Challenger Gold Limited (CEL.AX) Earnings Call Transcript & Summary

I'm Chloe Hayes from JMM Investor and Media Relations. And joining me today is Kris Knauer, Managing Director of Challenger Gold. It's been a busy period for the company with final permits approved, a major operating contracts in place and a $30 million institutional raise completed to support the next phase of growth. Together, these milestones mark the final steps toward first gold production in early 2026 and further strengthen Challenger's position as it moves from development into production. [Operator Instructions] And with that, I'll hand over to you, Kris.

Thanks, Chloe, and thanks very much for attending shareholders. What I'll do this morning is I'll run through a sort of 10- to 15-minute update and then we'll sort of throw it over to questions. And having had a look at the questions already, I think they're all fairly similar, which is why did you raise the $30 million and what do you need it for, which I'll go through. And then we'll sort of run through any other questions. So it will be a fairly bridge deck where really I'll just talk about what has changed given we're all shareholders on the webinar. So sort of firstly, look, again, a quick update of Challenger. 2.4 billion shares market cap at current price about $290 million. And pro forma cash, when we look at sort of today's cash balance, what comes in from the placement around about $52 million. And I'll walk through sort of where that goes, but a large chunk of that disappears in working capital over the next sort of 3 months as we get to first gold production. Board, 22% shareholding. So we all have skin in the game. In terms of the highlights and what we've got to look forward to, toll milling now is advancing on track, albeit with the toll milling plant being about 2, 2.5 months behind schedule, which we can't control. But effectively now, we're on track for first drill and blast actually should be tomorrow. First mining starts early December and then processing in January. And what the numbers look like there are with $4,000 gold, it spits off about USD 130 million after-tax cash flow over the 3 years of toll milling. It really is a sort of company-changing outcome for us that lets us fund the larger operation. Fully permitted, I think we didn't have our final couple of permits through last time we did a webinar, but we're now fully permitted for everything. And again, we're tolling 3% of that resource to generate that sort of USD 195 million EBITDA or $130 million cash, and that's the oxide. So what we've done is give up a little bit of the resource in order to effectively fund the larger operation and become 150,000 ounce a year producer after toll milling. In terms of the key people, I'll talk to Bira De Oliveira here. Now Bira has been our sort of General Manager there for 4 months. So where we are now is under Bira, we've got a mining team built out of around about 42 people on site. They've been there now for about the last month. We've got a couple of hires still in train, no sort of critical sort of hires still to come, but you've got sort of the mining team built out now. And then in terms of the capital raise that was just completed, Helikon and L1, you'll see from their substantials when they come out probably Monday or Tuesday next week, went along pro rata. And the bulk of the rest of that sort of $30 million was done to a large North American long-only gold funds and a large European long-only gold fund. And then there was one sort of long-only fund out of Asia that sort of did the bulk of it. So effectively, most of that $30 million went to sort of 5 funds that are all long-only gold funds. They're under sort of substantial, but 2 of the European and the North American fund, but they are quality long-only gold funds that have the following. Argentina, there were midterm elections last weekend. So the market was quite concerned about what was going to happen there. Great result for us in Argentina. Milei, the current President, who is pro-business increased his majority by 10%. And what that has effectively done is given him a license to continue with these reforms. A key part of that reform is the new Mining Act, which is legislated and the floating of the currency. I've mentioned it to shareholders before that the real problem with Argentina up until really 6 months ago was that you produce gold, you sell that gold bar, you get paid in U.S. dollars. And you've got 5 days to convert that U.S. dollar sale into pesos and you've got to hold it as pesos. And that simply doesn't work if you've got 100% inflation and you've got a sort of 50% spread between the official market and the nonofficial market, you've got to cross to get U.S. dollars out of the country. You sort of fast forward now and the new Mining Act drops the tax rate from 35% to 25%, helpful, but our project carries it. It removes the need to convert U.S. dollars into pesos and you can repatriate dividends up to your profits. So you've got an unlimited sort of dividend repatriation life of mine fiscal terms. And then you look at the current situation now, the RIGI is not really necessary anymore, the new Mining Act. What you've got is the currency is being floated. There is really no spread between the official and the nonofficial rates, getting pesos and U.S. dollars in and out of Argentina now is like converting Aussie to U.S. So that's really removed any impediment that was there to Argentina. And look, it's those changes that have seen BHP commit the $3 billion with the Lundin [indiscernible] which is Josemaria Filo, which is in San Juan Province. It's the reason that Rio have committed the $1 billion CapEx for the Salar. So Argentina is now a go-to destination. And last weekend's election midterms really reaffirm that. They've now given the country and all the investors a really big sort of sense of confidence. And the sort of larger project, which we very much know is the price. I mean I think the market is not really buying us for the value in toll milling. They're looking at the value of the overall project. That pre-feasibility study is definitely on track for first quarter next year, and it will be a totally different scale to the sort of larger -- sorry, to the scoping study that was 120,000 ounces a year over 7 years. We've sort of closed off the open pit work that I'll walk through a little bit later. But that larger project produces about 1.8 million ounces of recoverable gold over a sort of 11- to 12-year mine life. So it's going to be a low-cost, long life plus 150,000 ounce a year producer and some real value in there. Our share price is certainly not reflecting that at the moment. And then Ecuador, sort of the quick update there on that asset. We've announced that we intend to monetize it, and we do. The takeover of Lumina Gold, which is the 26 million ounces next door to us is now completed. That was sold to CMOC Group, which is a Chinese consortium for about $25 an ounce, you drag through a valuation to sort of our net 7 million ounces there. And really, we've got the other half of that deposit. The core looks the same, the grades are the same. It's the same stuff. You go to their core shed, they come to our core shed. It's part of the one big system. So the look-through valuation there is about AUD 170 million, which is half our -- more than half our current market cap. Now I'm not going to try and convince shareholders that we're going to sell it for $170 million and quickly. We have got a dialogue going in terms of the situation with the CMOC acquisition. It doesn't close on the ground until the end of December. I know because we've had a couple of the sort of senior Lumina technical people call us and say, we're available in January, if you'd like sort of us to come across and work for you. But the aim here is to monetize that project. We see CMOC as the logical buyer. We'll see where we get to. It will take a reasonable amount of time. And look, if we don't get anywhere, we're also mindful that we've had some inbound interest predominantly out of China and the view is that the 9 million ounces we've got the net, the only sort of natural buyer for that is the buyer of Lumina. But if that resource is sort of 15 million ounces, then you potentially open it up to a number of different buyers because it's a different scale. So the aim here is we'll aim to monetize that for shareholders. It will probably take us some time. The fallback is if we don't get a deal done with CMOC that's acceptable, we're generating cash, then we'll look to roll that into another vehicle in Canada where we've had quite a few inbound approaches. Or potentially if we're forced to and gold is still up here, we can always do a bit more drilling and add scale. But really, the intention is to sort of divest that asset. But we now, with this $30 million raise, have sort of flexibility to -- if we don't get the appropriate value, we're not forced to sell that asset. On the deposit, probably the key point I'm going to make here is this is a couple of sections. This resource remains open in all directions. The deepest hole in that section there, that hole intersect the mineralization of 450 meters ended in 28 meters at 5 grams. Biggest hole here on this section, again, this is sort of down around about sort of 350 meters. That hole ended in 42 meters at 6. I don't think the market sort of remembers that the deposit is open in all directions. We've stepped out and drilled a hole right out on the sort of left-hand side there that intersected the mineralization another sort of 600 meters below that deepest hole. So we know the mineralization is open down to a kilometer and that resource right now is only down to about 450 meters. So once we are in cash flow, we're up and running, producing probably from the larger operation. We do have plenty of exploration potential there. We've really only scratched the surface. Simple metallurgy, the one thing that we are looking at as part of the pre-feas with Asanko is can we actually simplify that again. We've already got the grind size up from 75 to 90 microns. But we're just sort of looking through there to see if we can actually drill lower the CapEx and sort of simplify that circuit again. But look, it's vanilla, well-understood metallurgy. We're not doing anything that's out of the box or different. And then the other key here is what I'm showing you is sort of the resource at various cutoffs. That scoping study looked at sort of the yellow band on the right, the 2.4 million ounces -- sorry, the 2.4 gram cutoff grade, where we're accessing about 1.4 million ounces. We've run the resource at 0.3 of a gram, which is sort of the 60 million tonnes for 2.8 million ounces. If we look at sort of the current gold price really anywhere above $3,000, then there's another sort of down to 0.1 of a gram. There's another 30 million tonnes of mineralization in there. And at sort of current gold price, we get really good recovery out of that 0.1 gram material, so circa 60% on the heap leach. The cost of doing that are around about $3.50, $3 a tonne and then another $2 a tonne CapEx. So we actually make money out of 0.1 gram material at gold price anywhere above $3,000. So there is a lot of room, and we won't do it in the pre-feas. We'll stick the cutoff to about 0.2, 0.25 gram, but there is a lot of room in the pre-feas and later on to add more ounces and significantly lower the strip ratio and just improve the project around the margins. And then all I'll talk to here is the pink blobs on the right, they're intrusives, they're the intrusives of the same age, the same composition as the intrusive that sourced Hualilan. We've got almost 3 million ounces on 3.5 case of strike. You can see the black dots there are the drilling. We know we've got another 6 of those intrusives. We know they're all the same age, the same composition. Again, there's so much exploration potential at Hualilan that over the past 3 years, we just haven't had the money to do. But once we're generating cash, then we can start to step back and look at some of those opportunities as well. But again, very sensibly out of cash flow. And really the focus for the next sort of 12, 18 months is making sure that we have cash in the bank that funds us into the larger project before we sort of look to do any of those sort of add-on exploration work. Just a quick update on where we are with toll milling. We put out in our placement announcement. So where we are is the toll milling plant only sort of kicked off starting operating around about 10 days ago, which was unfortunately about 2.5 months behind where we were told. We sort of had the decision of do we try to push our material through in there in November, and we run the risk that plants always have commissioning issues do we jam our material in and potentially have to come out to the market and say, for the first month, we've only got 50%, 60% recovery. Or do we allow the Austral team 2.5 months to sort of ramp that plant up and get it operating at full capacity, which we think is safer, hence, the sort of the pushback of our first milling until probably the second week in January. But sort of where we're at now is this is the sort of toll milling startup. We started in the Sanchez pit. We've got access to Sanchez pit now. All of those on-site roads, all that infrastructure is in. I'll show you some photos. And the other key is that we do have excess dozer and grader capacity. So the infrastructure you see there is as approved for the larger operation. Over the next 2 years, all the pads and the sort of road down to sort of the road base will be prepared because we've got excess dose and grade of capacity. So the aim here is very much to go seamlessly from toll milling into the larger operation. And we're building 1 truck shop bay out of 7, 1 wash pad out of 7, sort of 1 warehouse bay out of 7. But everything is going where it needs to be for the larger project. And then we'll sort of use that excess capacity we've got to build out all the pads so that we do hit the ground running. And then this is just sort of an update on what the financials look like. As you can see there, we want to look at sort of $3,500 gold. You're looking at spinning out about USD 160 million EBITDA over the 3 years or the best part of AUD 100 million a year EBITDA at $4,000 gold numbers are better, but even down at sort of $2,000, $2,500 gold, it is a really robust project. The all-in sustaining cash cost is about $1,400 an ounce. So at $2,500, we're still making $1,100 an ounce, and it spits out around about $90 million EBITDA and the best part of sort of USD 70 million to USD 80 million or AUD 110 million after-tax cash. So it is a really robust startup this toll milling regardless of where the gold price is. These are just some photos showing progress on site. So what you can see here is sort of all the surface infrastructure, and this photo was around about 2.5 weeks old. That's been put in the workshops, the ORICA yard, the ROM pad is now complete. All of the sort of pads are down. We now have the concrete pads for the warehouse and the workshop pads going down. We weren't actually going to use concrete pads. We're going to use just sort of gravel bases, which is what we've done for our core shed. But around about 3 weeks ago, we had really strong winds come through that knocked over 2 containers that were stacked up. So what we've done is we've put down concrete pads and we'll tether the container workshops into those. So that's added about USD 0.5 million to CapEx, but that is the only CapEx overrun, and we've actually pulled a couple of million dollars out of CapEx and delayed that as well. But all the infrastructure well and truly on track. This is sort of showing you access to the Sanchez pit, which is the first pit we start. We've now built that sort of access road and flattened that pad at the very top of the pit there, where we've got flat pad for the drill and blast guys to start. And I think they've got a rig sitting there now and ready to start drill and blast tomorrow, and then we'll mine down that hill. Same thing with Norte. We've got an access ramp there ready to the top of the Norte pit. We've probably got a little bit of waste there to dump just to get us to the very top, but largely got the access down to Norte as well. This is sort of showing you the aerial over the access pits on the left. But then this is ORICA's explosive magazine, which is sort of now built what ORICA want because it's in a minute blasting because of small-scale mining. We've sort of got enclosed yard with pad for them to park the truck on. They'll bring the truck in. They'll sort of load explosives and probably detonate all in a day and then take the truck out, but they do need that area in case they're there overnight. Photos below that are a water storage dam. Now we don't need this water storage dam. We don't need to use that one bore water. However, the government has asked that we will. We've identified a sort of massive water resource that will cover off processed water for about 100 years. And we're more than happy to use that because what it does is at the moment, we're taking water from a natural spring about 12, 13 kms away. This sort of dam is built and we've got a pipeline now that's installed, which I think is on the next photo, that pipeline on the left is now sort of in that's been fully covered up. But effectively using that boil water, the pumps are in place. We're just waiting final sort of water use permits saves us around about USD 25,000, USD 30,000 a month in water carting. Photo top right, that was taken the day after we announced or signed a drilling contract. That's the initial sort of mobilization for the drilling contractor. They're fully on site now. As I said, ready to start drilling blast tomorrow. And then we did have our core shed sort of within the blast radius for the Sanchez pit. So they're largely dismantled and moved now. They've been put up in our permanent camp area. They're well and truly on track to be totally gone by the time our first blast, which is currently scheduled for November 15 is done. And then this is showing you some of the on-site roads. On-site road network now all done to a reasonably high quality, certainly, all that we need for the next 3 years of toll milling. And then one of the things with moving to a contractor, they wanted sort of radio access. So we've sort of built that road up to sort of a low-mountain range, the other side of the highway. And that's all now prepared. The civils are being done now. That will have sort of the radio antenna fully up and running by November 28, which is a safety thing. But we've now got sort of high-quality radio communication no matter which side of the bridge line all around site. So toll milling, very much on track to have all the infrastructure finished by the time we start first mining, which is 1 December. And then in terms of the team on site, what I'm showing you here is an organizational chart. So the sort of roles there that are in blue and green have all been filled. The blue are internal transfers. The roles there they're in orange and are actually in the process of being filled. We've actually got all of those part 1 filled now. We've got an offer out for that. So this is about a week old. So all of those roles have been accepted. Then the roles in gray are sort of noncritical roles. We're talking about the Deputy General Manager, who is the [indiscernible], which is a high sort of -- they'll get paid about USD 2,500 a month, the manager commercial. We want Argentinian nationals there. And what we've sort of found is that we'll get a much better sort of candidate or quality of candidate level there once we're in running and you're producing cash flow. We had a couple of high-quality candidates for both roles. So look, we don't want to resign until we see the cash flow because you're a startup, which I get. They don't want to lose a job where they're in an existing 0.5 million ounce mine and they've got safety. So we didn't need those roles until we're sort of in production. So those roles will get filled. It's just we want to fill those with quality Argentinian candidates rather than bring in expats. The key to working in Argentina is minimal amount of expats. I mean, at the moment, we've got Bira, we've got Mike, we've got [indiscernible] Head of Tech Services. So we've really got less than 10% expats. The sort of law or not law, but guidelines in San Juan Province are no more than 20% expats. Our understanding is that will be reduced down to 10%. So we want to make sure that we're within those guidelines. And that is imminently doable because there are some really high-quality Argentinian candidates around for these more senior roles. So look, we're effectively fully staffed and ready to go on site. I'll just quickly sort of update where we are with the stand-alone operation. We've had little consulting in finishing a big life of mine enterprise optimization study. The figure below is the various pit phases they've sort of broken it down into. What they do is, it's a bit like AI for mining. They look and bring in the highest NPV phases first. When we actually mine that, it won't be that complex. We've sort of taken their work, and we've broken it down into about 8 easily manageable pit phases. But when you look at that large pit, you're talking moving 700 million tonnes of waste, there's above 0.1 of a gram, there's 106 million, 107 million tonnes of mineralization. So if gold stays up here, you're looking at sort of a 6.6:1 strip ratio on that larger pit. And then we've sort of locked in the pre-feas pit where we pulled back some of the deeper stages. You're looking at something that's sort of 73 million tonnes of mineralization, 16 million tonnes going through the plant, which is 2.3 grams gold, 10 grams silver and zinc and then sort of 50-odd million tonnes of heap leach. And the key to that is this is for the pre-feas. So we've constrained this to only include 20% inferred. There is another sort of significant body of inferred material in there that dropped that strip ratio back from sort of 8.4 to 7.3:1. So it is a much lower strip ratio than that. And then if we look at that pit, we do still have some sort of significant underground potential there or depending on the gold price, we steepen up and we increase that pit. So that's the work that's now being done. So where we are is for the pre-feas, as I said, on track for first quarter, locked down the open pit sort of design is done. We're now extending that design to look at some of the sort of deeper phases, if we want to cut out the underground. The cost models are all done, processing cost models are all done. Asanko now in having a good look at just can we simplify that and then they're doing the engineering and the cost work as well for the plant. Geotech work on track. So that study will be out first quarter next year, and it will be a totally different sort of outcome. It will be a long life 150,000 ounce [indiscernible], which I think there'll be a lot of interest in from some of the mid-tiers as well. Online, as I said, on track now, processing first gold admittedly with a 2-month delay in toll milling January. That means first gold pull back into January, and we get first cash flow about 2 weeks after that, so in February. Pre-feas on track for quarter 1. That hasn't slipped at all. And the bankable, again, same thing, sort of we'd like to think we can get it out quarter 1. We're leading to quarter 2 and then FID pretty much soon after. We've had some meaningful discussions with project financiers. The aim here is -- we sort of get FID closed off at the end of that -- in middle of the year in 2027. We leave ourselves 1.5 years to construct so that we're sort of going from processing last toll ore in January 2029 to sort of offsetting that with first production out of the large operation in January 2029 as well. So wrap up, focus for us really right now, it's on getting toll milling production out of Hualilán. There has been a bit of a sort of change in focus in terms of the larger operation. What we've now rejigged is we were going to start pioneering and pre-stripping in 2026. We now can delay that until 2027 when we've got FID and we don't impact the time line. So the aim for the next sort of 15 months is going to be all about generating cash, getting that cash on the balance sheet. Then once we've hopefully got $50 million, $60 million cash at the end of 2026, and we've repaid that QRC note, then we can sort of ramp up and look to sort of accelerate on the larger operation. Same thing on studies. We're on track with the studies, and that's what we need to be. And Ecuador, really, it's a case of retain that flexibility and look to maximize the value for shareholders. And having seen the sort of first couple of questions, I won't walk through the placement use of funds. So I'll sort of answer that to the specific questions that we've got. So sort of happy to pass back to Chloe, and we can sort of work through any questions we have.

Great. Yes. So a lot of questions have come through on the recent capital raise. Basically, on the reasoning behind the capital raise this month, the June placement was set to fund the company through the first gold pour. So can you walk us through why this additional raise was undertaken and what it enables strategically for Challenger?

Yes. So look, we looked at the June raise and when that was done, we had about a $10 million buffer getting us into production, first processing in November. And so we were fully funded. So what subsequently happened is the mining contractor, the drill and blast contractor, both demanded 10% to 15% upfront payments, which they then amortize over the life of the contract. Now no mention of this 10% to 15% upfront was done in any of the RFQs or the request for quotes. We got down to a preferred mining contractor preferred or preferred to mining contractors preferred drill and blast contractor. And then the sort of draft contracts that came through had requests for sort of 10% to 15% upfront. And I suppose from our point of view, it doesn't affect your long-term cash flow. We can either say, well, we're going to go back and start the process again and cost us a little 3 months or we go talk to Komatsu and look at the owner-operated model, which we did in the pre-feas, which increases our risk. But by the time we get the mining equipment, we're looking at a 6-month delay. So we took the pragmatic approach that the sort of the 3-month upfront for the mining contractor, which really is 2 months that we hadn't budgeted. We budgeted sort of the mob fee and then paying in arrears. There's a USD 3 million, drill and blast contractor, USD 0.5 million. And then the transport operators, we're in the middle of getting final ore haulage contracts done at this stage, haven't asked for the 10% upfront, but we've really got to budget as if they do. So there's effectively USD 4.5 million or AUD 7 million that just disappeared. The 2-month delay, again, and we looked at do we jam through ore in November. And the risk there is we're announcing in December, and we've processed our first ore, and we've got 50% or 60% recovery, not 85% recovery. So you look at that, we've now got that full-scale mining team on site. Now that mining team of 45 people runs about USD 0.35, 0.4 -- USD 400,000 a month. You got your traditional corporate overheads, which is Ecuador, corporate, there's another sort of USD 400,000 a month. And then we're in the middle of finishing off the pre-feas and accelerating the bankable. So there's another sort of USD 300,000 a month there of costs until that pre-feas is done in end of February, early March. So you're looking there at USD 1.1 million a month. So you've got another $3 million there. So you get to the point where that's done and your $10 million buffer is largely done by the time you get to first cash. And then we had cut some of the CapEx back. So we still had a bit of a buffer, but we had $0.5 million CapEx overrun by laying those concrete pads in. And then Austral approached us under the toll milling agreement with Austral, they put in about $800,000 worth of CapEx specifically for us, which was a weighbridge, gravity circuit, sort of sampling tower and a bell sampler so we could properly reconcile the gold. And under the agreement, we paid that back out of first cash flow. Austral approached us about a month ago and said, look, we're struggling for cash. Would you mind paying that upfront? And so we took the view that if Austral row our money and can't complete the plant, it's not good for Challenger shareholders. So again, we took the pragmatic approach. So really where that got us to was at the end of January, which is a week or 2 before we now get first cash flow, we were sitting there with about AUD 1 million to AUD 2 million budgeted in the bank. And as a listed company. If we have a problem, then really where we get to is an emergency raise in December or January, which would have been a terrible outcome. And we also need to keep the pre-feas on track. So in the budget, you've got working capital, you've got a few million dollars for drilling because the plan was we start drilling out the resource for the bankable cash flow, which was January. Well, now January, we've probably got to start anyway before we've got cash. So there's another couple of million dollars there. And then we budgeted for sort of some additional CapEx to move the larger project along now. We probably largely don't need to spend that. But in terms of did we take 15 or did we take 30? The other thing we're looking at is really from December when we start mining, we're running a bill of about USD 1.3 million plus GST for mining, another sort of $300,000 for drill and blast, another sort of $700,000 or $800,000 month for haulage. So you're looking at burning about $5 million a month in mining fees. And let's say the plant broke down for 3 months, we can't stop mining. So the rest is really putting that buffer back to the point where really, by the time we get first cash flow, we should have about AUD 25 million in the bank. But we wanted to be bulletproof in case worst-case scenario, plants broken down for 3 months during January, February, March and April, and we don't want to have to come back to shareholders again. And also, it helps us cross any residual equity gap we would have to cross for the larger projects. So that's really sort of the use of funds and effectively why. And I will just say on that raise, in terms of the book, one U.S. long-only fund that did more than $10 million, one European long-only gold fund that did $9 million, really high-quality Asian fund that did sort of $3 million and then L1 and Helikon went along $5 million. So it was a high-quality book. I think the selling we've seen now is some of the sort of existing shareholders who weren't happy about the raise. And look, I do get that as well. That's just -- we've got to think of worst case and where we might be if we effectively got to do everything perfectly for here and something beyond our control happens with that plan.

Yes. Great. And another question here. Shareholders asked whether there are any plans for a share consolidation in the near future or if the company is comfortable keeping the current structure as you move into production?

No. Look, I think we're quite comfortable here. I mean, in terms of would we ever consolidate, look, if we don't sell Ecuador and decide to hang on to it in sort of 18 months, 2 years, we've potentially got another USD 50 million to USD 70 million equity gap to cross. If we're ever going to do a consolidation, it would be in conjunction with that. But that's 2 years out. But right now, no, I don't think we don't feel the need to consolidate the capital.

And Kris, I know you've somewhat covered this, but there's been some interest from shareholders around the opportunity to participate in future funding rounds. Is that something the company would consider to help balance dilution and reward long-term holders?

Yes. Look, it is. And the reason we didn't sort of do an SPP here was largely guided by some of the feedback we've got from shareholders at [indiscernible], which was initially a lot of angry shareholders saying, you a***, we want to take some of this because it's going to be at a big discount. And when they found out that it was a 7% discount with no options to a man, all of those that have called and demanded stock said, well, actually, no, we don't need any. It's a really tight discount. We're not bothered. So that was a large part of the reason why we didn't do an SPP at this time. Yes, I mean, if we do another raise and if we don't sell Ecuador, there's probably one more raise to go before we're fully funded, which, as I said, 18 months or 2 years, then yes, we'd wrap that up with an SPP as part of it.

Perfect. And Kris, with the Casposo mill refurbishment now complete and your contract is mobilizing, what are the key steps between now and first gold pour? I know you've already spoken about this, but to reiterate, and how confident are you in meeting the January 2026 targets?

Yes. So in terms of key steps, look, the last couple of things we've got to do is get a mining contract signed. Now I know that's really close because we found them the accommodation they needed at a camp now. And then getting the ore haulage contract signed, we're on track, and there's about a dozen ore haulage contractors there that really sort of want to take that. We only need to do sort of 3. So in terms of milestones, you'll have that first blast November 15, and we are on track for sort of mining December and then ore haulage, I think is a worst case if we push back another couple of weeks, which we shouldn't. It's still January getting processing done. So yes, quite sort of confident now or relaxed about getting our processing done in January.

Yes. Great. And on that, you've recently signed key contracts with ORICA and THOR. How do these partnerships help derisk early mining operations and ensure a smooth and safe start-up phase?

Yes. So the options we have, where do we do drill and blast ourselves, or do we bring in a contractor. I mean THOR is ORICA's partner of choice. THOR have been in San Juan for 20 years. They're a drill and blast specialist. So for us, it's just we bring in someone that effectively has got 20 years' experience doing drill and blast and ORICA who's an explosive expert. And same thing with the mining contract when that's done. We had the option, which would have been cheaper of doing it ourselves, but it's one of those ones where it costs us an extra couple of dollars a tonne. We're moving 3 million tonnes of ore. If we had bought the gear from Komatsu, we had sort of 3 or 4 trucks. We had a digger loader. We have an accident with one of those pieces of equipment. And yes, we have guaranteed availability from ORICA. But by the time they bring in that gear, it's months could have elapsed, whereas with the contractor we're using, they're one of the largest in Argentina. And if they have a digger breakdown, they got another 6 sitting in their warehouse in San Juan, and they've got experienced operators, whereas -- so we don't have to go and find that. So it's a risk mitigation thing. It's -- and that was the feedback we got from our shareholders. Look, the bigger operation where cost is much more important, yes. But really, this is about the lowest risk startup to make sure that we get those tonnes of ore into the Casposo plant.

Great. And a question on growth and strategy. Once toll milling begins generating cash flow, how do you see that shaping Challenger's next stage of growth? Will it allow the company to accelerate the larger stand-alone Hualilán development or expand resource potential across the project area?

No. So look, there'll be a little bit of money allocated to resource, but that will be a large part of sort of the sterilization drilling. What we're going to do, as I said, is really the next sort of 8 to 9 months is about husbanding the cash, getting rid of that QRC notes and still having $50 million, $60 million cash in bank back end of sort of 2026. And then that still gives us time to then go and accelerate after we've derisked everything and get everything on track. I mean we're not looking for other projects. You're not going to see 200,000 meters of exploration drilling now. That can be done later once we're in. We've got a couple of key targets that we want to look at simply because that's where the waste dumps will sit and we need to sterilize those. And hopefully, we get an outcome where we're actually moving the waste dumps. But the focus is going to be generating cash while still keeping that larger project to the current schedule.

Great. And then a question has just come through. Have there been any discussions with local or international investors before or since the election results?

Look, we've had a bit of feedback from some of the sort of the -- not so much the locals, but the international investors that it's a great result for the country. That was one of their key sort of risk measures that sort of did we want to wait until after the election. And in the end, because we had quality cornerstones, we didn't. But no, look, the feedback is it's a great outcome not just Challenger for Argentina.

And another question. You touched on the heap leaching sometime in the future. Is that only for low-grade ore? And how far out would that be in the long-term schedule? I think your Internet might have cut out, Kris.

[Technical Difficulty] for the larger project, and that is -- it's a fairly big CapEx down if we change networks, I'll do that.

Yes, you've just cut out completely. I'll just give it a moment to see if you come back, give it about 30 seconds. Okay. I'm not sure if Kris' Wi-Fi will resolve itself now. So I might wrap it up here. Should we have missed any more -- any other questions, please feel free to reach out via the contact details on the bottom of our ASX announcement, and we look forward to hosting you all again soon. Thank you very much.