all metallurgical testwork required for the stand-alone Hualilan PFS is on track for completion by early Q4 2025. Current activities include:

• Sequential flotation grind optimisation tests, allowing trade-off studies between grind size and recovery
• PFS-level comminution testwork program commencing in July
• Large diameter column leach testwork for scale-up of column test results

The completion of this work will provide Challenger with comprehensive metallurgical data to support the full-scale PFS, incorporating both the conventional flotation circuit for high-grade material and the heap leach processing route for lower-grade mineralisation.

Strategic Implications for Project Economics

The addition of a heap leach processing route creates transformative opportunities for the Hualilan project:

Testing Program Details

The comprehensive heap leach testing program conducted by Challenger consisted of three panels of column tests:

Panel 1: Initial tests on composite samples at 1/4-inch crush size returned encouraging gold recoveries of 64.6% and 48.9%, with silver recoveries of 61.4% and 57.5% respectively.

Panel 2: Focused on understanding the impact of lithology and grade on recovery, with 11 column tests at 1/4-inch crush size. Results showed:

• Dacite: 66.0-86.5% gold recovery across grades of 0.15-0.94 g/t
• Lutite: 64.1-91.1% gold recovery across grades of 0.18-0.81 g/t
• Calcite: 7.2-51.4% gold recovery across grades of 0.19-0.84 g/t (calcite represents only ~10% of the overall low-grade material)

Panel 3: Evaluated the impact of crush size and fines content, testing dacite and lutite at coarser crush sizes of 1/2-inch and 1-inch. Strong gold recoveries were maintained at 1/2-inch, including 81.3% for dacite at 0.90 g/t and 85.4% for lutite at 0.35 g/t.

Why Investors Should Follow Challenger Gold

Challenger Gold has positioned itself at a critical inflection point with these metallurgical breakthroughs. The company is methodically de-risking the Hualilan Project through technical studies while simultaneously expanding its economic potential.

The combination of high-grade material (suitable for conventional processing) and extensive lower-grade mineralisation (now viable through heap leaching) creates a robust development pathway with multiple processing options. This flexibility could prove invaluable in optimising project economics and adapting to market conditions.

With heap leach testwork confirming excellent recoveries even at very low grades, Challenger Gold metallurgical test results have effectively unlocked value from material previously considered waste. This "free" addition to the resource base could dramatically enhance project economics without proportionally increasing mining costs.

As the company advances toward completion of its full-scale PFS in Q4 2025, investors should watch for further updates on metallurgical optimisation, mine planning incorporating both processing routes, and the resulting economic projections. The transformation of Hualilan from a high-grade, limited-tonnage project to a potentially much larger operation with multiple processing options represents a significant re-rating opportunity.

With Argentina's established acceptance of heap leaching technology, as demonstrated by operations like Veladero (Barrick Gold) and Gualcamayo (Minas Argentinas S.A.), Challenger appears well-positioned to advance Hualilan toward becoming one of the country's standout gold development projects.

Ready to Capitalise on Challenger's Metallurgical Breakthrough?

Discover how Challenger Gold's exceptional heap leach recoveries could transform the economics of the Hualilan Gold Project and potentially deliver significant value for investors. With the ability to process previously uneconomic material and dramatically increase the resource base, Challenger is positioning itself as a standout gold developer in Argentina. To learn more about this compelling investment opportunity and stay updated on the upcoming PFS results, visit www.challengergold.com today.