In This Article:
HIGHLIGHTS
-
Austral Gold Limited's subsidiary executes a Toll Processing Agreement with ASX-listed Challenger Gold (ASX: CEL) following the Binding MOU announced on 5 December 2024.
-
Transaction to create a new revenue stream for the Austral Gold Group, including a US$3 million fixed payment (US$2 million payable by 2 January 2025, US$1 million due in two years), a US$110,000 monthly fee, and an incentive fee linked to recovery margins.
-
Operations are anticipated to commence in the second half of 2025.
Sydney, Australia--(Newsfile Corp. - December 30, 2024) - Established gold producer Austral Gold Limited (ASX: AGD) (TSXV: AGLD) (OTCQB: AGLDF) ("Austral" or the "Company") is pleased to announce that pursuant to a Binding Memorandum of Understanding announced 5 December 2024, it's subsidiary, Casposo Argentina Mining Ltd. ("Casposo"), has entered into a Toll Treatment Agreement ("Agreement") with ASX-listed Challenger Gold Limited (ASX: CEL) ("Challenger"). Under this agreement, Casposo will process mineralised material from Challenger's Hualilan project at Casposo's Plant, in San Juan, Argentina.
As part of the Agreement, Casposo committed to use its best commercial efforts, directly or through third parties, to secure the necessary funding for the refurbishment and commercial startup of the Casposo Plant by July 31, 2025. Consequently, as announced on 23 December 2024, a US$7M secured loan was obtained from Banco San Juan S.A., located in Argentina.
Austral's Chief Executive Officer, Stabro Kasaneva said: "We are pleased to execute the Toll Treatment Agreement and with the US$7 million secured loan from Banco San Juan, begin the process of refurbishing the Casposo Plant."
Material terms of the Toll Mining Agreement are as follows:
-
The parties agree to set up a technical and advisory committee made up of up to three professionals from each party.
-
Casposo to use best commercial efforts to finance, directly or through third parties, the funds required for the refurbishment and commercial startup of the Casposo Plant on or before July 31, 2025.
-
Operator: The Casposo Plant will be operated by Casposo's local branch in Argentina, named Casposo Argentina Ltd. Sucursal Argentina.
-
Guaranteed throughput Tonnage: guaranteed toll treatment of 150,000 tons available to Challenger per year, with a guaranteed toll treatment capacity available to Challenger of 450,000 tons over a three (3) year period.
-
Consideration: Challenger has agreed to pay Casposo the following:
-
US$3 million, with US$2 million to be paid by 2 January 2025 and US$1 million to be paid on the second anniversary of the date of the Binding MOU, with interest accruing at a rate of 6% per annum.
-
The US$2 million paid upfront shall be returned to Challenger if the Hualilan ore is not processed in the Casposo Plant, either because: (i) the Technical Committee determines, based on the testing of samples of minerals from the Hualilan Project and the studies relating thereto, that the recovery rate of the Hualilan mineralised material to be processed at the Casposo Plant will be below 70%; or (ii) operations of the Casposo Plant have not been relaunched on or before July 31, 2025, unless the delay is caused by matters related to the mining or extraction of mineralised material from the Hualilan Project to the Casposo Plant or matters otherwise beyond Casposo's control. In such case, the refund shall be net of the costs incurred or financed by Casposo, provided that such costs were included in the budget approved by Challenger, directly or through the Technical Committee.
-
A fixed monthly fee of One Hundred and Ten Thousand United States Dollars (US$110,000), from the start of Tolling Operations at the Casposo Plant and throughout the rest of the term of the Toll Treatment Agreement;
-
An Incentive Fee in accordance with the gold-equivalent ounces recovery rate achieved through the process as a percentage margin over processing costs and any processing cost uplift costs of production ranging from 20% to 30%.
-