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ReGIonAL RoUnD-UP LAtIn AMeRIcA

But wait, there’s more

ot off the heels of releasing a 2.1 moz scoping study on the project in Q1 next year in ground at roughly $100/oz, [earlier this
Hgold equivalent maiden resource for the following the resource upgrade. year] we would have been valued at $150-
Hualilan project in Argentina, Challenger Ex- “We kicked off some of the engineering $200/oz because there’s some really nice
ploration Ltd managing director Kris Knauer and geotechnical work and environmental high-grade components and as we keep
says an upgrade could come as early as baseline management,” Knauer said. drilling, we’re finding more high-grade than
November. “I don’t think the market understands how low-grade.”
“That resource was based on 125,000m robust and low-cost this project is. We re- Challenger’s current discovery cost is
of drilling from a 204,000m programme,” cently got a quote for 60-70c/L diesel deliv- $US8.20/oz gold equivalent. But Knauer
Knauer told Paydirt. “I don’t think the mar- ered to site, we can get power from the San keeps the blinkers on and tries to not let the
ket understands we only recently finished Juan Government or the power utility which gold market and costs distract him from get-
about 197,000m of that programme, so is pure hydro and solar power at 10c/kWh. ting on with the job.
we’ve got the best part of another 40,000m “We would pay a skilled mine worker “I don’t have any real expectations for
of assays pending and the market, you just
30,000m of core to be have to make sure
cut, sampled and sent that whether the gold
to the lab.” price is $US1,400/oz or
The core included in $US2,400/oz, your pro-
the maiden resource jects will make money
estimate – which or there’s a pathway to
Knauer stressed to the make money at a low
market was an interim gold price and a high
resource estimate – gold price,” he said.
covered just 2.2km of a Knauer also con-
total 3.5km strike. tends that Argentina
“Mineralisation [is] has outperformed its
open in all directions, Latin American peers
this interim resource in business funda-
provides a window to mentals as a means
the substantial potential to attract more foreign
at Hualilan,” he said in a expenditure. In mid-
June market release. July, Chinese company
Before publishing the Ganfeng Lithium Co.
maiden resource, Chal- Ltd bought two lithium
lenger had undertaken The volume of core at Challenger’s Hualilan gold project in Argentina signals a swift upgrade to carbonate-producing
an internal review of the maiden resource released in June salt lakes from Lithea
the project where “just Inc for $US962 million,
over 1 moz” of gold in a clear sign inter-
equivalent was delineated while one-third of there about $US1,500-2,000/month. So, national investors are willing to reconsider
the way into the drilling programme. Knauer two thirds of our costs are less than a third Argentina after a decade in the wilderness.
anticipates that pace will be maintained. of what Australian or US mining costs are.” In contrast, Chile’s constituent assembly
“We expect the next 40% of drilling to de- While bullish on the exploration and de- in March approved an early-stage proposal
liver almost metre-for-metre what the first velopment front, Knauer continues to feel to nationalise its copper and lithium mines
62% of drilling has given us,” he said. dismayed at the market’s response to the which are some of the largest in the world.
If the first bout of drill results following the work thus far. The proposal received 13 votes, three
maiden resource are anything to go by, then After releasing the resource for Huali- against and three abstentions. The policy
Knauer’s confidence could be warranted. lan, Challenger shares fell more than 30% change, which would make it easier to en-
Standout hits later in June included 2.4m in value to trade at 18c each at the time of act new laws and create uncertainty for for-
@ 64.7 g/t gold equivalent, 3.7m @ 8.5 g/t print. eign investors, approaches a final vote on
gold equivalent and 6.6m @ 6.4 g/t gold This devaluation is despite Challenger September 3.
equivalent. meeting all guidance, prompting Knauer “We’ve recently seen different countries
“Once we get more assays back, we’ll re- to point towards a weakened gold market like Argentina and Ecuador become more
lease the upgraded resource later this year. that has taken a particular hit the past six attractive than Chile, which was a go-to
Worst case, it would be in December, but months, burning mid-tier producers such as destination but is now nationalising assets,”
I’m hoping for November,” Knauer said. “To St Barbara Ltd which recently fell as low as Knauer said.
turn around 85,000m of core at a time of 75c/share. “Meanwhile, the Argentinian Govern-
worldwide delays, that’s roughly what it will “We previously told the market we hoped ment has made a dedicated effort to get
take. to start with 2 moz, which we did,” he said. mines into production because they know
“Based on drilling since the resource cut- “It’s really nice high-grade core with 1.1 moz they need foreign currency.”
off date, we expect this trend of significantly @ 5.6 g/t gold equivalent. [I believe it will]
more skarn to continue which will be a ma- be Argentina’s next mine. Unfortunately, we – Fraser Palamara
jor boost for the project.” put it out into a [weak] market.
Challenger also anticipates releasing a “Right now, the market is valuing 2 moz

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