Challenger Exploration

Primary ticker: ASX:CEL
Stage of development: Exploration
Commodity: Copper, Gold
Project to promote: Hualilan Gold Project

Live financials

CEL has two complimentary South American Projects. Our 75% owned Hualilan Gold Project in San Juan, Argentina, has a resource of 627,000 Oz at 13.7 g/t gold which remains open in all directions. The project had seen no exploration for 15 years prior to its acquisition by CEL. We have started our maiden drilling program which has two aims. Infill the existing resource to support a DFS and extend the mineralisation. Our Project in Ecuador was last explored 25 years ago when Newmont undertook a scout drilling program. This returned results including 156m @ 2.6 g/t Au + 9.7 g/t Ag + 0.2% Cu and 112m @ 0.6 % Cu +0.7 g/t Au +14.7 g/t Ag which were never followed up. CEL has recently completed a 16 sq km 3D MT which was designed to better define the multiple porphyry targets prior to drilling.

Management Profile

Kris Knauer, Managing Director

Kris started his career as an exploration geologist before moving into investment banking, initially as a mining analyst.

He is an experienced listed company CEO. He led the listing of a package of copper/gold assets in Saudi Arabia to create Citadel Resources (ASX : CDG) becoming the founding Managing Director. Kris remained on the Board of Citadel through resource definition, maiden resource, and into the DFS. Citadel completed a DFS on the Jabal Sayid copper project in Saudi Arabia prior to it being taken over for A$1 billion.

Kris funded CEL’s existing South American assets privately for the first 18 months prior to listing on the ASX as CEL.

What is your rationale for attending 121 Mining Investment?

We are seeking to boost market awareness of CEL. The company only listed 3 months ago so 121 is one of the first opportunities to present the company to a wider audience.

What recent news would you like to highlight to investors attending?

Hualilan – CEL’s recent underground channel sampling program has validated the high grade historical gold resource at Hualilan. These underground sampling results consistently exceeded the grades recorded in the historical resource by 20%. CEL has a clear path to production at Hualilan with the project having good metallurgy and indicative capex of US$25 million for a 250,000 tpa operation which would produce 60-65,000 Oz annually.
-13 Aug 2018 ASX Release – Outstanding Assay Results from Hualilan Project

Ecuador – the key risk in Ecuador is the depth to the porphyry targets and the recent geophysics has demonstrated the porphyry targets are shallow.
– 26 July 2019 ASX Release – Exciting Geophysical Results for El Guayabo Porphyry Project

What are your key goals for the next 3, 6 and 12 months?

3 Months:

– Demonstrate extensions to the Hualian Gold Project in our current drilling
– Expand this drilling program at our Hualilan Gold Project
– Increase our footprint around our existing project in Ecuadort
Define high impact drilling targets on our Porphyry project in Ecuador from the geophysics, soil sampling, field mapping and channel sampling conducted over the past 3 months.

6 Months:

– Complete a full suite of metallurgical test work on the Hualilan Gold Project to validate the last work done in 1999
– Release and initial JORC (2012) compliant resource on our Hualian Gold project
– Ongoing drilling at Hualilan to continue to expand the mineralisation which remains open
– First drilling on our porphyry project in Ecuador

12 Months:

– Second and larger resource at Hualilan Gold project
– Ongoing resource expansion drilling at Hualilan
– Commence a Scoping Study on the Hualilan Gold project
– Confirm a porphyry discover on our project in Ecuador

What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

Funding risk given our project is in Argentina – Demonstrate to the market that mining approvals are all governed at the provincial level in Argentina and San Juan Provence in Argentina is fully supportive of new mines.

Exploration risk in Ecuador – Fully integrate all soil mapping, channel sampling and drilling data (including measurement of the MT, chargeability and mag susceptibility response measured from core) into a 3D model. Use this model to do constrained inversions of the geophysical data (and if required acquire additional geophysics) prior to drilling.

What do you think makes your company such a compelling investment?

We are trading at a significant discount to our peers in terms of market cap per ounce. We have a clear, and low cost, pathway to be a bottom quartile cash cost gold producer. We are located in a pro-mining jurisdiction and have sufficient cash to advance our projects over the next 12 months. Additionally we have a world class porphyry exploration project which is not yet factored into our valuation.