Challenger Gold Toll Milling Strategy Accelerates Hualilán Production

Strategic Partnership Framework Delivers Operational Excellence

Challenger Gold Limited (ASX: CEL) has executed critical service contracts for its flagship Hualilán Gold Project toll milling phase, partnering with ORICA, a global explosives leader, and THOR S.A., one of Argentina's largest drilling contractors. This Challenger Gold toll milling strategy positions the company for mining operations to commence within weeks.

The Casposo toll milling plant refurbishment and commissioning has been completed, with operations currently processing lower-grade stockpiles. ORICA and THOR are mobilising to site by end-October 2025, with blasthole drilling scheduled to begin no later than the first week of November 2025. This timeline positions Challenger for near-term cash flow generation from one of Argentina's most advanced undeveloped gold assets.

The newly executed contracts demonstrate Challenger's approach to risk mitigation through established local expertise:

ORICA Contract Highlights:

• Multi-year supply agreement covering 2025-2028
• Provision of bulk explosives, initiating systems, and on-site blasting services
• Selected through competitive tender based on proven safety performance and established logistics network

THOR S.A. Contract Details:

• 24-month drilling services agreement for blasthole drilling activities
• Coverage across approximately 3.2 million tonnes of ore and waste material
• Flexibility for up to three concurrent work fronts across the mining program
• 20+ years of continuous operations in San Juan Province

CEO Commentary
"We are pleased to partner with ORICA and THOR as we take this next step toward production at Hualilán. Their technical strengths and established operational footprint in Argentina make them ideal partners for a project of this scale." – Kris Knauer, CEO

Understanding Toll Milling: The Fast Track to Production

Toll milling represents a strategic approach that allows mining companies to process ore through existing facilities rather than building new processing plants. Furthermore, this method significantly reduces capital requirements and accelerates time to production.

For Challenger Gold, the toll milling strategy involves transporting mineralised material from Hualilán 165km via established roads to the recently refurbished Casposo Plant. The facility has an impressive operational history, having produced over 323,000 ounces of gold and 13.2 million ounces of silver during previous operations.

Key advantages for investors:

• Reduced capital expenditure compared to building standalone processing facilities
• Faster path to cash flow generation leveraging existing infrastructure
• Proven processing capabilities with historical recoveries of 90% for gold and 79% for silver

This approach allows Challenger to capitalise on current high gold prices whilst generating funds for the larger standalone Hualilán Gold Project development. Consequently, the Challenger Gold toll milling strategy provides an optimal balance between risk mitigation and value creation.

Production Timeline and Next Steps

Challenger has established a clear pathway to production with defined milestones:

Immediate Actions (October-November 2025):

• ORICA and THOR mobilisation to site by end-October 2025
• Blasthole drilling commencement first week of November 2025
• First blast operations to follow shortly thereafter

Toll Milling Framework:

• Minimum 450,000 tonnes of near-surface mineralised material over 3 years
• Processing at the Casposo Plant, which recommenced commercial operations in October 2025
• Target extraction of only 3% of the 2.8 Moz Hualilán Mineral Resource

Compelling Investment Economics Drive Value Creation

The toll milling strategy delivers exceptional economics that position Challenger as a compelling investment opportunity in the current gold price environment. In addition, the company's financial projections demonstrate robust returns across various pricing scenarios.

Outstanding Financial Metrics (at current spot prices ~US$4,000/oz Au):

• EBITDA: US$195 million over three-year toll milling program
• Post-tax NPV₅: US$110.4 million
• Cumulative post-tax free cash flow: US$134 million
• All-In Sustaining Cost (AISC): ~US$1,454/oz AuEq

Conservative Economics (US$2,500/oz Au baseline):

• EBITDA: US$88.0 million
• Post-tax NPV₅: US$50.5 million
• Cumulative post-tax free cash flow: US$56.7 million

The company's competitive AISC of ~US$1,454/oz AuEq provides substantial margins even in conservative pricing scenarios. However, the true value proposition of the Challenger Gold toll milling strategy lies in its ability to generate immediate cash flow whilst preserving resource upside potential.

Resource Quality Underpins Long-Term Value

The Hualilán Gold Project's resource quality provides exceptional foundation for the toll milling operation. For instance, the high-grade core contains 9.9 Mt at 5.0 g/t AuEq for 1.6 Moz AuEq, representing some of the best grades in the region.

Furthermore, the 2.8 million ounce gold equivalent Mineral Resource at Hualilán offers significant expansion potential beyond the initial toll milling program. The strategic approach of extracting only 3% of total resources ensures maximum flexibility for future development phases.

Additional exploration upside includes the 4.5 million ounce gold equivalent resource at El Guayabo, Ecuador, providing further diversification opportunities for the company's portfolio.

Why Investors Should Track This Gold Producer

Challenger Gold represents a unique opportunity in the Australian gold sector, combining near-term production capability with significant resource upside. Moreover, the company's strategic positioning offers multiple value creation pathways.

Resource Scale and Quality:

• 2.8 million ounce gold equivalent Mineral Resource at Hualilán
• High-grade core of 9.9 Mt at 5.0 g/t AuEq for 1.6 Moz AuEq
• Additional 4.5 million ounce gold equivalent resource at El Guayabo, Ecuador

Production Positioning:

• Toll milling extracts only 3% of total resources, providing massive expansion potential
• Near-term cash flow generation to fund standalone processing development
• Strategic location in San Juan Province, a proven mining jurisdiction

Market Opportunity:

• Positioned to capitalise on current high gold prices above US$4,000/oz
• Established infrastructure reducing execution risk
• Local contractor partnerships ensuring operational reliability

Key Investment Takeaway:
Challenger Gold has positioned itself as Argentina's next gold producer, with significant upside potential from its 2.8 Moz Hualilán resource. With production milestones approaching in November 2025 and compelling economics at current gold prices, investors should monitor this emerging producer as it transitions from development to cash flow generation.

The combination of proven resources, established processing partnerships, and imminent production positions Challenger Gold as a compelling growth story in the precious metals sector. Consequently, the successful implementation of the Challenger Gold toll milling strategy could establish the company as a significant regional gold producer with substantial long-term growth potential.

Ready to Capitalise on Argentina's Next Gold Producer?

With ORICA and THOR mobilising to site by end-October and blasthole drilling set to commence in the first week of November 2025, Challenger Gold is positioned to transition from development to cash flow generation. The company's strategic toll milling approach offers investors exposure to exceptional economics with US$195 million EBITDA potential at current gold prices, whilst preserving 97% of the 2.8 million ounce Hualilán resource for future expansion. To explore how Challenger Gold's imminent production timeline and compelling investment metrics could fit within your portfolio, visit www.challengergold.com for comprehensive company information and the latest operational updates.