Challenger Gold secures first US$2M drawdown from US$20M toll milling finance facility

The initial US$2M (~AUD $3.2M) Tranche 1 proceeds will be used for early works associated with preparation for mining to support Toll Milling, general corporate overheads and working capital.

Challenger Gold (ASX: CEL) has taken a significant step forward in its mining operations, drawing down the initial US$2 million from a larger US$20 million project finance facility aimed at supporting its Toll Milling operations in Argentina.

The facility, arranged by Middlegate Securities Inc. and ECM Capital Advisors Inc., will provide critical funding for early-stage mining preparations, general corporate overheads, and working capital. The drawn-down amount (~AUD $3.2M) represents Tranche 1 of the agreement and comes with flexible, investor-friendly conditions.

Under the facility's terms, the interest rate is set at 8.5% if repaid before December 7, 2025, and 12.75% thereafter, with repayment structured as a bullet payment once toll milling generates its first cash flows. Notably, the loan is unsecured and allows voluntary prepayment without penalty—a structure uncommon in the mining finance sector.

Strategic financial boost for the Hualilán gold project

The funds will primarily advance activities related to Challenger’s flagship Hualilán Gold Project, where the company recently released an updated Mineral Resource Estimate (MRE) indicating 2.8 million ounces of gold equivalent (AuEq) across both indicated and inferred categories.

As per the agreement, export proceeds from toll milling will be routed through an escrow account managed by Banco Comafi, ensuring that loan obligations are prioritized and fully settled before funds are released to the company.

"This initial drawdown marks a milestone in our financing strategy and allows us to advance preparatory work for mining operations," said Kris Knauer, Managing Director of Challenger Gold. “We appreciate the confidence shown by Middlegate and ECM in the strength of our project.”