Challenger Gold Limited
(formerly Challenger Exploration Limited)
ABN 45 123 591 382
Annual Report
For the year ended 31 December 2023
Challenger Gold Limited
CORPORATE DIRECTORY
DIRECTORS
Sergio Rotondo (Executive Chairman)
Kris Knauer (Managing Director)
Fletcher Quinn (Non-Executive Director)
Pinchas Althaus (Non-Executive Director)
Brett Hackett (Non-Executive Director)
Sonia Delgado (Executive Director)
COMPANY SECRETARY
Scott Funston
REGISTERED OFFICE
Level 1
1205 Hay Street
WEST PERTH WA 6005
Telephone: (08) 6380 9235
AUDITOR
Ernst and Young (EY)
11 Mounts Bay Road
Perth WA 6000
Telephone: + 61 8 9429 2222
LAWYERS
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Telephone: + 61 8 9321 4000
SHARE REGISTRY
Automic Pty Ltd
Level 2
267 St Georges Terrace
PERTH WA 6000
Telephone: 1300 288 664 (within Australia)
Telephone: +61 (0) 2 9698 5414 (International)
SECURITIES EXCHANGE LISTING
Australian Securities Exchange
ASX Code: CEL
WEBSITE
www.challengergold.com
Dear Shareholder,
The past 15 months to the end of March 2024 has seen significant progress made by the Company in what have
been challenging market conditions. As I write the gold price is trading above US$2200 per ounce and I am
looking forward to an exciting next 12 months as we move Hualilan closer to production.
Progress over the past year includes the completion of a positive Scoping Study following the release of an
updated Mineral Resource Estimate (MRE) at Hualilan, Argentina, and a significant first Mineral Resource
Estimate (MRE) in Ecuador.
Challenger continues to make considerable progress on its growth strategy, with the Scoping Study confirming
Hualilan has the potential, when in production, to generate significant cashflow at an all in stustaining cash cost
(ASIC) that would place Hualilan well inside the bottom cost quartile of all gold producers. Additionally, we
increased our global MRE of gold equivilents substantially, with the maiden MRE in Ecuador taking the
Compnay’s total resource base to 7.3 million ounces of gold equivalent resources1.
Our Hualilan gold project has inherent optionality given that the MRE starts at surface and contains a high grade
core of 8.1 Mt at 5.0 g/t Au, 17.4 g/t Ag, 1.8% Zn, within the larger MRE of 60.5 Mt. The successful Scoping Study
focused on the high-grade core of the Hualilan MRE to present a low startup-capital project capable of being
funded by the Company given the difficult market conditions at the time of the Study.
The study presents an initial economic evaluation of the Hualilan project and suggests, in addition to Hualilan
becoming one of the lowest-cost ASX producers, it has a rapid payback period, and average annual production
of 116,000 oz gold (141,000 oz gold equivalent2). The Study ignores residual value of the 1.7Moz AuEq3
remaining after the SS LOM due to the high-grade/ low-tonnage focus and is not considered to reflect the full
value of the asset. With market conditions looking like they have turned the next phases of the study will be
focus on the practicality and economics of a larger open pit operation while continuing to investigate and
optimise a concurrent or sequential UG mining option. We expect this to improve on what is already an
outstanding outcome. Highlights of the Scoping Study are included in the Directors Report.
In June 2023 we announced an initial MRE for the Company's El Guayabo Gold Copper Project, in El Oro Province,
Ecuador. This MRE is based on 34 drill holes, for 22,572 metres at our 100% owned El Guayabo concession. This
initial resource drilling program, and resultant MRE, focused primarily on the GY-A and GY-B anomalies.
Mineralisation remains open in both directions along strike and at depth at both GY-A and GY-B and there is
clear potential for the MRE to grow significantly via additional drilling.
The remainder of 2024 will see Challenger continue to advance Hualilan towards production with a Pre-
Feasibility Study underway, which we expect to flow seamlessly into our first Feasibility Study.
Finally, I take this opportunity to thank all our shareholders, my fellow board members, the management team,
and our dedicated employees for their continued support as we continue towards our goal to become a
significant gold producer.
Yours Sincerely
Sergio Rotondo
Executive Chairman
1 Refer pages 18 and 19 of the Annual Financial Report of this ASX release
2 AuEq information as required under JORC is provided on Page 18 of the Annual Financial Report of this ASX release as footnote to Table 10 (Hualilan MRE)
3 Refer page 9 of the Annual Financial Report of this ASX release and ASX Release 8 November 2023
REP 001_GMSA_SUSTENTABILIDAD_ 2023
S3.2 COMMUNITY TRAINING _TALLER CERAMICS
"OUR HANDS" ........................................................ 28
S4.1 "EDUCATIONAL TERMINALITY" ...................... 30
S4.1 "BACK TO SCHOOL" 2023 ............................... 31
SOCIAL ORGANIZATIONS .......................................... 31
EDUCATIONAL INSTITUTIONS .................................. 32
S4.2 EDUCATIONAL ALLIANCES ............................. 32
FRAMEWORK AGREEMENT UNSJ_GMSA ................. 32
IIM-_GMSA SUPPLEMENTARY AGREEMENT ............ 33
S5. EDUCATIONAL LINKAGE ................................... 33
Inside Ebedon Nº9 ................................................... 33
DOMIGO FAUSTINO SARMIENTO INDUSTRIAL
SCHOOL .................................................................... 34
POSTDOCTORAL FELLOWSHIP .................................. 36
S5.2 VISIT PROGRAM "HUALILÁN NUESTRA CASA" 37
RESPONSIBLE AND POSITIVE FOOTPRINT .................... 38
A2.1 WATER MONITORING PLAN .......................... 38
SURFACE AND GROUNDWATER ANALYSIS ............... 38
NEW HYDROGEOLOGICAL DRILLING ........................ 39
NEW EVAPORATION MEASURING STATION ............. 39
A.3 CARBON FOOTPRINT ....................................... 40
INTRODUCTION ........................................................ 40
SCOPE ....................................................................... 40
OUR RESULTS ........................................................... 40
CONCLUSIONS .......................................................... 40
A5.2-3 FLORA AND FAUNA MONITORING PLAN ... 41
RESPONSIBLE, ROBUST AND TRANSPARENT BUSINESS 41
G.5.1 PACTO GLOBAL RED ARGENTINA ................. 41
RELATIONSHIP BETWEEN SDGS, GLOBAL COMPACT
AND GMSA'S CORPORATE SUSTAINABILITY STRATEGY
................................................................................. 42
THE SDGS AND THEIR RELATIONSHIP WITH OUR
COMPANY ................................................................ 43
Table of Contents
SUSTAINABILITY REPORT ......................................... 1
SUSTAINABILITY STRATEGY & DIMENSIONS ............ 3
STRATEGIC PRIORITIES ............................................. 3
Environmental Pillar Commitment ............................ 3
Commitment to the Communities Pillar .................... 3
Pillar People Commitment ......................................... 3
Commitment Pillar Governance................................. 3
Commitment to the Transversal Pillar of Efficiency
and Continuous Improvement ................................... 3
SUSTAINABILITY STRATEGY ..................................... 4
DETAILS OF ACTIVITIES 2023 ................................... 4
THRIVING AND CLOSE COMMUNITIES ........................... 4
S1.5.1 COMMUNITY ENGAGEMENT PROGRAM ...... 4
EDUCATION &GRUPALES_ INCLUSION MEETINGS .... 4
ULLUM MULTIPLE SPECIAL EDUCATION
1.
SCHOOL 4
2.
EPET SCHOOL Nº 9 "RENE FAVALORO" . 6
MEETINGS GRUPALES_ SENIORS ............................... 7
Villa Ibañez Retirement Center ........................... 7
GENDER GRUPALES_ MEETINGS ................................ 8
Women's Group Bº.25 de Mayo ......................... 8
GROUP MEETINGS _ SOCIAL ORGANIZATIONS .......... 9
1. CALAS FOUNDATION ....................................... 9
2. Vº AURORA NEIGHBORHOOD UNION ........... 10
GROUP MEETINGS _ SPORTS ORGANIZATIONS ....... 11
1.CLUB JUVENTUD ULLUNERA .......................... 11
2.CLUB SAN LORENZO ....................................... 12
GROUP MEETINGS _ GMSA COLLABORATORS ......... 14
MEETINGS INDIVIDUALES_ SOCIAL ORGANIZATIONS
................................................................................. 14
PICNIC AREA "BICHITO DE LUZ" VILLA DEL LAGO
ULLUM .............................................................. 14
MEETINGS INDIVIDUALES_ RELIGIOUS
ORGANIZATIONS ...................................................... 15
HEALTH INDIVIDUALES_ MEETINGS ......................... 17
PRIMARY HEALTH CARE CENTER ....................... 17
COMMUNITY INDIVIDUALES_ PROVIDER
DEVELOPMENT MEETINGS ...................................... 18
GENDER INDIVIDUALES_MEETINGS ......................... 19
REFERENT _ MRS. SARAH FLORES ..................... 19
MEETINGS INDIVIDUALES_ ENTREPRENEURS .......... 20
REFERENT _ MRS. OLGA RODRÍGUEZ................ 20
S1.5.4 CHILDREN'S DAY ......................................... 21
S2 SAN JUAN THE CUIDA ....................................... 22
DEPARTAMENTOS ............................................. 22
SERVICES PROVIDED ......................................... 22
S2 SUICIDE PREVENTION WORKSHOP ................... 25
S3.2 COMMUNITY TRAINING _TALLER "ADDING
VALUE" JEWELRY ................................................... 26
2
SUSTAINABILITY REPORT
REP 001_GMSA_SUSTENTABILIDAD_ 2023
ENVIRONMENTAL PILLAR COMMITMENT
available
Develop mining operations using
environmental
resources eco-efficiently, with
leadership in water, energy, waste and ecosystem
restructuring management. Our environmental
footprint is responsible: we care for, respect and
contribute positively to our environment.
COMMITMENT TO THE COMMUNITIES PILLAR
To be considered as part of the community in which
we operate through continuous dialogue, respect
and harmony with its history. Contribute as strategic
partners of the communities and boost the local
economy by promoting entrepreneurship.
PILLAR PEOPLE COMMITMENT
To provide a space of care, well-being and safety to
our workers, we are their second home. We develop
talent based on equal
and promote
opportunities.
local
COMMITMENT PILLAR GOVERNANCE
Have day-to-day structures based on excellence,
integrity, transparency and communication, always
considering that values are above regulatory
compliance at all levels of the company and third
parties.
COMMITMENT TO THE TRANSVERSAL PILLAR OF
EFFICIENCY AND CONTINUOUS IMPROVEMENT
Develop mining operations and processes from an
organizational culture of positive impact, continuous
improvement,
collaborative
innovation.
efficiency
and
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REP 001_GMSA_SUSTENTABILIDAD_ 2023
THRIVING AND CLOSE COMMUNITIES
Engagement with the community is a daily and long-
term job. The relationship of trust and working
together is far from being a one-off task. That is why
GMSA has regularly held, since 2019, a series of
formal and informal meetings with all the actors in
the community. This makes it possible to establish
lasting and frank bonds. GMSA's RRCC team
diagrams and executes these weekly and monthly
meetings and talks with various community actors,
with the aim of knowing and listening to the
expectations and needs of the people/institutions
we work with on a daily basis. This, in addition to
laying the foundations for a social license for the
operation of the project, allows us to belong to the
community as one more neighbor day by day.
EDUCATION & GROUP INCLUSION MEETINGS
1. ULLUM MULTIPLE SPECIAL EDUCATION SCHOOL
Reason for Intervention
a
group
Conduct
educational
community
Special Education School".
interview
"Ullum
the
in
Multiple
4
Approach Performed
first, an
introduction and
At
first telephone
communication was made with the director of the
educational establishment, managing to coordinate
a visit to the school due to the predisposition and
openness on her part, who also
invited the
Community Relations Assistant of the company
the
Golden Mining S.A.
Independence Day event.
to participate
in
REP 001_GMSA_SUSTENTABILIDAD_ 2023
On the date in question, the student went to the
educational institution and was received by Mrs.
Ester Quiroga (director) and then by the teacher in
charge of the carpentry workshop, Mrs. Verónica
Sánchez.
Brief description of the property
-The enrollment is 65 students, ranging from 2
months to 65 years old.
-They have cooking, carpentry and agricultural
workshops. They sell what they produce, using the
proceeds to replace materials and distribute profits
among the students.
They mention that the resources for the workshops
are scarce, being the teachers and staff of the school
themselves who are in charge of managing the
obtaining of them, they also refer that on several
occasions they are the ones who buy the materials
for workshops and activities that are carried out in
the institution "for example today we made a vaquita
among all to make a locro and in this way have a call
of the families in the act".
Departmental/Institutional Reality
In relation to the departmental/institutional reality,
they mention that the problems they observe the
most are related to domestic and gender violence,
problematic consumption (alcohol) in young people
and link this problem to the lack of motivation and
recreational/sports activities.
They report that the group or sector of the
population of Ullum that is most affected are the
young female students of the school, where they
mention that the highest percentage of those
enrolled are boys, while adolescent women are in
charge of the care of nieces and nephews/brothers,
relating this problem of school dropout directly to a
"macho" culture and they also add, that parents of
students with disabilities minimize the education
their children receive because it is a special
education school, and that the continuity of the
adolescent girls' education is not important to them,
or that they prioritize housework over education.
5
REP 001_GMSA_SUSTENTABILIDAD_ 2023
In relation to the interviewees, it can be mentioned
that they do not reside in the department, but have
been working there for several years.
Regarding the departmental reality, they report that
the main problems are
scarce
to
opportunities, instability and job insecurity.
linked
Although the departmental employment situation is
associated with various other problems that derive
largely from the socio-economic instability that is
generated in families due to the lack of employment,
the main problem observed in school students is the
abandonment of children and adolescents who are
raised by their extended family.
Carolina: "There are many children raised by
grandmothers and uncles because their parents left
and never returned... It is very difficult from school to
tell them that they matter, that they are worthy, if the
people who should take care of them the most decided
to abandon them, the message they are left with is that
they are useless, that they are not important."
Carolina mentions having worked
in other
departments of the province and emphasizes that
she has not seen what happens in Ulum: "Here it is
normal for parents to leave the department or form
new couples and not see their children again."
According to Carolina and Laura's story, there is a
high burden of household responsibilities that fall on
school students (work, care of the elderly, children
in the family group, among others), which threatens
and hinders access to rights for adolescents who
attend school, causing
in some cases school
dropouts. Lack of time for study, recreation, leisure.
This is followed by a tour of the institution, showing
the physical space where the workshops (electricity,
carpentry, etc.), classrooms, laboratory and other
facilities operate.
In the laboratory, the professor, Graciela Torres,
who is in charge of the dictation of the subject
Chemistry of Materials together with Carolina
Laciar, joins the laboratory.
Articulation with institutions and organizations
for
the
with
articulation
As
other
institutions/organizations of the department, they
mention that it is scarce or informal because on
several occasions they resort to or contact those who
offer faster answers than the formal route. Some
examples they gave were:
- "We coordinate with the CIC, but directly with the
doctor or nurse, in particular cases."
-In relation to the municipality, they mention that
they generally articulate for mobility when they have
activities outside
the establishment, being a
limitation the same because the mobilities that the
municipality has are used for various things, not only
for disability.
To consider
Provide wooden pallets for the carpentry workshop
and organic waste for the agricultural workshop,
providing inputs to the institution and contributing
to the recycling of the Hualilán project.
2. EPET SCHOOL Nº 9 "RENE FAVALORO"
The school is located next to Eva Duarte de Perón
Square, on Santiago del Estero Street, in the
department of Ullum.
The meeting takes place between the Community
Relations Assistant of GMSA, the vice-principal of the
educational establishment, Mrs. Carolina Laciar and
the teacher of the 7th grade practices, Mrs. Laura
Arce, followed by the teacher of the subject
Chemistry of Minerals (5th year), Mrs. Graciela
Torres.
Some of the purposes of the meeting are: to generate
close ties, to know the vision of directors and
the departmental/institutional
teachers about
reality, to continue with the organization of the
programs "Hualilán our house" (visit to the project
of students who are in the last year of secondary
level) and the program "Educational Linkage"
(internships in the project 4 students of the 7th year
of the EPET No. 9 school).
6
REP 001_GMSA_SUSTENTABILIDAD_ 2023
Services it provides to the community
The Retirement Center has been operating in the
home for about 10 years.
Regarding the services it provides to the community,
it says that currently only a clinical doctor who
attends 3 days a week from 8:00 a.m. to 11:00 a.m.
and a secretary in charge of providing appointments,
making prescriptions and serving the public are
currently serving the elderly population.
Whose income would be used to pay for electricity
and internet services, among others.
Reality of the institution/organization
Weaknesses/Obstacles
One of the difficulties they mention is that part of the
elderly population of the department finds it difficult
to reach the Retirement Center because they do not
have a family network to accompany them and
because of limitations in the mobility of their bodies
typical of age, thus hindering access to health.
There is a difficulty in terms of the physical space
they have, hindering the possibility of carrying out
recreational activities or large gatherings.
To consider
Graciela mentions the possibility that Golden Mining
contemplates giving a "talk" (by geologist) on the
operation of the Hualilán project to 5th year
students, which will allow them to relate the
contents of the course with practice from the
experience in the work of GMSA collaborators.
Regarding the vision regarding the Hualilán project,
they are optimistic that it will be located in the
department of Ullum, and highlight the importance
of the work carried out by the company in the
community, adding the "great need" to generate new
sources of work for the departmental population.
MEETINGS GRUPALES_ SENIORS
VILLA IBAÑEZ RETIREMENT CENTER
The Retirees Center of the department of Ullum is
located in Villa Ibáñez, E. Vidart Street.
In terms of connectivity, it can be seen that the bus
line 161 passes through the door of the place.
7
REP 001_GMSA_SUSTENTABILIDAD_ 2023
It is relevant to mention that the land where the
Retirement Center is located does not have much
space for expansion, although there is a room
recently built, it would not be suitable for gathering
a large group.
According to Raul, there would be a change in the
Board of Directors of the Retirees Center, not
achieving organization for the time being: "An
Assembly was held and the people were not satisfied
with what is being done in the Retirees Center and it is
for that reason that I (Raul Montaña) would be
provisionally as President, but legally not yet because
the people who were in charge need to present
documentation, accountability and we are not getting
them to do it... At the moment there's not much we can
do to resolve that."
Social Role and Position of the Elderly
According to the interviewee's perspective, the
elderly are displaced both by their families and by
society in general.
children/grandchildren no
"The
longer give
importance to their grandparents, in fact I see many
who are living in a little room in the background
because their house is occupied by the grandchildren
with their families and what happens with this is that
they no longer visit or interact with their lifelong
friends because they have nowhere or feel that they
bother each other."
He says that in the Municipal building of the
department there is a sector for the Elderly where
they do physical activity but that the attendance is
scarce "here the political issue weighs a lot, I think
that is why many adults do not attend the classes,
because of what they take place in the municipality...
that's why I think the adults in the department need a
space in the Senior Center."
Labour market
As for job opportunities in the department, he says
that they are becoming "fewer", he relates the lack of
employment with the decrease in viticulture in the
department, mentioning that people who owned
farms were dying and finding heirs in charge and
that they desist from exploiting the land because of
"the amount of taxes to be paid" and that those who
decide to do so find it difficult to obtain responsible
labor, indicating that young people have lost the
culture of work.
Expectations for the future
He mentions that there are "many" people who live
in Ullum but who work outside the department in
search of other job opportunities.
Next, Raúl alludes to having visited the Hualilán
project and is hopeful that as the project progresses,
more labor will be required and that it will be made
up of people from the Ullum department.
"The (Hualilán) Project is a great opportunity for
young people
job
opportunities like I had when I worked on the
construction of the Ullum dam."
in the department to have
GENDER GRUPALES_ MEETINGS
WOMEN'S GROUP Bº.25 DE MAYO
It is coordinated by the Community Relations team
of GMSA, a meeting with a group of women in the 25
de Mayo neighborhood of the Ullum department.
This visit to the place is agreed with Mrs. Sarah
Flores (neighborhood leader) who convenes in her
home the group of women with whom they carry out
various activities in pursuit of community welfare.
The purpose of the meeting is to forge and maintain
links, to know and consider the various issues that
arise according to the changing reality and to
promote gender equality through the participation,
8
REP 001_GMSA_SUSTENTABILIDAD_ 2023
teamwork and active listening of the group of
women.
recognized, and to achieve their own growth and
development.
Beginnings of social organization
The owners of the house state that they have lived in
the neighborhood for approximately 7 years, in
which they describe having started with the social
from the visualization of socio-
commitment
economic needs in their neighbors, which drives
them to open the first picnic area.
They say that at first they did not get involved in
political matters, but only intended to generate some
transformation in the neighborhood to which they
belong.
They mention that, at present, they are part of the
Libres del Sur Movement and that based on the
teamwork they were building, they were offered to
join it, seeing in this the possibility of receiving
resources that were allowed to open new picnic
areas and carry out various activities in which they
participate jointly.
They then explain that at present none of the picnic
areas are operating, they refer that for some time
they have not received food on a monthly basis and
that when they have some resources they are scarce
to start up the picnic areas and that for this reason
they use the provisions to carry out specific
activities.
Neighborhood/departmental reality
Women from different areas of the department were
present at the working table with the intention of
covering and considering the departmental reality.
It is relevant to mention that, although they report
feeling comfortable in the work group that they were
building, their membership is largely due to the
economic situation that families in the department
are going through due to the lack of formal
employment.
The main problem that arises from this meeting is
related to job insecurity and lack of employment.
Several of the women present say that belonging to
the group gave them access to the Empower Work
Program, but that at the same time they carry out
temporary jobs that arise to "make ends meet." They
mention that receiving this benefit is not their final
goal, but that they are always looking for a formal job
that allows family stability and that the income they
receive passes on to other people who are in need
and can have the opportunity they had.
As for the
job opportunities offered by the
department, they say that they are sporadic and that
they depend on the political positioning of the
applicants to get or keep jobs.
In relation to the Hualilán project, some of the
participants report knowing about it and others
express the desire to do so.
GROUP MEETINGS _ SOCIAL ORGANIZATIONS
1. CALAS FOUNDATION
It is coordinated by the Community Relations team
of GMSA, meeting with Mrs. Daniela Salinas
(councilor) and the group of women who work with
her in the picnic areas of the "Calas Foundation".
The meeting takes place at Daniela's home, Bº Ullum
front of the
II, whose home
department's CIC.
located
in
is
History
Some of the needs felt by the group and raised at the
meeting were job stability and security, to be
Daniela says that she started with the picnic areas
approximately 7 years ago, she says that they have a
9
REP 001_GMSA_SUSTENTABILIDAD_ 2023
Board of Directors that allows them to receive
merchandise every 45 days from the Ministry of
Human Development and that she is in charge of
distributing them in the 3 picnic areas.
Workshop that Daniela organized with people from
the department of Rivadavia last year and that on
occasions they carry out "Competition Battles" in the
which is added with some kind of incentive prize.
The first of the picnic areas began to operate in "El
Chilote" and after the relocation it was moved to the
Grimal neighborhood in the home of Mrs. Adriana
Palacio, on Tuesdays and Fridays and is attended by
about 40 boys and girls.
The second picnic area is located in the Barrio 25 de
Mayo and has been operating for 6 years, currently
in the home of Mrs. Celia Gonzales, on Tuesdays, who
mentions having the help of her mother and sister to
be able to contain about 100 children and
adolescents.
The third and newest one operates in the Municipal
Lot, in the home of Mrs. Soledad Balmaceda, on
Wednesdays, attended by about 20 boys and girls.
Both Celia and Soledad mention that the operation of
their picnic areas is different from the operation of
the rest of the picnic areas that exist in the
department, considering the delivery of snacks to
share in each of the homes as a family favorable.
Celia adds that in addition to considering it
important for each child to be able to have a snack at
home, otherwise it would not be possible for the
picnic area to operate due to the high attendance
(100 children and adolescents) in the Barrio 25 de
Mayo.
Neighborhood/departmental reality
During the meeting, they mentioned the following
problems:
➢
lack of work, mainly for women.
➢ Increase in bullying in high schools.
➢ Lack of
recreational/sports
activities,
particularly for girls.
Regarding the last point mentioned, Daniela says
that there is a group of teenagers who grouped
independently due to the lack of proposals and
recreational activities for the young people of the
department who are called "La Banda de la Plaza del
CIC", they would have participated in a Rhyming
10
As a vision for the future, they mention that what the
department needs is in the hands of young people
"we have to aim for them to study, study is what is
going to move Ullum forward".
At the end of the meeting, they are optimistic about
the work that Golden Mining has been doing
together with the community.
2. Vº AURORA NEIGHBORHOOD UNION
It is coordinated by the Community Relations team
of GMSA, meeting with the Board of Directors of the
Neighborhood Union, one of the reasons for the
meeting is to expand relations with the community
of Ullúm.
The meeting is held with the President Mrs. Silvia
Asís, the Vice President Mr. José Aguilera, the
Treasurer Mrs. Marta Rodríguez and the Secretary
Mrs. Olga Rodríguez.
The Neighborhood Union of Vº Aurora, according to
the interviewees, would be one of the few that
remained organized over time, beginning to function
in 1973.
Institutional Reality
They report that since the pandemic, the activities
carried out in the Neighborhood Union are few, not
being able to resume the rhythm and participation of
the neighbors in the activities.
Currently, aerobic classes only operate permanently
on Mondays, Wednesdays and Fridays, with the aim
of holding a craft fair that operates on Sundays and
allows fundraising.
In relation to this, they add that there was a
significant reduction in the number of affiliates,
leaving 40 who pay $100 per month, having to
assume electricity and other expenses among the
members of the commission.
Silvia also indicates that the Board of Directors must
change "we have been here for a long time and it is
REP 001_GMSA_SUSTENTABILIDAD_ 2023
already difficult for us because we are old, we
understand that it must be renewed, but we cannot
find someone who understands and manages to
assume responsibly... Some express intention, but
when you want to move forward to explain how it
works, they stop coming, they don't commit."
Departmental Reality
They indicate that health is one of the main
departmental problems, referring to the fact that it is
a right that is not guaranteed.
"The best place for health care in the department of
Ullúm is the CAPS Alejandro Royon" which, although
it does not have many medical specialties, would be
the place most chosen by the community to be
attended to due to the "quality and commitment" of
the professionals.
During the month of September, "El Royon" suffered
the tenth act of vandalism and robbery, commenting
that the entire community is mobilizing to find a
solution so that the Center continues to function and
provide health services to the community.
They mention that the CAPS was created on the
initiative of a group of students and teachers from
the Central University School, who developed a
project together with the Neighborhood Union,
achieving the construction of the Center, which
began to operate in 2003. It bears the name
"Alejandro Royon" in commemoration of one of the
students involved in this project who died prior to
the construction of the place.
-Silvia: "Not all the community knows the history of
the Royon, but it was a group of students and teachers
who managed to open
it together with the
Neighborhood Union, they gave us a resolution that
the land belonged to the Neighborhood Union and
they told us to take care of it and defend that it was
ours... with the 10 robberies that took place this year
in the health center, there are people who want it to
belong to Public Health as if that were a guarantee
that they are not going to close it."
Other departmental issues that arise during the
dialogue are:
-Lack of employment.
-Lack of enrolment in trades.
They say that in the department there are people
with various trades and that they develop it to
"perfection" but that it is difficult for them to get a
job because they do not have a way to accredit their
knowledge.
In relation to GMSA and the project, they are asked
how much they think the community knows,
answering "Not much, here there are many people
who do not know that the project is within our
department, the only thing they know is that there are
some who go up to work, but they do not know where,
it does not matter to them what company it is".
As for the expectations with the project, they
mention that they hope it will generate sources of
work for the people of the department.
GROUP MEETINGS _ SPORTS ORGANIZATIONS
1.CLUB JUVENTUD ULLUNERA
The club is located in the Luz y Agua neighborhood
in the Ullum
on Malvinas Argentinas Street
department.
History of the Club
The C.A.J.U. was founded on October 12, 1915, but
has been in its current location since 1960.
They define the site as a meeting point for the
community and as part of the culture of the sport of
Ullunero.
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REP 001_GMSA_SUSTENTABILIDAD_ 2023
They mention that the place is also known as "The
family club" due to the sense of belonging that they
developed over the years and that is what drives
them all to collaborate to maintain the club.
Weaknesses/Obstacles
➢ Lack of water for irrigating the court.
➢ Lack of lighting that makes it impossible to
extend the useful hours of the scale.
➢ Insufficient financial resources.
➢ A part of the land is missing a perimeter
fence.
➢ Deterioration of the sports center track that
fundraising
prevents other sports and
activities from taking place.
Strengths
➢ Collaboration and active participation of
women's groups, the Board of Directors, and
the community in general.
➢ Physical space.
➢ Commitment of the families of young people
who train at the club.
In addition to playing soccer, they say that the sports
center is sometimes used as a loan to dance
academies, for family events, among others.
The meeting was held at the request of the Club's
Board of Directors, who were satisfied with the
presence of the Community Relations team at the
site.
2.CLUB SAN LORENZO
The club is located on J. Aguilera Street and
Hermógenes Ruiz Street within Vº Aurora in the
Ullum department.
As for the history, they say that approximately in
1977 it was already located in the current place.
Currently there is a normalizing Triumvirate, which
has not been able to form a Board of Directors, and
is in the process of being reorganized.
In the group meeting, it was possible to dialogue not
only with the Club's Board of Directors (president
and member) but also with members of the
community who
by
collaborating in activities to raise money that will
allow them to continue participating in the San Juan
Soccer League.
participate
actively
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REP 001_GMSA_SUSTENTABILIDAD_ 2023
They mention that, although the Commission is not
formed, there is a group of 20 people who
collaborate in the different activities, taking care of
giving
and
maintaining the place.
classes, making
arrangements
Young people from the age of 11 attend, they say that
they do not have a school for "the little ones" because
there are not many hours that they can use the cacha.
At the meeting, training of the 4th Division and the
1st Division could be observed.
➢ Part of the perimeter fence of the land is
missing.
➢ We need to raise the net on the perimeter of
the court.
As for the bathrooms, they have the space, but they
are not enabled because there is no connection.
You can see the 5-a-side football pitch under
construction and the dressing rooms made by the
members of the club.
In the meeting, some difficulties that arise in the club
are mentioned, such as:
➢ Lack of water for irrigation.
➢ Lack of funds to finish 1 grandstand, 5-a-side
football field, canteen.
➢ They don't have bathrooms.
➢ Lack of lighting.
They report that many young people joined the club
from 2022 onwards who participated in a National
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REP 001_GMSA_SUSTENTABILIDAD_ 2023
tournament in which they traveled to the province of
San Luis to compete, adding Mr. Hugo "It is the only
club in Ullum that is in the A, and that managed to
travel to another province with a lot of sacrifice... For
the youngest, the 1st grade players are their idols and
that makes many want to play sports, it's the way to
add kids and get them off the street."
They highlight some of the problems that the young
people of the department are going through (school
dropouts, problematic consumption) finding a place
of contention in sports, in classmates and coaches.
Regarding the departmental reality, they comment
that job opportunities in the community are "few"
and that jobs in most families are not stable, which
influences young people and hinders access to rights
such as education, recreation/sports, among others.
They add that they are optimistic about the
incorporation of local labor in the Hualilán project,
and some of those present say they know the place.
GROUP MEETINGS _ GMSA COLLABORATORS
It is coordinated by the GMSA Community Relations
team, meeting with staff (geology assistants and
cutters). It is carried out in the Hualilán project,
mostly with workers residing
the Ullum
department.
in
The purpose of the meeting is to strengthen ties,
open new channels of communication aiming at
greater closeness between the Community Relations
team and the staff.
14
On the other hand, and in accordance with the
Sustainable Development Goals for 2030, SDG 4 and
SDG 5, is to promote educational completion in order
to provide tools and strengthen the personal growth
of each worker in the company.
From this meeting, positive results are obtained,
doubts and inconveniences are raised, they refer to
the "Educational Terminality" program that began to
be implemented in 2022 and that is currently being
monitored in order to accompany the company's
staff, sharing progress, difficulties and new
inclusions to the Fines Plan.
A follow-up survey is carried out, which not only
makes it possible to access information regarding
the level of education attained by each worker, but
also incorporates personnel who previously, due to
various circumstances, had not raised the need to
continue education and who now express a desire to
do so.
MEETINGS
ORGANIZATIONS
INDIVIDUALES_
SOCIAL
PICNIC AREA "BICHITO DE LUZ" VILLA DEL LAGO
ULLUM
Geographic Location
An interview was conducted with Mrs. Alejandra
Bustos, who lives in Villa del Lago on the corner of
Vidart and Los Tilos streets in the department of
Ullum.
On Wednesdays and Fridays, there is a picnic area
called "Bichito de Luz" in the home, and on the land
opposite the house there is a soccer field where the
same children and adolescents who attend the picnic
area play sports.
Alejandra mentions that the picnic area has been
operating on her initiative since 2019, referring that
in
its beginnings the group of women who
collaborated with the activities is no longer the same
"they worked with older women than when they began
to receive retirement, due to age and other reasons the
group was modified... They're younger now."
She adds that she is part of the Barrios de Pie
movement and that because of that she managed to
REP 001_GMSA_SUSTENTABILIDAD_ 2023
in the
get the people who accompany her
neighborhood activities to receive income from the
Potentiate Work Program.
Tasks and Roles
Regarding the tasks and roles, the interviewee
indicates that there are 5 women who are in charge
of the picnic area while 2 men train "the boys"
working from 5:00 p.m. to 7:00 p.m. in which they
share 1 hour of snack and 1 hour of mixed soccer.
Recreational and sports outings
Alejandra says she is registered with the Secretary of
Sports as a Neighborhood Leader, which made it
possible for her to "take the kids out" and play in
other clubs "We do soccer matches at the Farm in
Santa Lucia and on Wednesday we go to a climbing
match at the Mercedario Club, I get the mobility
everything..."
The interviewee indicates that school support arises
from the difficulty of some parents to accompany
their children in learning due to their scarce cultural
capital and lack of motivation : "I tell them to come
and do their homework and then they stay for soccer,
so that's how they do it."
Articulation with institutions/organizations
Alejandra has an active role within the community
and the ability to manage resources of different
kinds.
It refers to articulating directly with the person in
charge of mobility of the municipality of the
department and also with the CIC to obtain
certificates of good health so that children and
adolescents can attend soccer matches.
"I get the shifts at the CIC and the mothers take them
and it helps to know how the children are doing."
Obtaining resources for the picnic area
In relation to obtaining food for the operation of the
picnic area, Alejandra points out that it depends on
her constant search because she does not receive
provisions on a fixed or monthly basis, but rather
mobilizes to obtain them, as well as make sales of her
enterprise to cover the expenses of the picnic area
and sports activities.
"Now it occurred to me to organize the sale of hot
dogs, choris at the game on Sunday so that when we
go out to the next soccer match with the kids we can
bring them alfajores or sandwiches... Luckily the
moms join in and help me."
Departmental reality
In relation to the departmental reality, she mentions
that the most affected group of the population of
Ullum are women, because the problem she
observes the most is related to gender violence.
As for the sector with the greatest opportunities, it
indicates that it would be the people who are in
compliance with the current policy, having greater
job opportunities.
that, despite
then externalizes
Alejandra
the
previous statements, she visualized positive changes
in the department in recent years in terms of the
supply of electricity and water services in several
areas of the department of Ullum.
Labour market
to
the
interviewee's view of
According
job
opportunities in the department, she says that they
are scarce and that the jobs to which the common
people have access are in the harvest, being
temporary and informal jobs that do not allow
economic stability in family groups. He also points
out that young people have become accustomed to
this type of work and that when they get "jobs with
greater demands" they are unable to sustain
themselves over time due to the lack of habit of
complying with formalities (days, schedules, etc.).
He is optimistic about the Hualilán project and the
hiring of local labor.
MEETINGS
ORGANIZATIONS
INDIVIDUALES_
RELIGIOUS
It is coordinated by the Community Relations team
of GMSA, meeting with Pastor Pablo Miguel, whose
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REP 001_GMSA_SUSTENTABILIDAD_ 2023
meeting takes place at the address B° Dique I, Sta.
Cruz Street, house 118, M/G of the department of
Ullum.
week of school recess they carried out recreational
activities (from 3:00 p.m. to 6:00 p.m.) with children
and adolescents where snacks were included.
The planning and execution of the recreational
activities were carried out by a group of 6 sisters of
the Church and by the "faithful" who collaborate.
The objective of the meeting is to know the
perspective of the different social actors of the
department, on this occasion covering the religious
dimension.
This is the first contact from the Community
Relations team with Mr. Pablo, who says he has lived
in the department for 11 years and has come to the
province of San Juan to preach the word and through
the Evangelical Church.
The place that can be seen in the photos would be the
new temple and physical space in which they are
already carrying out some recreational activities and
meetings with groups, but the worship/masses are
carried out in another physical space within the
same neighborhood until the house and the
multipurpose room that is under construction are
conditioned.
Activities/organization
He mentions that they currently meet on Sundays at
10:00 a.m. in the temple and that during the first
16
In relation to the link with the community, he
mentions that it is close, considering that the people
who attend are looking for a place where they can
feel contained and listened to.
Paul mentions that the believing population that
attends the various meetings, talks, and activities is
the
changing and
community.
from different sectors of
She says that there is currently a group of women
who meet once a week for the purpose of
containment, support, and listening. While there is a
group of men who meet once a month and the
opening of this space is done in order to motivate the
attendance of men to the religious community,
considering that the participation that predominates
the most is that of women.
REP 001_GMSA_SUSTENTABILIDAD_ 2023
Obtaining Resources
HEALTH INDIVIDUALES_ MEETINGS
According to the interviewee, the resources for the
realization of the different activities, meetings, the
construction of the multipurpose room as well as the
assistance they provide in some particular cases
comes from the offerings of the faithful, from the
support of the "mother" Church located in the
province of Buenos Aires and in a minority of the
municipality. departmental businesses and the
community at large.
Departmental reality
According to the interviewee's vision, the most
prevalent problems in the department are:
➢ Domestic and gender-based violence.
➢ Lack of secondary schools with other
orientations.
➢ Lack of job training schools.
He mentions that the community has a vision that
the area in which they live is "very far away" from
the capital and that it would be one of the
conditioning reasons for the continuity of studies,
training, among others.
"To the young man you ask him what he is going to do
when he finishes high school, he surely tells you Police,
it is the only way out they see because it is close... And
women are just as good as police officers or nurses, no
one wants to do anything else because they don't
know."
He says that since his arrival in the department he
has noticed some changes in the way people think:
"Little by little they are leaving the department,
believe it or not, most young people do not know how
to manage themselves in the center."
Regarding the departmental labor offer, he mentions
that most families work as temporary workers on
vineyards or olive farms.
In relation to GMSA and the Hualilán project, he
refers to not knowing, showing interest to the
Community Relations Assistant to discuss the
matter.
PRIMARY HEALTH CARE CENTER
The Primary Health Care Center is located in the
head town of the Ullum department "Villa Ibañez" on
Agustín Ruiz Street (Route 60) and E. Vidart Street,
located adjacent to Police Station No. 15 and close to
the Municipality.
The meeting takes place between the Community
Relations Assistant of GMSA and Ms. Marcia Lara
(psychologist of CAPS for 4 years) in order to
dialogue about different aspects that involve the
community.
As for the areas of the department that attend for
care, he says that priority is given to the people of
Villa Ibáñez, Dique I and II neighborhoods and a
sector of the Grimalt neighborhood, organized
between the 2 CAPS and the CIC by zones. He adds
that there is no psychologist at CAPS Royon and that
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REP 001_GMSA_SUSTENTABILIDAD_ 2023
people who require psychological care are received
by the CIC and the CAPS (Villa Ibáñez) according to
the convenience of the person.
In relation to the health service they provide to the
community and specialties, he says that they have:
Radiology, Nutrition, Social Work, Cardiology,
Ultrasound, Laboratory, Psychology, Obstetrics,
Clinician, Pharmacy, Nursing, Health Worker.
In relation to the problems with which he has greater
contact, he refers to visualizing an increase in
adolescents who require attention for being victims
of sexual abuse, negative thoughts and self-harm,
relating as "post-pandemic effects" of COVID-19, an
increase in adults who come for anxiety crises and
panic attacks.
As for the sector of the population with the greatest
opportunities, according to his perspective, it would
be the population close to the CAPS, considering the
housing
and
access
emphasizing that the children and adolescents it
serves would be in school in their entirety.
situation,
services
to
With respect to the sector of the population with
fewer opportunities, he points to B° 25 de Mayo, Villa
del Lago, among others, where he mentions that the
problems begin in the housing situation, lack of
employment, needs and shortcomings that families
go through and result in the violation of other rights
such as access to education, health, recreation.
As the main problem of the department, he mentions
job
lack of formal work and the scarce
the
opportunities offered by the department, which are
reduced to work in the harvest, stating that the
incorporation of local labor into the Hualilán project
is beneficial for the community.
As for the problems or difficulties that arise in the
Health Center, he only mentions the physical space,
referring to the need for expansion that allows for
other offices.
18
COMMUNITY
DEVELOPMENT MEETINGS
INDIVIDUALES_
PROVIDER
The Community Relations team coordinates a
meeting with Mr. Cesar Calvo in order to expand ties
with the community and discover possible local
suppliers.
life
During the meeting, César states that he has lived all
his
in the department of Ullum despite
mentioning that the department does not offer good
educational and job opportunities.
He is currently working in the hardware industry
(construction materials, electrical) he says that on
some occasion he had a "store" in the department
that he decided to close because it was not profitable
only with sales within Ullum and that at this time his
mother owns a hardware store located in the
department of Capital. while he is in charge of
supplying the hardware stores of Ullum and private
sales.
He mentions as problems of the department the
dependence and
instability generated by the
political sector in relation to families and jobs, the
loss of the culture of work in the population and the
lack of employment opportunities offered by the
department.
When he refers to the loss of the work culture, he
relates it to other problems such as lack of
motivation or self-improvement and an excess of
young people with free time that he infers leads in
some cases to the problematic consumption of
alcohol "there are many people who know trades and
are good at what they do, but they get used to living
with social plans, They have a lot of free time and
when they get a secure job, they miss Mondays."
When he mentions the dependency generated by the
political sector, he
it directly with the
links
sectorization that exists in the community according
to the political positioning : "In Ullum you are either
on one side or the other, then the management
changes and those who had jobs lose it because they
already know who you follow, that is what the
politicians in the department generate"
REP 001_GMSA_SUSTENTABILIDAD_ 2023
As for GMSA, he says that there are currently several
sectors of the community that do not know or have
not yet heard of the company, while adding that he is
aware that other sectors do " I heard a political
leader from Golden... I think they still need to reach
other sectors."
Later, he mentions meeting the men and women who
came to work on the project, highlighting it as a
positive change at the individual and family level due
to the possibility of formal employment.
Cesar also expresses as future expectations the
desire for Golden Mining to incorporate more local
labor.
At the end, he highlights positive aspects such as the
"people, the place" that lead him to continue
choosing the apartment as his place of residence.
GENDER INDIVIDUALES_MEETINGS
REFERENT _ MRS. SARAH FLORES
An interview was conducted with Mrs. Sarah Flores
at her home on Bº 25 de Mayo in the department of
Ullum.
Reason for boarding
Although the Community Relations team maintains
continuous contact with Sarah, with her partner, Mr.
Alejandro Chirino and with the group of women with
whom they work, on this occasion the reason is to
intimate and relaxed
carry out an
interview in order to learn about problems, a way of
solving problems at the neighborhood level, among
others, which may not arise in group meetings.
informal,
Another purpose of the meeting is to learn about the
daily life of families from the female story, in this
case from Sarah's point of view, considering her
active participation and constant contact with the
neighborhood and departmental reality.
Reality
He mentions that there are currently 259 homes and
that the families in the neighborhood are mostly
the
large, which accentuates and highlights
"worrying" socio-economic situation that families are
going through.
During the development of the interview, the
different age groups (childhood – adolescence –
adulthood – older adults) and different problems
that Sarah visualizes in the continuous contact with
her neighbors are discussed, highlighting the
perception of the greatest difficulties in adolescents,
pointing out school dropout, teenage pregnancy, low
or no family motivation to continue with studies,
problematic consumption.
In an egalitarian way, another of the vulnerable
groups to which she refers is women, stating "There
is a lot of gender violence here, I have friends that I
have known for years that I never imagined that they
suffered violence... People here are very reserved."
As a central problem of the neighborhood and from
which others derive, he points to the scarce cultural
and economic capital of family groups, where he
refers to "hunger is the main problem, people live on
soup and tea when they are lucky... This leads to more
violence in families... mothers who have to feed 9
children and have to make do with the little they
have."
Regarding the distribution of household chores, she
mentions that men are the "economic providers"
while women are mostly in charge of all household
chores.
She adds that generally the women, mothers of
families, are in charge of making the food for the
family group, therefore, of resolving "with what there
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REP 001_GMSA_SUSTENTABILIDAD_ 2023
Olga expresses difficulty in the continuity of the
enterprise in terms of making party dresses due to
the high costs of the fabrics. Visualizing great
capacity for adaptation considering that at no time
did he stop production, but rather adjusted to the
inputs he could get, also expanding to the creation of
stuffed animals, decorative accessories, that is,
adding to his textile skill the incorporation of
recyclable materials (paper, plastics).
During the meeting, Olga says that when she won the
project she was working elsewhere, but she
comments that currently her family group only has
the income they derive from the production of
dresses, costume rentals, the sale of accessories and
various meals at fairs and privately. In addition, she
mentions having completed a hairdressing course in
September that allows her on some occasions to
participate in fashion shows, where she is not only in
charge of making dresses, but also aims to show her
hairstyle skills.
In accordance with the above, it can be said from the
monitoring of the enterprise, that it had a positive
impact on the family group, considering not only that
it continues to be carried out, but also serves as a
family solvent.
Although Olga says that the greatest profits come
from the manufacture of party dresses and that due
to the current difficulties related to the economic
situation and therefore the lack of fabrics, she
highlights and values that her continuity in the
textile sector was thanks to GMSA and the delivery
of machines that today allow her to carry out and
produce different jobs.
is" the food of all the members. It mentions that, due
to the current economic reality that does not allow
basic needs to be satisfied, an increase in domestic
violence and generalized "unrest" is seen in "the
neighborhood."
Currently the neighborhood has a Neighborhood
Union in the process of organization, holding casual
meetings in the home of Sarah and Alejandro in
order to improve streets, lighting, housing and
punctually the main entrance street that presents
serious flooding difficulties when it rains, affecting
especially the homes located on the block.
Later he mentions that the socio-economic situation
of the neighborhood would be the same at the
departmental level : "I know people from all over
Ullum and it is bad for everyone, there are more
robberies, the police do nothing... Nothing works well,
neither the health nor the municipality, nor the
firefighters, some time ago there was a fire and we
settled between neighbors."
According to Sarah's stories, a bond of closeness
between neighbors is visualized, not reflecting trust
in the different departmental institutions.
Regarding the knowledge of the Hualilán project, he
says that the community is largely aware of the
presence of Golden Mining in the department,
adding : "Here everyone finds out what Golden does,
but it is also a community that is quick to offend... So
maybe they do a lot of things right and 1 they don't
like it and they keep the bad... Although there is
optimism in terms of job creation, people need and
look not only for you but in general for quick answers,
solutions... People are tired."
MEETINGS INDIVIDUALES_ ENTREPRENEURS
REFERENT _ MRS. OLGA RODRÍGUEZ
It is coordinated by the GMSA Community Relations
team, meeting with Mrs. Olga Rodríguez, winner of
the Ullum Emprende in 2022.
The reason for the meeting is to follow up on the
venture, because Olga was the winner when she
presented her project "Light and Hope" in the textile
sector.
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REP 001_GMSA_SUSTENTABILIDAD_ 2023
Things to consider
According to the
interviewee, the Community
Relations team will take into account and evaluate
the possibilities to provide inputs (plastic bottles,
paper, fabrics, etc.) that allow Olga to continue
production and generate greater income in pursuit
of family well-being.
Address: Bº Ullúm II, M/B, C/7.
Golden Mining values the spaces created so that
children and adolescents can know and have access
to their rights, fundamental spaces so that families
and the community in general can become aware of
the importance of caring for and respecting children.
Municipality of Ullum
Toys are delivered
to Mr. Dante Noriega,
Undersecretary of Social Action, who celebrates
Children's Day on August 19 at the Municipal
Campsite of the department.
On August 17 and 18 of this year, the Community
Relations team, on behalf of GMSA, was present by
delivering toys in different sectors of the Ullum
community, in order to provide collaboration in the
celebrations for Children's Day.
Educational Institutions
Toys were delivered on the one hand to the "Ullum
Multiple School" and on the other, to the "Elvira de la
Riestra School".
Religious Organizations
Toys are given to Mr. Pablo Migueles and Mrs. Mara
Molgaray, Pastors of the Evangelical Church, who
held the event on September 3.
Social Organizations
1-Toys are delivered to Mrs. Alejandra Bustos,
referent of the picnic area "Bichito de Luz" located in
Villa del Lago.
2-Toys are delivered to Mrs. Daniela Salinas, referent
of 3 picnic areas (Bº Grimalt, Bº 25 de Mayo, Bº
Municipal) "Fundación Calas", who invites the
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DEPARTAMENTOS
➢ Ullum (13 and 14 July).
➢ Rawson (07 and 09 August/ 28 August / 7
September/ 15 September).
➢ St. Martin (11 August/20 September).
➢ May 25 (September 13).
➢ Saint Lucia (14 September).
➢ Rivadavia (19 September).
➢ July 9 (September 22).
SERVICES PROVIDED
1. -Citizen Security Workshops.
2. -Primary Health Care and Vaccination.
3. - Pension Advice.
4. -Social Bottle.
5. -EPRE: registration for energy subsidies.
6. -Addiction Prevention Workshops.
7. -Healthier women.
8. -HPV and Colon Cancer Testing.
9. -Counseling Accompany Program, aimed at
victims who suffer or suffered gender-based
violence.
10. DNI Operational.
11. Proprietary Regulation.
12. Upload Card.
13. First and Second 1000 days: delivery of kits,
dessert tasting and informative talk.
14. Healthy eating workshops.
15. Respectful parenting workshops.
16. Gynecologic care (PAP).
17. ANSES.
Community Relations team to be part of the
celebration on August 29 of this year.
3-Toys are delivered to Mr. Alejandro Chirino and
Mrs. Sarah Flores, referents of 6 picnic areas, and the
Community Relations team attends the celebration
that took place on August 31 at the Bº 25 de Mayo.
In their entirety, they expressed their gratitude to
Golden Mining, mentioning the
importance of
donations considering the complex socio-economic
situation that families in the department are going
through and valuing that each child can receive a gift
on their day.
S2 SAN JUAN THE CUIDA
It has been possible to reach different departments
of the province (7), addressing the total number of
people who attended for some service and/or
training that the San Juan Te Cuida Program has and
makes available.
22
REP 001_GMSA_SUSTENTABILIDAD_ 2023
Workshop aimed at informing about the activities
and trades carried out by the inmates and how the
production for the replacement of raw materials is
marketed.
-ANSES: advice and the possibility of carrying out
to retirements, pensions,
procedures related
unemployment benefits, family allowances, among
others.
-Civil Protection: workshop aimed at seismic
prevention, providing information on what to do
before, during and after an earthquake.
23
REP 001_GMSA_SUSTENTABILIDAD_ 2023
-In the trailer there were qualified personnel
carrying out counseling on prevention of sexually
transmitted infections, HIV testing and vaccination.
-Healthier women: breast studies were carried out
through a self-adhesive device that contributes to
the detection of potential breast diseases, including
breast cancer.
-Occult blood test (self-taking) aimed at the
prevention of colorectal cancer.
24
REP 001_GMSA_SUSTENTABILIDAD_ 2023
-My first and second 1000 days: delivery of kits and
food products with the essential vitamins and
minerals for each stage.
My First 1000 Days covers from the gestation period
to 2 years of age of the child, while My Second
Thousand Days is intended for children from 2 to 4
years old.
-Counseling of the Municipal teams belonging to the
Area of Addictions and Area of Women.
In September 2023,
the Sustainability and
Community Relations team of Golden Mining S.A.,
within the framework of World Suicide Prevention
Day, organizes the suicide prevention workshop for
6th year students of the EPET No. 9 school in the
Ullum department.
One of the purposes of this workshop is to inform
about one of the problems that affects our society,
but about which little is said.
25
REP 001_GMSA_SUSTENTABILIDAD_ 2023
The axes to be discussed in the workshop were:
➢ Suicidal behavior disorder.
➢ Protective factors/red flags.
➢ How to manage a healthy adolescence.
In Argentina, suicides are the 2nd cause of death due
to external causes, in the 15 to 19 age group, the
most frequent are traffic accidents, followed by
suicides.
During the years 2021 and 2022, the suicide rate
increased by 17% in the province of San Juan. In
2021, there were 63 deaths by suicide, reaching a
total of 76 cases in 2022.
It is believed important to cover and reach the
different age groups of society, considering that
suicide is a social problem that affects all ages, and
that according to the statistics of the province of San
Juan from 2011 to 2022, suicides in women
according to their age group present variations and
no year was similar to the other (2017 young women
between 15 and 19 years old had the highest rate,
while in 2022 it was women aged 40 to 69 years), in
men there was uniformity, with men aged 20 to 39
being the highest rate.
Golden Mining is a topic that has been addressed
together with the community of Ullúm. In 2022, the
workshop was held and was aimed at adults, while
this time it was intended to reach young people by
providing the possibility of access to responsible
information.
During the year 2022 in the department of Ullúm,
there were 18 deaths by suicide and 36 suicide
attempts, which positions this problem in a place of
concern for the entire community of the department.
In the development of the workshop, a group with
little participation was visualized, in the first
instance, and as the group dynamics progressed,
they began to participate, which invited the rest of
the classmates to join, some even to share personal
experiences.
It is assessed that the workshop had a positive
impact in terms of:
-At the end, they mentioned the topics explained
denoting attention during the workshop, using
words such as "it was interesting, we loved it".
-Teachers and directors who expressed the value of
the workshop due to the fact that not many external
proposals arrive because
"remote"
department.
is a
it
-The young people involved were observed at all
times.
- Active participation in group dynamics.
-Individual consultations by students to professional
lecturers on advice in relation to the subject
addressed.
-Openness on the part of the educational institution
to carry out other joint work.
In August 2023, the jewelry workshop began,
organized by the Sustainability and Community
Relations team of Golden Mining S.A., with the
26
REP 001_GMSA_SUSTENTABILIDAD_ 2023
purpose of providing job and learning opportunities
to the Ullum community.
During the course, the necessary information is
provided so that the students, once they finish, can
develop in the purchase of raw materials, knowing
not only the various materials on which they can
work (nickel silver, copper, leather, others) but also
suggested thicknesses to request for the realization
of the pieces depending on the one they want to
make (hoops, rings, charms).
One of the fundamental objectives, to which Golden
Mining aims from the dictation of the same, is to
provide tools to the community that make it possible
to learn a trade and have a quick job that can be
exercised without geographical limitations.
The workshop is aimed at supporting the socio-
economic development of families in the department
of Ullum and enhancing capacities and skills through
the creation of original pieces by each artist.
Each student has a necessary toolkit for the course,
and it is important to mention that the tools they use
will be their own at the end of the workshop to
facilitate continuity in the production of each.
27
The workshop is divided into two parts, which will
be carried out together:
➢ Knowledge of jewellery (tweezer handling,
fretwork, texturing, sanding, polishing, design
and production of a line).
➢ Marketing plan: provide basic knowledge so
that the student can sell a piece of artisanal
elaboration (pricing/methods to sell on social
networks).
It is relevant to mention that the registration for the
workshop was high, having to select on this occasion
a certain number of students (10) in order for the
learning to be personalized and aiming that each
person who takes it can have a space later to be able
to sell their handicrafts.
The workshop is planned in four intensive classes,
giving space between classes so that they can
advance at home and make the most of the
knowledge of the workshop leaders, answering
doubts, correcting and improving the pieces.
At the end of the workshop, certificates are given to
the students.
REP 001_GMSA_SUSTENTABILIDAD_ 2023
EVALUATION
The workshop was given according to the initial
planning and schedule, although some modifications
were made in terms of the closing date, it is believed
that it has a positive influence on the students
considering that they were able to take advantage of
the total hours of the last class for the improvement
of the pieces and consultation of doubts.
As for the call and the dissemination, which lasted 6
days, it is estimated that the time was pertinent
considering that the number of registrants far
exceeded the quota of the workshop.
As for the students, it was possible to observe a
group interested in learning jewelry, considering the
attendance to the total of the classes and from the
active participation both in person and through the
WhatsApp group.
According to the accounts of the attendees of the
workshop, it can be noted that it generated
enthusiasm, being notorious from the return of the
attendees, who used words of gratitude with the
company referring that they had never heard about
goldsmithing and had no knowledge that the pieces
were made by hand, mentioning that it would have
been innovative in the department and useful not
only in learning the trade, but also on a personal
level.
Without losing sight of the main objective of the
workshop, which was to provide job opportunities,
it is considered, according to what was stated by the
participants, that the workshop had other positive
scopes based on the stories of the women who
referred that the "space" would have generated the
possibility of getting out of the routine, of
disconnecting from daily responsibilities (mostly
related to household chores – housewives). allowing
themselves to grow.
This is all the more important in a context that still
stigmatizes women who spend time away from
home for their own benefit.
Although the completion of the classes is recent, he
does visualize so far, that the group maintains an
active communication, organizing for the purchase
of supplies for the realization of new handmade
pieces.
A large part of the attendees referred to having
difficulties in the purchase of supplies throughout
the workshop, due to the economic situation they are
going through, which is why, when they meet, they
reduce costs by making group purchases and also
producing a motivating effect on the continuity of
the trade.
The team will monitor the group of students to
evaluate the results of the workshop in the medium
and long term.
In November 2023, the ceramics workshop began,
organized by the Sustainability and Community
Relations team of Golden Mining S.A., with the
purpose of training the community of Ullum on the
craft of ceramics.
On this occasion, the teaching was held on Saturdays
in 4 intensive classes of 8 hours each, starting on
November 11 and culminating on December 2.
The intensive course modality was suggested by the
workshop participants who say that, in the ceramics
trade, the best way to work is not to "cut", because
the work of ceramics requires practices such as
baking (charcoal kiln) that for the firing of several
pieces it takes approximately 7 hours between
cooking and cooling.
On the other hand, those in charge of the workshop
mentioned that the techniques used to decorate
(sgraffito, burnishing, engobe, relief) need a certain
drying time (approx. 1 week) between being made,
decorated and cooked, this being the reason why
there is 1 week between classes.
Brief description of the workshop dictation:
In the first class, they gave an introductory talk about
the craft of ceramics where they were able to see the
origins, being one of the trades that first emerged in
human beings to provide themselves with utensils
28
REP 001_GMSA_SUSTENTABILIDAD_ 2023
for daily needs. In addition, they visualized types of
clay, ways of collecting clay, presentation of work
tools, and pinching technique.
Fourth and last class, 2 charcoal ovens are made to
cook the pieces made from the beginning of the
workshop.
In the second class, they began with the assembly
and designs of tiles that will be used for the
realization of a mural.
In the third class, decoration techniques are taught
for the pieces that were made in the 1st and 2nd
class, because, for the techniques of burnishing,
engobe and others, they must be "almost dry".
Each student has a necessary toolkit for the course,
and it is important to mention that the tools they use
will be their own at the end of the workshop to
facilitate continuity in the production of each.
EVALUATION
In the first stage of dissemination, call and selection,
it can be noted that the number of registrants
(ceramics: 91 registered) far exceeds the number of
29
REP 001_GMSA_SUSTENTABILIDAD_ 2023
registrants to the previous workshop (goldsmithing:
38 registered) carried out by GMSA.
In relation to the above, it is considered that the
factors that influenced the increase in enrollments
were:
-Expanding links with the community / providing
information about the workshop in a personal way.
- The dissemination of the workshop by members of
the community itself.
-The positive experience of the previous workshop
"word of mouth" of those who participated in the
jewelry workshop.
- The stage of departmental political transition.
Regarding the quota of the workshop (22 students),
it can be mentioned that, from the selection and
notification, it varied, finding as the main reason the
difficulty of women to attend because they take care
of their children.
Once the group of 22 was formed, everyone was
confirmed to be able to attend. From the second class
onwards, there was a drop in attendance, forming a
group of 16 people who continued to be interested
until the end of the course.
team,
Although the technical reasons expressed by the
workshop leaders in relation to the intensive course
were explained, the Sustainability and Community
Relations
the
in addition
recommendation, agreed on the intensive dictation
in order to provide the opportunity for courses to
those who work on working days and to facilitate
those who are mothers or families to organize
household chores and parenting only once a week.
taking
to
In relation to the last point, it is considered that
intensive dictation was not one of the factors that
influenced the percentage of students who did not
complete the course.
that
a
-Commitment
ceramist/difficulty greater than imagined/vision of
ceramics as a hobby.
comes with
being
"They didn't like pottery.
Percentage of students who completed the course:
73%.
Golden Mining's Sustainability and RRCC team began
the "Educational Terminality" program in November
2022, aimed at accompanying the company's
personnel in the continuity and completion of their
secondary studies.
The follow-up of the same, by the team, consists of
encouraging those who are studying and those who
are not yet, accompanying and offering the most
appropriate educational alternatives to the reality of
each one.
In relation to the above and considering that in
adulthood there are various obstacles (workload of
work, family, others) that hinder the course, is that
the employees of the company who are studying, do
so through Plan Fines because it requires fewer
hours studied.
Another of the functions of the RRCC team is to
accompany in the resolution of obstacles of all kinds
that may arise, especially those related to the
attendance that students must comply with and that,
due to the work roster among others, it is difficult for
them to do so.
It is for the above mentioned that, from the team, it
is articulated with reference to the Fines Plan of the
Ullum department (Mauricio Gamboa) and seeks
solutions to each specific problem that arises in
terms of: certification during working days to justify
absences, adjustments of exam dates when they
coincide with the work date, access to study
material, among others.
Reasons that are considered to have influenced
people who did not complete the course:
TRACKING
There are a total of 14 GMSA employees who did not
complete their secondary studies, of which 7 are
30
REP 001_GMSA_SUSTENTABILIDAD_ 2023
to
the
community, promoting
commitment
involvement and recognition as another actor
among citizens, recognizing needs and demands,
school kits were delivered to social organizations
such as picnic areas and educational institutions.
The delivery of school kits is part of the Back to
School Program that took place during the first week
of March of this year and on this occasion was
extended to other Educational Institutions of the
Department.
The objective of this delivery is to reach children and
contribute, encourage them to remain in educational
institutions, attentive to the various socioeconomic
vulnerabilities that affect families in the Department
of Ullum.
In this way, Golden Mining S.A. expands equal
opportunities and equity by including more Schools
in the Program. With the prospect of generating
actions of interest to this sector linked to Golden
with an impact on the community in general.
Below is the distribution of the total of 350 school
kits:
SOCIAL ORGANIZATIONS
I.
On 2/3, the Community Relations Assistant
delivered 50 school kits to Mrs. Alejandra
Bustos, referent of the "Bichito de Luz" Picnic
studying the Fines Plan from the incentive and
creation of the program, 4 of them completing the
basic cycle and another 3 completing the 1st module
of the oriented cycle. Each cycle (basic - oriented)
contains 3 modules and each module has a course
duration of 3 months, so it is estimated that the most
advanced group (oriented cycle) would be finishing
their secondary studies in the 1st semester of the
year 2024, while those who are completing the basic
cycle would finish in 3 months more than the
previous ones.
On the other hand, there is 1 of the company's
employees who has already completed the course
and only has to take one subject to receive his
secondary degree.
As for the staff who expressed interest in continuing
with the studies but have not yet started (6), the
team is analyzing the existing educational proposals
and evaluating possibilities.
CURRENT REALITY
Due to the current context of the country, there is the
possibility that new quotas will not be opened and
new groups will be created to enter the Fines Plan,
that is, those who are studying should be able to
finish, but those who are interested in enrolling
cannot do so because there is uncertainty about the
continuity in the financing of the Fines Plan at the
national level.
One of the possibilities that the RRCC team is
evaluating is private funding (closed group) that
allows
interested personnel to continue their
education.
Another possibility is a National program "Adults
2000" that is taken virtually, in which 2 people from
a group of 6 who remain to complete their studies
showed interest.
School Kit Delivery Report for the start of the 2023
school year:
In line with the Corporate Policies of Golden Mining
S.A., and with the purpose of extending the
31
REP 001_GMSA_SUSTENTABILIDAD_ 2023
EDUCATIONAL INSTITUTIONS
VI.
VII.
On the 1/3rd of this year, the Principal
Esther Quiroga of the Ullum Multiple School
was given 40 school kits for 45 young people
who attend this educational community.
During the same day, 25 school kits were
delivered to the Director Rolando Borbore of
the Higher Institute of Ullum, on his behalf
Mr. Claudio Ponce, administrative secretary,
received the kits.
FRAMEWORK AGREEMENT UNSJ_GMSA
In November 2023, we signed a Framework
Agreement with the UNSJ. The aim of the programme
is to collaborate and develop common objectives in
the field of education, research and training of
professional resources. We firmly believe in working
together to
job
opportunities, and scientific development of the
entire community. That is why it makes us very
proud and we celebrate this progress in our
educational alliance with the UNSJ.
improve the quality of
life,
Area, located in the Villa Lago of the
Department, where 65 children from the
area attend.
II.
III.
IV.
V.
On 2/3, Mr. Alejandro Chirino was given the
quantity of 75 school kits for children who
attend the picnic areas of Bº 25 de Mayo,
V°Sta Rosa, B° Grimalt 1, B° Dique 1, Loteo
Municipal Virgen de Mogna; who carry out
community activities for a total of 480
children.
On the same day of the 2/3, 50 school kits
were delivered to Mrs. Daniela Salinas,
the Calas
councilor and
Foundation and 3 Picnic Areas, B° Grimal t,
B° Municipal, B° 25 de Mayo. With a total of
250 children.
On 3/3, 35 school kits were delivered to Mr.
Salvador Talquenca, Golden Mining staff by
direct demand for the Huarpe del Encón
community of the 25 de Mayo Department.
On 28/2, 25 school kits were delivered to the
referent Mrs. Sandra Quinteros of the De
todo Corazón de Caucete Picnic Area.
referent of
32
REP 001_GMSA_SUSTENTABILIDAD_ 2023
students to carry out their internships in a new
environment.
The lines of study and tasks to be carried out by the
interns are planned in such a way that a mid-level
technician is able to perform with a certain level of
autonomy.
In this sense, they are organized on the current
curricular designs of the technician in chemical
technicians, for which they must:
DURING THE PRACTICE
IIM-_GMSA SUPPLEMENTARY AGREEMENT
➢ Sample collection. Identification of minerals
In December 2023, a complementary agreement was
held between the Institute of Mining Research of the
Faculty of Engineering and GMSA in order to allow
the participation of researchers from the research
units, in activities carried out by THE COMPANY:
Institute of Mining Research (IIM)- Institute of
Chemical Engineering (IIQ) -Faculty of Engineering
(FI)- Institute of Basic Sciences (ICB)-UNSJ Mining
Research, to carry out updating, training and
research activities.
The Educational Linkage Program, organized by the
Sustainability and Community Development team of
Golden Mining S.A., aims to generate professional
internships for local students, establishing links with
educational institutions in order to allow the
training of students.
Another purpose of the program is to promote
continuity in studies, in this case, from the possibility
of carrying out internships in the Hualilán project,
allowing the interns to link closely with the
company's staff, acquiring new experiences that will
surely be part of their process in future decision-
making.
INSIDE EBEDON Nº9
In September, the students of the EPET School No. 9
began their internships in the Hualilán project,
being the first time that the educational institution
signs an agreement with a mining project, which
caused great expectations and enthusiasm in the
33
in samples.
➢ Core recording (core cutting, core analysis,
mineral recognition, degree of fracturing)
➢ Sample preparation (crushing, grinding,
sample quartering and fractionation,
packaging)
➢ Laboratory and analysis of minerals
(chemical tests).
➢ Acquire the ability to transmit knowledge.
POST-PRACTICE
➢ Obtaining and creating a georeferenced
satellite image of the project
➢ GPS Practice
➢ Creation of a report (that meets the
requirements of the chair)
➢ Printing of the copies
➢ Oral presentation (defense of the practice
before a jury)
➢ Ending
On this occasion there are 4 students divided into 2
groups who will carry out their
internships
alternately
the month. They will
throughout
complete a total of 80 hours in Hualilán that will
allow them to relate theory and practice from within
the project.
SCHEDULE
GROUP
JOIN DATE
DEPARTURE
DATE
08/09
15/09
22/09
29/09
GROUP I
GROUP II
GROUP I
GROUP II
The first group to go to the project is made up of 2
female students, Brenda and Aldana.
04/09
11/09
18/09
25/09
REP 001_GMSA_SUSTENTABILIDAD_ 2023
DEPARTMENTAL REALITY
Taking
the baseline of February 2023 and
considering the data obtained from a sample of
1,302 people in terms of education (educational
level that the community of Ullúm is studying or
studied), it is observed that there is a high
percentage of respondents who are studying or
studied up to the secondary level (42.7%), and a
little higher than those who are studying or studied
up to the secondary level (42.7%). finding a
significant decrease in the number of people who are
studying or have studied tertiary (4%) and
university (5.7%) levels.
The second group consisted of 2 male students,
Agustín and Joaquín.
All students are in their last year (7th 2nd) and the
teacher responsible for the internship is Laura Arce.
It is important to mention that the students leave the
school for the project on Mondays, with GMSA staff
taking care of the transfer to Hualilán where they
carry out their internships during the week and
return on Friday.
students
The Community Relations team monitors and
accompanies
to provide
confidence, openness and comfort to the students as
well as to their families and educational institution,
who are kept permanently informed.
in order
According to what has been mentioned above and
taking the stories of referents of the community of
Ullúm, the foundation and creation of this program
arises,
generating
transformations that reach our young people,
contributing to generate positive changes on the
manifest problems such as:
conviction of
from
the
-Dropout.
-Lack of life project (frustration, uncertainty).
that
professionalizing
practices
Considering
theory-practice
to
contribute not only
relationship, but also invite them to live a new
experience that allows them to broaden their vision
based on the experience in the field and everything
that contact with an "other" implies.
the
DOMIGO FAUSTINO SARMIENTO INDUSTRIAL
SCHOOL
The Educational Linkage Program, organized by the
Sustainability and Community Development team of
34
REP 001_GMSA_SUSTENTABILIDAD_ 2023
S.A.,
generate
Golden Mining
professionalizing practices
local students,
establishing links with educational institutions in
order to allow the training of students.
aims
for
to
So far in 2023, there are 8 high school students who
have carried out internships in the Hualilán project,
with the support and training of GMSA staff.
In the month of October, 4 7th year students from the
Domingo Faustino Sarmiento Industrial School
carried out their internships. The tasks to be carried
out by the interns were organized according to the
current curricular design of mining techniques.
It is worth mentioning that this specialty (mining
technicians) has a total of 4 students within the
Industrial School, that is, all of them did the
internships in the project.
DURING THE PRACTICE
His expertise was based on sample collection,
mineral
sample
preparation, laboratory and mineral analysis, among
others.
identification,
records,
core
35
REP 001_GMSA_SUSTENTABILIDAD_ 2023
POST-PRACTICE
POSTDOCTORAL FELLOWSHIP
Each intern must make a final report with some of
the topics seen during the internship and defend it in
an oral presentation.
To carry out the final project, in addition to having
the experience of 40 hours of internship in Hualilán,
the possibility of continuing in communication with
collaborators of the company is provided in order to
solve any inconvenience that may arise in the
assembly of the final project.
The group of students carried out their professional
internships from October 2 to 6, taking care of the
transfer to the personal project of GMSA, entering
Hualilán on Monday and returning through the
company on Friday being received by teachers,
family and the Community Relations Assistant.
At the end of the internship, the 4 students
mentioned having achieved the selection of the
research topic, describing their time in Hualilán as
successful.
36
GMSA continues
local scientific
to bet on
development, in this case making an agreement with
teachers and researchers in the province and the
country. The studies carried out by Dr. Verónica
Bastias
of
mineralizing magmatism of the Hualilán Mining
District, Western Precordillera of San Juan", are
essential to continue knowing the genetics of the
deposit and contribute to other models with similar
characteristics.
characterization
"Metallogenetic
General Objective
The general objective of this research
is to
the mesosilicic
metallogenetically characterize
intrusives of the Hualilán mining district in order to
identify those responsible for the mineralizing
processes.
Specific objectives
In order to meet the general objective proposed, the
following specific objectives are proposed:
To characterize from the petrological point of view
to
the
mineralization.
subvolcanic units genetically
linked
this
achieve
objective,
To
petrographic,
mineralogical and geochemical studies of the
intrusive bodies present in the study area will be
carried out, which will establish their relationship
with the mineralization, characterize the magma
that gave rise
their
mineralizing potential.
them and evaluate
to
✓ Determine alteration and ore associations.
✓ Petro-mineralogical studies will be carried
out to establish the paragenesis of ore
minerals and alteration associations, as well
as their relationship in space and time.
✓ Establish
the origin and evolution of
mineralizing fluids.
✓ The analysis of the paragenetic sequences of
alteration and ore, complemented by
isotopic studies and fluid inclusions, will
allow us to determine the source, the
the
physicochemical
conditions
and
REP 001_GMSA_SUSTENTABILIDAD_ 2023
temporal evolution of the hydrothermal
solutions that gave rise to the mineralization.
✓ Construct the metallogenetic model.
From the integration of all the information obtained,
it is expected to define the evolutionary genetic
model for mineralization and establish the control of
magmatism over mineralization.
The
"Hualilán Nuestra Casa" visit program,
organized by the Sustainability and Community
Development team of Golden Mining S.A., aims to
build and strengthen ties with our communities
through guided tours of different groups that wish to
learn about the experience of the Hualilán project in
the field.
This year, several visits were made to the project,
one of which was by a group of students and
professors from the University of Bahía Blanca of
the Bachelor's Degree in Geological Sciences.
The purpose of the program is to reach the different
groups and sectors of the community, this time one
of the vulnerable groups that are our older adults,
considering it of great value that they can feel part of
it and know what the work is like from within the
project.
In the month of September, a group of Older Adults
from the Ullum department, of approximately 30
people, visited the project, being received by Golden
Mining personnel who guided the group and
explained what the work on the project is like.
A visit was also made by the EPET No. 9 school in
Ullum, so that the young people of the department
37
REP 001_GMSA_SUSTENTABILIDAD_ 2023
could meet and learn from the work carried out in
the project. It should be noted that the specialty with
which students finish their higher level is that of
Chemical Technicians, linking them in a real way
with the future of the project.
More than 20 students and teachers attended in a
day of learning and knowledge for both parties. On
the other hand, they met with GMSA collaborators
from the Ullum department, who commented on
their experience in Hualilán. In addition to the 4
students from the same establishment, who were
carrying out their professional internships in the
project.
It should be clarified that, beyond the data collected
for the presentation of IIA, the plan continues and
was implemented in order to establish a solid and
consolidated basis of historical data.
The Gualilán basin (as it also appears in the papers)
is an endorheic basin, so the work that is being
carried out is of utmost importance, thus achieving a
complete understanding of its characteristics.
Since 2022, the analyses have been carried out
uninterruptedly, covering all surface points and new
underground drilling.
RESPONSIBLE
FOOTPRINT
AND
POSITIVE
SURFACE AND GROUNDWATER ANALYSIS
In order to continue with our surface and
groundwater monitoring plan, a series of periodic
physical-chemical measurements continue to be
carried out on all water sources that are part of the
project and in addition to the water basin. It is also
planned to carry out a complementary study on the
hydrogeology of the basin in order to understand
and establish better forecasting frameworks.
38
REP 001_GMSA_SUSTENTABILIDAD_ 2023
NEW HYDROGEOLOGICAL DRILLING
With the drilling of 2 new water wells, it was
possible, for the first time, to obtain concrete data on
the characteristics of the subsoil in hydrogeological
matters. The analyses were carried out by
laboratories that comply with all international
certifications.
NEW EVAPORATION MEASURING STATION
New equipment for evaporation measurement was
acquired, which will allow us to obtain more
complete data on the local climate and to be able to
strengthen our database. This is of vital importance
for the life of the project, since the greater the
quantity and quality of data, the less uncertainty
when assessing and preventing environmental
damage. The measuring station will work
in
conjunction with the already 3 existing climate
measurement stations, thus completing the data
already collected by them.
Both were drilled between 2022 and 2023, both
culminating in great success. The basin turned out to
have a large storage capacity and flow, as well as the
physical-chemical characteristics of its waters. This
future mining
provides a great support
operations, as well as supply to the camp.
for
The tank type is a "Class A". This is a cylindrical
galvanized sheet tank, 1.21 m in diameter and 25 cm
deep. It is placed on a 10 cm high wooden platform,
perfectly horizontal. The volume of water needed to
maintain the constant level is measured, in the unit
of time, which can be 6, 12 or 24 hours. The volume
39
REP 001_GMSA_SUSTENTABILIDAD_ 2023
of water consumed is transformed into mm of
evaporated water per unit of time. It is installed on a
wooden stand, which is placed and leveled on the
ground, away from shrubs, trees, and other obstacles
it,
that obstruct
representing open water in an open area. On a daily
basis, the result of evaporation and precipitation is
measured inside the well, using a high-quality
evaporation micrometer with a measuring range of
100 mm and an accuracy of 0.02 mm.
the natural airflow around
INTRODUCTION
Climate action is essential in the fight against climate
change; In this way, it is the responsibility of all
countries, companies and society in general to
measure and quantify their carbon footprint with
the aim of decarbonizing their activities and, thus,
reducing greenhouse gas (GHG) emissions. In
addition, offsetting (neutralizing) emissions is a
commitment for our activities to be considered
carbon neutral.
SCOPE
In 2023, GMSA took the initiative
to quantify its carbon footprint and start generating
concrete actions in the fight against climate change.
In this way, we measure our footprint in the three (3)
Scopes established by the GHG (Greenhouse Gas
Protocol) methodology.
Source: GHG Protocol
OUR RESULTS
Our results show that 96% of our GHG emissions are
related to Scope 1; And that is where we have begun
to take concrete actions to reduce our carbon
footprint.
Source: Golden Mining S.A. Greenhouse Gas Inventory.
In addition, and as a demonstration of GMSA's
environmental commitment, the company offset the
entire footprint for the three Scopes. In this way, we
obtained the international certification of being a
carbon neutral company. This milestone positions
GMSA as the first mining company in Argentina to
have achieved the aforementioned certification.
CONCLUSIONS
The decarbonization of the economy is more than a
necessity, it is already a reality and a window to the
future of the operations of the entire industry.
GMSA
is already part of such a necessary
transformation, being a benchmark for mining and
for the society of San Juan.
40
REP 001_GMSA_SUSTENTABILIDAD_ 2023
We are currently in the process of recertifying our
carbon
footprint, as well as maintaining the
distinction of being recognized as a carbon neutral
company.
for
and
Wildlife species monitoring is an environmental
management tool that is currently used to determine
changes in the ecosystem. Monitoring programs at
different scales and biological levels are of vital
evaluation of
the proper
importance
conservation
programs.
Monitoring allows the systematic collection of
information on different species over time and
serves to evidence population trends over a given
period of time. Population trend refers to the
sustained and systematic variation in population
size over time, which differs from cyclical, seasonal,
or stochastic variations. 1
development
Actions aimed at the protection of biodiversity
require detailed information on the species that
make up the communities as well as on the
interactions of organisms with each other, with the
habitat they occupy and with the societies that make
use of the different resources of natural systems.
From the outset, GMSA has developed plans for
research and the preservation of biodiversity in our
area of
influence. 2 comprehensive annual
monitoring was carried out, in order to complete the
survey against stations, and thus manifest a database
of all the biota of the place.
RESPONSIBLE,
TRANSPARENT BUSINESS
ROBUST
AND
As of July 2023, GMSA is part of the Argentine
Network of the United Nations Global Compact, the
largest sustainability initiative in the world.
1 VILAVICENCIO, FAUNA AND VEGETATION MONITORING REPORT, HUALILAN. 2023
41
REP 001_GMSA_SUSTENTABILIDAD_ 2023
The Global Compact (1999) is based on the vision of
working together between business and the UN to
create a "global impact" in terms of shared values
and principles.
RELATIONSHIP BETWEEN
COMPACT
SUSTAINABILITY STRATEGY
AND
GMSA'S
SDGS, GLOBAL
CORPORATE
The Sustainable Development Goals (SDGs) and the
Global Compact have a common purpose, as both
initiatives seek
to promote responsible and
sustainable business practices. The Global Compact
is a United Nations initiative that invites companies
to adopt ten universal principles on human rights,
labour, the environment and anti-corruption. The
SDGs, on the other hand, are a set of global goals to
eradicate poverty, protect the planet and ensure
prosperity for all.
It calls on companies to incorporate 10 universal
principles related to human rights, labour, the
environment and anti-corruption
their
strategies and operations, as well as to act in ways
that advance social goals and the implementation of
the SDGs.
into
In Argentina, only 417 companies adhere, including
all industries.
More than 17,000 companies in the world, of which
3800 are NGOs.
Golden Mining has been a member since July 2023
and was able to join thanks to the fact that our
programs are already aligned with these principles.
Our programs are aligned with the following
principles:
42
REP 001_GMSA_SUSTENTABILIDAD_ 2023
THE SDGS AND THEIR RELATIONSHIP WITH OUR
COMPANY
43
Annual Financial Report
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
DIRECTORS' REPORT
The Directors submit the financial report of Challenger Gold Limited (“the Company”) and the entities it controlled during
the period (“the Group” or “Challenger”), for the financial year ended 31 December 2023.
DIRECTORS
The names and details of the Group’s Directors who held office during the financial year ended 31 December 2023 and
until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Sergio Rotondo MEcom, MBA
Executive Chairman
Mr Sergio Rotondo has an extensive background in managing billion-dollar construction projects from design through to
completion and has partnered with some of Argentina’s largest real estate developers and designers. Importantly, Mr
Rotondo is also the founder of Golden Mining SA, the previous owner of Hualilan Gold Project.
Kris Knauer B.Sc (Hons), (Geological and Earth Sciences, Geosciences)
Managing Director
Mr Knauer 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 Resource Group Ltd, becoming the Managing Director for the first 18 months. Citadel completed a DFS on
the Jabal Sayid copper project in Saudi Arabia before being taken over for $1 billion.
Sonia Delgado LLB (Hons) MLaw
Executive Director (appointed 28 November 2023)
Over a distinguished career in the Argentinian public sector, Dr. Delgado has occupied positions including: Assistant Office
of the State Prosecutor of the Province of San Juan; Undersecretary of Planning and Promotion of Mining Development
and, more recently, Secretary of Mining for the province of San Juan, Argentina.
Dr. Delgado's legal background and strategic view is a significant asset in navigating the regulatory environment of the
mining industry.
Fletcher Quinn
Non-Executive Director
Mr Quinn has over 35 years’ experience in venture capital, corporate finance and investment banking. This includes
extensive experience with both listed and unlisted companies, including public company development, management and
governance. Mr Quinn was the founding Chairman for ASX entities Citadel Resource Group and Sirocco Resources.
Pinchas Althaus MRb
Non-Executive Director (appointed 8 February 2023)
Mr Althaus is based in New York and has been an Executive in the mining and resource sector since 2002. Mr Althaus
was most recently the Founder and Chief Executive Officer of USA Rare Earth, which acquired and developed the Round
Top heavy rare earth and critical minerals project in Texas.
As CEO Mr Althaus transformed USA Rare Earth from a resource startup to one of the highest-valued rare earth companies
in North America. Under his tenure, USA Rare Earth opened the first rare earth and critical minerals processing facility in
North America, located in Colorado, and acquired the only neodymium-iron-boron (NdFeB) permanent magnet
manufacturing system in the Americas, formerly owned and operated in North Carolina by Hitachi Metals America, Ltd.
Additionally, Mr Althaus has experience in the gold sector as the former founder and CEO of Dominion Minerals Corp,
which acquired and developed the Cerro Corcha Gold / Copper project in Panama. During his tenure as CEO, Dominion
defined a significant open-ended gold and copper deposit with a project NPV in excess of US$500 million.
Brett Hackett
Non-Executive Director (appointed 4 May 2023)
Brett has 33 years of experience as an Australian diplomat. For the last 13 years, his principal focus has been on expanding
Australia’s economic and political relationships with the counties of Latin America.
He has served as Ambassador on three occasions; as Australia’s first resident Ambassador in Afghanistan (2006-2008), as
Ambassador to Brazil (2011-2014), and most recently as Ambassador to Argentina (2018-2023).
4
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
In Mr Hackett’s role as Ambassador to Argentina he accrued considerable experience in promoting Australian interests,
particularly in Argentina’s mining sector. Mr Hackett is highly regarded on both sides of politics in Argentina and, as the
most recently returned Ambassador, he maintains a current and enviable list of contacts in Argentina.
Scott Funston B.Bus, CA, AGIA ACG
Resigned as Executive Director 4 May 2023. Company Secretary and Chief Financial Officer for the full year.
Mr Funston is a qualified Chartered Accountant and Company Secretary with nearly 20 years’ experience in the mining
industry and accounting profession. His expertise is financial management, regulatory compliance and corporate advice.
Mr Funston possesses a strong knowledge of the Australian Securities Exchange requirements. Scott has assisted several
resources companies operating throughout Australia, South America, Asia, USA and Canada with financial accounting,
stock exchange compliance and regulatory activities. Mr Funston has performed roles as an executive director, non-
executive director, chief financial officer and company secretary for numerous ASX listed companies.
Mr Funston is currently a Non-Executive Director of Koba Resources Limited (appointed 21 December 2021).
Mr Knauer, Mr Rotondo, Dr Delgado, Mr Fletcher, Mr Althaus and Mr Hackett have not been a director of any other listed
companies in the last 3 years.
MEETINGS OF DIRECTORS
During the year ended 31 December 2023, in addition to regular Board discussions, the number of meetings of directors held
and the number of meetings attended by each director were as follows:
Director
Mr Sergio Rotondo
Mr Kris Knauer
Mr Fletcher Quinn
Mr Pinchaus Althausi
Mr Brett Hackettii
Dr Sonia Delgadoiii
Mr Scott Funstoniv
Number of Meetings Eligible to
Number of Meetings
Attend
Attended
5
5
5
5
4
-
1
5
5
5
5
4
-
1
I Appointed on 8 February 2023 ii Appointed 4 May 2023 iii Appointed 28 November 2023 iv Resigned as executive director on 4 May 2023
CORPORATE INFORMATION
Challenger Gold Limited is a public company listed on the ASX (Code: CEL) and is incorporated and domiciled in
Australia.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
Challenger Gold is a gold and copper exploration company. There have been no other significant changes in the nature of
those activities during the year ended 31 December 2023.
REVIEW OF OPERATIONS
Highlights
• Completion of Scoping Study for Hualian Gold Project:
▪ Scoping Study (SS) focussed on a high-grade starter mine at Hualilan finds:
▪ Forecast Earnings before interest depreciation and amortisation (“EBITDA”) of US$738m
(A$1.1 billion) over Life of Mine (LOM);
▪ Rapid payback period of under 1.25 years based on current production target; and,
▪ Forecast for Challenger Gold (CEL) to be one of the lowest cost Top 20 ASX-listed producers.
▪ Key operational findings of the Scoping Study are for Hualilan to support:
▪ Average annual production target of 116,000 oz Au, 440,000 oz Ag, 9,175 t Zn (141koz AuEq3);
▪ Global lowest-quartile C11 cash cost of US$527/oz (A$811) and AISC2 of US$830/oz
(A$1277);
▪ An initial mine life of 7 years, with mineralisation open at depth potentially extending LOM;
5
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
▪ Low-risk starter pit followed by conventional sub-level open stope (SLOS) underground mining;
▪ Processing facility includes a crusher, mill, gravity recovery circuit, conventional sulphide
floatation, and floatation-tails leaching (FTL), with schedule LOM throughput of 1.05 Mtpa;
▪ Production schedule is comprised of 81% Indicated Resource and 19% Inferred Resource 3 4
▪ Compelling financial metrics of the Scoping Study include:
▪ Pre-tax NPV5 US$409m (A$629m) at US$1,750/oz Au $20/oz silver (spot gold price US$1975);
▪ Pre-tax NPV5 increases to A$820m at current gold (US$1,975) and silver (US$23) prices;
▪ Project IRR (Pre-Tax Real) of 75% and a breakeven gold price of US$983/oz.
• Placement of 83,333,334 ordinary shares to raise $10,000,000
• Transformation of the Board of Directors and appointment of new Chairman
• Subsequent to year end raised $5,642,069 through the issue of 66,377,283 ordinary shares and 66,377,283
unlisted $0.14 options with an expiry date of 12 months from the closing date
Company Projects
The Hualilan Gold Project – San Juan, Argentina (CEL 100%) is a high-grade gold and silver prospect associated with
a multi-phase porphyry intrusive. It has extensive historical drilling with over 150 drill-holes dating back to the 1970s.
There has been limited historical production reported despite having in excess of 6km of underground workings. Prior to
the Company the property was last explored in 2006 by La Mancha Resources, a Toronto Stock Exchange listed company.
Since July 2019, CEL has completed over 200,000 metres of drilling systematically which has significantly extended the
high grade mineralisation and discovered an underlying intrusion-hosted system with significant scale. The high-grade
mineralisation at Hualilan now covers 3 kilometres of strike and mineralisation has been defined from surface down to
1000 metres and remains open in all directions. The project has a rare combination of both grade and scale and is emerging
as one of the more exciting South American gold discoveries in recent times.
El Guaybo Project Ecuador (CEL 100%)
The El Guayabo Project is located in El Oro Provence, southern Ecuador, and comprises four contiguous tenement groups,
the El Guaybo, El Guaybo 2, Cerro Pelado 1, 2, and 3 tenements, and Colorado V tenement. The Company has drilled
fourteen of fifteen regionally significant Au-soil anomalies with over 500 metres of mineralisation intersected in seven of
these fourteen anomalies, confirming the potential for a major bulk gold system at the El Guayabo Project.
The Company has completed approximately 40,000 metres of drilling at the project and announced a maiden resource of
4.5 Moz gold equivalent (refer Mineral Resource Estimated page 18 of this Annual report) during the year.
The El Guayabo Copper-Gold Tenement - El Oro, Ecuador (CEL 100%) Prior to CEL the project was last drilled by
Newmont Mining in 1995 and 1997 targeting gold in hydrothermal breccias which demonstrated potential to host significant
gold and associated copper and silver mineralisation. Results from CEL's maiden drill program included 257.8m at 1.4 g/t
AuEq including 53.7m at 5.3 g/t AuEq and 309.8m at 0.7 g/t AuEq including 202.1m at 0.8 g/t AuEq and confirmed
continuous mineralisation over 900 metres strike.
The Colorado V Copper-Gold Tenement - El Oro, Ecuador (CEL earning 50%) adjoins and has the same geology as the
El Guayabo Project. The Geology comprises a metamorphic basement intruded by intermediate alkaline intrusives which
range in age from 40 – 10 Ma (million years age). The intrusions are commonly overprinted by late porphyry dykes and
intrusion breccia suggesting deeper, evolving magmatic systems are feeding shallower systems. The first drill holes by the
Company at Colorado V, confirmed two significant Au-Cu-Ag-Mo discoveries. Results included 528.7m at 0.5 g/t AuEq
from surface to the end of the hole including 397.1m at 0.6 g/t AuEq and 570.0m at 0.4 g/t AuEq from surface to the end
of the hole including 306.0m at 0.5 g/t AuEq.
The El Guayabo 2 Tenement - El Oro, Ecuador (CEL earning 80%) has the same and continuous geology as CEL's
adjoining El Guayabo and Colorado V tenements which are believed to contain a “Low Sulphide” porphyry gold copper
system.” Limited historical exploration has been undertaken on the tenement, with the work that has been done undertaken
by local Ecuadorian groups that targeted high-grade gold. Historical exploration reports record gold mineralisation in
intrusive rocks in outcrop.
The Cerro Pelado 1 , 2 and 3 Tenements - El Oro, Ecuador (CEL option to acquire 100%) cover 64Ha on the northern
and eastern margin of the El Guayabo Copper-Gold Tenement. The Company entered into a farmin agreement with an
option to acquire 100% of the concessions with the Cerro Pelado local Miners Association in 2022. The concessions have
the same and continuous geology as CEL's adjoining El Guayabo tenement.
6
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
HUALILAN GOLD PROJECT AND GEOLOGY
The Hualilan (local indigenous name for “land of gold”) Gold Project is located in San Juan province Argentina. All of the
upgraded 2023 MRE is located on Mina's or Mining Licenses while the overall Hualilan Gold Project consists of a district
scale 600 square kilometres of tenements. Additionally, the Company owns the surface rights covering the main 20,000 Ha
of the Project.
The Hualilan tenements are held via a combination of:
- 235 square kilometres granted to the Company containing the upgraded 2023 MRE; and strike extensions 5 kilometres
-
north and south; and
329 square kilometres pending formal grant to the Company which has been registered to CEL in the Mining Cadastre
of San Juan.
Access to the project is excellent with a double lane sealed highway covering the 120 kilometres from San Juan City, the
regional capital and major mining hub, to within 400 metres from the project. San Juan City has several drilling,
geophysical, and mining services companies, assay laboratories, a base of skilled mining workers contractors, and direct
rail access to Rosario Port 900 kilometres away which has bulk materials handling facilities. The project is at 1200 metres
elevation and both drilling and field exploration can proceed all year round.
Geology of Hualilan Gold Project
The Project is the site of extensive zinc skarn mineralisation with a gold overprint which makes it a somewhat unique style
of mineralisation.
Commonly zinc skarns occur in continental settings associated convergent tectonic plate margins as is the case at Hualilan,
located in the pre-cordillera of the western South American convergent plate margin. Zinc skarns commonly contain high
grade zinc, lead, and silver although zinc is usually dominant. Mineralisation and skarn alteration at Hualilan occurs in all
three main rock types.
1. Limestone (San Juan Formation of Ordovician age) contains high grade mineralisation (manto style) controlled
by bedding parallel faults, cross faults, and contacts with other rock types.
2. Shale and sandstone (of Silurian age) contains lower grade replacement style skarn mineralisation which
preferentially occurs parallel to bedding with 30m of the Limestone contact.
3. Dacitic intrusions (of Mid-Miocene age) contain stockwork fracture and locally breccias which host lower grade
skarn mineralisation.
In all host rocks, the zinc skarn mineralisation is overprinted by a slightly later phase of gold – silver mineralisation. This
second phase of mineralisation is mesothermal to deep epithermal and may be related to but is separate from the zinc skarn.
Importantly, the gold mineralisation is deposited in the same reactivated faults and fractures as the zinc skarn. Precise
mineral paragenesis and hydrothermal evolution of the deposit is the subject of on-going work which is being used to guide
exploration and detailed geometallurgical test work.
The dacitic intrusions which are part of the host rock sequence at Hualilan may be related to the hydrothermal activity that
formed the skarn, although the timing relationships have not been determined. At this stage, we use the term “intrusion-
hosted” rather than “endoskarn” to describe the skarn mineralisation in the dacite.
Gold occurs in native form as inclusions with sulphide (predominantly pyrite) and in pyroxene-garnet skarn alteration. The
mineralisation commonly occurs with pyrite and the zinc skarn assemblage of sphalerite and galena with rare chalcopyrite,
pyrrhotite and magnetite. Importantly, mineralisation contains very low levels of arsenic, mercury, and other deleterious
metals.
Complete oxidation of the surface rock due to weathering is thin. A partial oxidation/fracture oxidation layer near surface
is 1 to 40m thick and has been modelled from drill hole intersections. Where oxidation is more intense, native gold can be
observed. This oxide mineralisation has been the subject of past mining at Hualilan with an unknown amount of gold
having been extracted by washing and more recently by vat leach.
7
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Upgrade MRE
(US$1800 optimised pit shell)
20,000 Ha freehold land
acquired by CEL
Figure 1 - Hualilan Gold Project Tenement Map
Figure 2 - Hualilan Project and surrounds
8
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
HUALILAN SCOPING STUDY (Refer to ASX Release 8 November 2023)
During November 2023, the Company announced the outcomes of the Hualilan Scoping Study ("the Study"). The study
presented an initial economic evaluation of the project and suggests that the project could become one of the lowest-cost
ASX producers, with a rapid payback period, and average annual production of 116,000 oz Au, 440,000 oz Ag, 9,175 t Zn
(141,000 oz gold equivalent1) based on the Study production target.
The Study forecasts EBITDA of US$738m (A$1.1 billion) over Life of Mine (LOM) and a LOM All In Sustaining cash
Cost (ASIC) of US$830/oz using gold price od US$1750/oz. Sensitivity analysis demonstrates the project would require a
grade reduction or gold price reduction in the order of 44% to reach the breakeven gold price of US$953 from an NPV
perspective.
A summary of the study financial outcomes provided in Table 1 with the key assumptions in Table 2. Complete study
details are available in the Scoping Study which is included as an Annexure to the November 8th ASX release.
Notwithstanding the excellent outcome of the Study, the Company has identified several clear, and potentially material,
opportunities for optimisation and improvement. Additionally, the Company is undertaking an external analysis of the
projects carbon intensity, which will be released to the ASX upon completion.
Table 1 - Scoping Study Case 1 (conventional flotation) summary financial outcomes
Revenue
US$1.5B
A$2.3B
C1 Cash Costs
US$527/oz
A$811/oz
All In Sustaining Cash Costs (ASIC)
US$830/0z
A$1277oz
IRR (Pre-tax)
75.2%
Payback Period
1.25 years
(post tax)
EBITDA
US$738m
A$1.1B
Operating Margin
50%
EBITDA/Revenue
NPV5 (Pre tax)
US$409m
A$630m
NPV5 (Pre tax) - spot prices
US$533m
A$820m
Initial LOM
7 Years
(mineralisation open in all directions)
Table 2 - Key Scoping Study Assumption
Price Assumption
Gold
Study Assumption
US$1750/ oz
5 Year Average
$1,710
Silver
Zinc
Lead
AUD/USD
US$20/ oz
US$1.15/ lb
US$0.94/ lb
0.65
$20.72
$1.28
$0.93
0.70
Spot
$1,975
$23
$1.15
0.98
0.65
Metallurgical Recoveries and Concentrate Payability
Gold
Silver
Zinc
Lead
Concentrate Transport (site to smelter including insurance)
Recovery (%)
95.8%
93.0%
89.0%
75.8%
Avg Payability1 (%)
88.4%
54.8%
73.1%
93.6%
US$150/ wmt
9
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Mining Physicals
Tonnes Ore
Tonnes Waste
Underground development
Indicated and Inferred Resource (% indicated/% inferred)
Gold Grade (LOM average)
Silver Grade (LOM average)
Zinc Grade (LOM average Type C material)
Lead Grade (LOM average Type C material)
Unit operating Costs
Open pit Mining (ore/waste)
Open Pit
1.3 Mt
8.4 Mt
82%/ 18%
3.4 g/ t
22.3 g/ t
3.9%
0.33%
Unit
US$/ t mined
Underground
5.8 Mt
2.1 Mt
58,937m
81%/ 19%
3.6 g/ t
12.1 g/ t
2.7%
0.14%
Unit Cost
3.00
US$/ t mined
34.74
Underground Mining
Underground Development
Inclined Development (5 m x 5 m)
Horizontal development (5 m x 5 m)
Vertical Development
Slot Rises (included in underground mining cost)
US$/ m
US$/ m
US$/ m
US$/ m
Underground Development
US$/ t mined
Total Underground Mining and Development
US$/ t mined
Processing (Type C ≥1.5% Zn) 34% total
PMI
Processing (Type B ≥1.5 g/ t Au, <1.5% Zn) 60% total
PMI
Processing (Type A <1.5 g/ t Au) 7% total
PMI`
G&A
1 Payability after Transport Cost . Refining Cost (TC/RC) / Penalties
US$/ t processed
US$/ t processed
US$/ t processed
US$/ t processed
2,828
2,828
2,333
1,500
28.29
63.03
16.31
12.12
9.26
5.38
Study Approach
The Hualilan Project has inherent optionality given that the Hualilan Mineral Resource Estimate (MRE) starts at surface
and contains a high grade core of 8.1 Mt at 5.0 g/t Au, 17.4 g/t Ag, 1.8% Zn at the underground optimisation cut-off grade
of 2.37 g/t AuEq, within the larger MRE of 60.5 Mt at 1.1 g/t Au, 6.0 g/t Ag, 0.44% Zn.
The Study commenced using benchmarked costs provided by Mining Plus from a sub-set of their internal mining database,
specifically originating from operations in Latin America. This allowed for a preliminary options assessment of:
▪ Open-pit (OP) vs underground (UG) vs combination mining
▪ Different potential processing flowsheets which considered multiple circuit combinations which included or
excluded: gravity concentration, floatation (including FTL) and CIL
▪ Multiple potential processing throughput rates; and
▪ Approximate capital cost of various options.
An initial OP optimisation, using the aforementioned Mining Plus benchmarked unit costs from Latin America, indicated
that potential exists for a large open pit which would take advantage of economies of scale. Initial pit optimisation using a
mining cost of US$2.00/t, pit wall slopes of 55o on the east, and a US$1800 gold price generated a pit, which at Revenue
Factor 71, recovered 47.6 Mt of mineralisation and delivered an undiscounted value of US$1.0B, with a further 2 Mt of
high-grade mineralisation potentially mineable via underground methods below the optimised shell.
After considering these initial results and the associated capital costs, the Company took the decision to focus the Study on
the high-grade core of the mineralisation. This decision was primarily made to ensure that CEL had a credible pathway to
fund production via a development plan with a low up-front capital cost and a rapid payback. The present, challenging
market conditions did not appear conducive to the Company’s ability to fund the higher capital cost (and/ or potentially
longer payback period) required for the construction of a high-volume OP mine, despite it being likely that mine
development could be staged to manage capital outflows.
10
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
A key part of the reasoning behind this decision was that the initial pit optimisation showed material levels of sensitivity to
OP mining unit cost and to pit slope angle, particularly on the eastern side of the pit where the Hualilan hills would need to
be pioneered and mined back. The geotechnical data required to support a 55o overall pit slope in the limestone unit of the
Hualilan Hills was not available, and beyond the scope of the study. It should be noted that overall pit slopes greater than
55o are commonly observed in nearby limestone quarries.
Finally, the possibility of a low-grade heap leach as an additional processing stream was unable to be evaluated due to long-
lead (90 day) metallurgical column test work in progress at the time of this release. Heap leaching is potentially an important
opportunity to consider as studies continue as it could provide a low cost pathway to process the low-grade mineralisation
via a large open pit.
Table 3 - Key Scoping Study LOM Financial and Physical Outcomes
Key LOM Production Statistics
Life of Mine (LOM)
Ore tonnes mined
Ore processing rate
Average Annual gold production (recovered)
Average Annual silver production (recovered)
Average Annual zinc production (recovered)
Average Annual lead production (recovered)
Average Annual production (Au equivalent)3
Key LOM Financial Metric
Revenue (LOM)
EBITDA (LOM)
C1 Cost (Real – US$/ oz)
ASIC (real – US$/ oz)
Free cashflow (Pre-tax) LOM
Free cashflow (Average per annum)
Pre Tax NPV5
Post Tax NPV5
Payback Period (Pre-Tax)
Payback Period (Post Tax)
Project IRR (Pre-Tax Real)
Project IRR (Post Tax Real)
Pre Production Capital Costs
Pre-production capital
Contingencies
Total Pre-Production Capital
Key Social Metrics
LOM royalties and corporate taxes
LOM Expenditure
LOM Economic Value Add Argentina
Year 1
US$
$1,465 million
$738 million
$527/ oz
$830/ oz
$682 million
$101 million
$409 million
$295 million
US$
$134 million
$15 million
$152 million
US$
$166 million
$772 million
$938 million
LOM
7 years
7.1 million
1,050,000 tpa
116,000 oz
440,000 oz
9,175 t
474 t
141,000 oz
A$
$2,254 million
$1,135 million
$811/ oz
$1277/ oz
$1,049 million
$155 million
$630 million
$454 million
1.25 years
1.25 years
75.2%
66.0%
A$
$206 million
$23 million
$234 million
A$
$256 million
$1,187 million
$1,443 million
11
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Mine Design and Production Target
The Study mine plan was designed to supply Potential Mining Inventory (PMI) to the processing plant at a rate of
approximately 1 Mtpa. The mine design is comprised of three high-grade starter open pits( North, Central, and South)
which will be mined using conventional excavator and truck techniques over 4 years by a mining contractor. It was
necessary to include a starter pit as an underground startup would not provide sufficient waste material for the construction
of the Tailings Storage Facility (TSF). Additionally, a starter pit offers a reduced production risk profile in the early year
of operation.
Owner-operated underground mining was modelled on the basis of sub-level open stoping (SLOS), with a 30 m crown
pillar between the pit floor and the upper most underground stope. Based on the available geotechnical data, and on similar
operations, the following stoping assumptions were used for the UG mine design:
▪ Level spacing (floor to floor) - 20 m;
▪ Strike length (regardless of stope width) - 20 m;
▪ Minimum stoping width - 2.5 m; and
▪
Stope dilution of 10% and a mining recovery factor of 95% were estimated for this method and included as
part of the scheduling phase
Hualilan will utilise paste backfill and as such there are no further requirements for UG pillars . The three underground
portals have been located outside the open pits to decouple the UG development schedule from OP production rates and to
provide flexibility to start underground development earlier. This was a critical factor in the earlier trade off studies that
negatively affected the NPV of the combined open pit and underground options, with underground mining unable to
commence prior to the completion of open pit mining creating material impact to NPV.
During the pre-production year, PMI will be extracted from the pit and stockpiled, and waste will be sent to TSF for
construction of the first embankment lift, which will initially store two years of processing production. Underground mining
will also commence at the start of the pre-production year in the north and south UG zones. In the first year of production,
the plant will be fed with PMI from the stockpiles (SP), open pit and underground. From the second year onwards, the
plant will be supplied with PMI primarily coming from the underground mine.
When processing commences there will be approximately 655 kt of PMI on stockpiles, which is equivalent to approximately
7 months mill feed, and approximately 400 kt of this is high-grade SP. This also opens the possibility to commence
processing earlier if construction and commissioning is completed ahead of schedule. The underground mine plan has three
operating areas (north, central and south), each of which are capable of being scaled up in response to production issues in
another. There is also scope to share equipment between the 3 underground mining areas, however this option has not been
included in the Scoping Study analysis.
Figure 3: Breakdown of Scheduled Process Plant Feed by Resource Category
Process Plant Feed Indicated/Inferred Resources
100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Year-1
Year-2
Year-3
Year-4
Year-5
Year-6
Year-7
Indicated
Inferred
12
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
A breakdown of the PMI schedule for processing across the life of the project is shown in Figure 1. Over 80% of the PMI
schedule for processing in classified as Indicated Resource, with the balance classified as Inferred Resource. In the early
years of production the percentage of Indicated Resource processed is higher, with an average of 88% Indicated Resource
scheduled for processing in the first 3 years of plant operation.
At the completion of the Scoping Study production plan the unmined component of the Hualilan Project MRE is:
53.5Mt at 1.0g/t AuEq (0.8 g/t Au, 4.9 g/t Ag, 0.32% Zn, 0.06% Pb) - containing 1.7 Moz AuEq
Capital Costs
The capital cost estimate was prepared by Mining Plus and a number of independent external consultants retained by CEL.
There was limited use of benchmarking, with costs generally sourced from vendor quotes/ indicative prices, or detailed first
principal cost analysis using vendor quotes based on the preliminary project design. Where benchmarking was used to
provide any capital costs the primary source was the Mining Plus internal cost database, augmented by Challenger’s
consultants databases. Where benchmarking was used to provide capital cost estimates this was specifically stated.
The cost estimate is expressed in Q3 2023 US$ and used the USD/ARS exchange rate at the time the quotation was provided
(average 200 ARS/USD) for any in-country costs provided in ARS. In practice in Argentina most cost quotes are generally
provided in USD and converted into ARS based on the prevailing USD/ARS rate. The costs do not include allowances for
escalation or exchange rate fluctuations. All costs are exclusive of the Argentinian value added tax (VAT), which is applied
separately in the financial model used for economic evaluation.
The capital cost estimate for this scoping study has a target accuracy range of ±15% where costs have been sourced from
vendor quotes or first principles analysis. The costs developed by benchmarking have a target accuracy of ±35%.
Table 4: Summary Capital Cost Estimate (all figures in US$ million)
Description
Pre-
production
Capital Costs
Sustaining
Capital
Cost
1. Open Pit Development (inc. Truck Shop, Wash Bay, Tyre Bay) 5.8
2. Underground Development (inc. paste plant)
3. Process Plant
4. TSF
5. On-site Infrastructure
6. Off-site infrastructure
7. Owners Costs
8. Indirect Costs
9. Contingency
Total Capital Expenditure
10. Other Pre-production Costs3
Total Pre-Production Capital
21.8
59.0
5.4
8.7
0.0
15.6
2.7
14.7
133.7
18.4
152.1
1. All figures are rounded to reflect the relative accuracy of the estimate.
2. Totals may not sum due to rounding as required by reporting guidelines.
3. Pre-production costs are operating costs that occur prior to the mill operating.
45.0
8.9
3.2
1.5
0.0
0.5
59.0
59.0
Total
Capital
Cost
5.8
66.8
67.9
8.6
10.2
0.0
15.6
2.7
15.2
192.7
18.4
211.1
The following areas were included in the Pre-Production Capital Cost estimate:
1. Open Pit Mine (open pit mine development, equipment fleet, pre-stripping/ pioneering and supporting
infrastructure and services);
2. Underground Mine (underground development, equipment fleet, paste backfill plant and supporting infrastructure
and services);
3. Process plant (gold-silver, zinc-gold-silver, and lead–gold-silver concentrates), conventional 1-1.2 Mtpa
concentrator and Flotation Tails Leach circuit with supporting plant infrastructure and services;
4. TSF;
5. On‐site infrastructure (earthworks, sitework, roads, water treatment and distribution, camp and other general
facilities);
6. Off‐site infrastructure;
7. Owners Costs including EPCM, spares, first fills, transport costs and import costs;
8.
9. Other Pre-production Costs (other operating costs prior to commercial production/ processing) ; and,
10. Contingency (applied at +15%).
Indirect costs;
13
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Total capital costs are US$133.7 million, not including US$18.4 million of capitalised mining costs. Total Pre-development
capital costs of US$152.1 million are summarised in Table 4. More complete details of pre-development capital costs are
provided in the Chapter 24 of the Scoping Study.
Operating Costs
The operating cost estimates in the Study are based on: contractor operated truck and excavator open pit mining; owner
operated underground mining via longitudinal SLOS with paste backfill; processing which includes gravity recovery,
conventional flotation and with Floatation Tail Leach (FTL); and, deposition of the tails not consumed in the paste backfill
process in a Tailing Storage Facility (TSF).
Operating cost estimates have generally been derived from first principles costs analysis prepared by external consultants,
rather than by benchmarking. These cost estimates include local labour rates derived from San Juan industry standards,
costs sourced by vendor/ supplier quotations both in Argentina and externally, and productivity rates that reflect the local
workforce and conditions. Unless otherwise stated in this ASX Release or the Annexure Scoping Study Report the
operating cost estimates have an expected accuracy range of ±15%.
The operating estimate is expressed in Q3 US$ and used USD/ARS exchange rate at the time the quotation was provided
for any in country costs provided in ARS. In practice, in Argentina, most quotes are generally provided in USD and
converted into ARS based on the prevailing USD/ARS. This includes diesel, equipment hire for both general and specialised
mining equipment, reagents and consumables. The exceptions are Government provided services such as grid power and
in-country labour. Generally, the rate of increase in the ARS price tracks the decline in the ARS/USD rate for power and
labour, however there is a 1-3 month lag in the repricing of ARS denominated costs. For any ARS denominated input costs,
such as grid power and labour, Challenger has used the 2022H2/2023H1 prices, as converting the current local ARS costs
into a USD denominated price at the prevailing ARS rate would artificially lower these input costs on a USD basis.
Underground Mining Costs
Table 5 provides a breakdown of the underground mining costs which were derived from a detailed first principles analysis
prepared by external underground mining consultants via a bottom up analysis. The mine operating cost estimate included
the costs associated with stope preparation, drilling, blasting, ground support, backfill, underground loading and hauling
and material transport to the primary crusher on surface, as well as support and ancillary equipment operations and
maintenance, power, direct labour, and mine operations supervision staff.
Table 5 – Underground Mining Costs
Category
Stoping
Slot Rises
Production Bogging
Trucking
Mine Auxiliary – Pumping
Mine Auxiliary – Ventilation
Mine Auxiliary – Backfill
Mine Auxiliary – Power
Mine Auxiliary – Labour
Mine Auxiliary – General
Mine Supervision
Total Underground Mining Cost
US$/t Processed Incremental
US$/t Processed Total
4.56
3.19
0.05
0.51
3.13
2.67
4.07
4.22
7.75
2.89
4.43
14.66
5.01
34.74
Process Costs
The process operating cost estimate accounts for the operating and maintenance costs associated with the process plant
operation, supporting services, infrastructure, and tailings filtering. Operating costs associated with the paste backfill plant
are included in the mine operating cost estimate.
Process plant operating costs have been estimated by Challenger’s consulting metallurgists from first principles, using
mechanical equipment specifications for estimation of power consumption, metallurgical test-work for reagent and grinding
media consumption estimates, preliminary labour schedules and salary build‐ups for process labour and maintenance
labour. The cost of spares was estimated as a fixed percentage of 5% of the mechanical equipment supply cost.
14
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Quotations for consumables such as reagents, lime, binder and grinding media were obtained from suppliers inclusive of
transportation to site. A unit power cost of US$0.07/ kWh was assumed with power consumption based on the results of
comminution testing and desired grind size. An allowance equal to the power usage of the comminution circuit was applied
to the rest of the process plant. Grid power is currently US$0.06/ kWh in San Juan.
The PMI feed has been divided into three separate categories based on gold and zinc grades. Each type of PMI has a slightly
different flow sheet:
1. Type A material - the lower grade PMI containing <1.5 g/t Au and <1.5% Zn (Type A) processed via bulk
flotation with cleaning stages.
2. Type B material - The higher grade PMI ≥1.5 g/t Au with <1.5% Zn (Type B) follows the same flow sheet as Ore
Type A with the addition of flotation tails leach (FTL).
3. Type C material - For the PMI containing ≥1.5% Zn (Type C) a stage of Pb-Cu rougher flotation and Zn flotation
is added.
Table 6: Process Operating Cost for PMI Type C
Type C (Au≥ 1.5 g/t Au, Zn≥ 1.5%) Sequential Flotation + FTL
Category
Cost
Operating Labor
Maintenance Labor
Power
Reagents and Consumables
Spares
Assays
Totals
Annual US$
Unit US$/t Ore
1,915,984
1,084,274
2,100,000
9,499,572
1,712,329
100,000
1.82
1.08
2.10
9.50
1.71
0.10
16,312,159
16.31
Table 7: Process Operating Cost for PMI Type B
Type B (Au≥ 1.5 g/t Au, Zn< 1.5%) Bulk Flotation + FTL
Category
Cost
Operating Labor
Maintenance Labor
Power
Reagents and Consumables
Spares
Assays
Totals
Annual US$
Unit US$/t Ore
1,915,984
1,084,274
2,100,000
5,306,407
1,712,329
100,000
1.82
1.08
2.10
5.31
1.71
0.10
12,118,994
12.12
Table 8: Process Operating Cost for PMI Type A
Type A (Au< 1.5 g/t Au, Zn< 1.5%) Bulk Flotation no FTL
Category
Cost
Operating Labor
Maintenance Labor
Power
Reagents and Consumables
Spares
Assays
Totals
Annual US$
Unit US$/t Ore
1,915,984
1,084,274
2,100,000
2,443,723
1,712,329
100,000
9,256,310
1.82
1.08
2.10
2.44
1.71
0.10
9.26
The plant has been designed to batch all three PMI types by bypassing the Cu-Pb and Zn flotation and/ or the FTL circuit.
An availability of 90% has been assumed for the flotation circuit. Given the slightly different flowsheets, the three types
15
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
of PMI have different reagent consumption which drives process costs. Annual and LOM operating costs for the process
and surface infrastructure for the three types of PMI are shown in Table 6, Table 7 and Table 8 (previous page).
Opportunities
The Company has identified several clear and material opportunities for improvement of the Scoping Study outcome which
are currently under evaluation. These include:
▪ A low-grade zinc concentration pathway, based on a recent flotation test on a composite grading 0.36% Zn which
produced a saleable Zn concentrate grading 48% Zn. Based on prior flotation test work, an assumption was used
in the Study that an economic zinc concentrate was only achievable from at a grade >1.5% Zn. The MRE contains
approximately 267,000t of zinc of which only 70,000t is accessed in the Scoping Study mine plan. The ability to
economically recover part of the additional 197,000t of zinc in the MRE could significantly enhance economics,
given the recovered portion of the ~70,000t of zinc generates US$132m revenue based on the Study forecasts.
▪ Further improvement to the underground stope optimisation, development sequence and production scheduling.
The underground stope optimisation was undertaken using an assumption of US$1700/oz gold. Additionally,
some improvements in production and development unit costs in the order of 10-20% have already been identified
in the intervening period since running the stope optimisation. These improvements in production and
development costs are yet to be incorporated into the optimisation, and are likely to result in additional stopes
being included in the mine plan. Additionally, optimisation included a Pseudoflow analysis on the underground
design to remove uneconomic areas that sit above the stope cut-off grade. Pseudoflow removed 832kt containing
72,000 oz AuEq3 from the underground mine plan that may be profitable at current spot prices and revised
operating costs.
▪ The improvement in underground optimisation includes reviewing the staging of development during the pre-
production period to optimise CAPEX whilst trading off against ensuring access to the highest value stopes in
early phases of the UG mine.
▪ Recovery of the 30-metre crown pillar design which has been left between the base of the open pits and the
underground workings. This crown pillar design contains approximately 15,000 Oz AuEq3. The study currently
assumes no recovery of this crown pillar, however additional geotechnical information may support the recovery
of this crown pillar.
Inclusion of a heap leaching option which provides a process path for a significant proportion (~50%) of the MRE
that was excluded in the high-grade/ low-tonnage SS production model. Preliminary column testing on a low-
grade composite yielded promising results. As a result of this, a panel of column tests were initiated to test the
three material types separately at a range of different head grades.
▪
▪ Reduction in open pit mining unit cost through owner-operator and bulk mining efficiencies. A unit cost of
US$3.00/ t was assumed for the Study, initially as a conservative estimate based on the predicted reduced scale of
the open pit operation, and later to account for contractor premiums. However, preliminary first-principles cost
modelling by the Company, and discussions with equipment vendors around collaboration and operating
partnerships, indicates that an owner operated unit cost around US$2.00/ t may be achievable at scale. This impact
of a reduced mining unit cost is even more pronounced in a high-volume mining scenario that incorporates a low-
grade heap leach. This cost estimate is supported by localised benchmarking at other owner-operator OP mines in
Argentina.
▪ Potential processing of the Au-Ag concentrate on site to produce gold and silver dore via high intensity leach. This
could remove costs associated with the transport and treatment (TC/RC) of the forecast LOM production of 412kt
of Au-Ag concentrate and improve payability.
On site upgrading of Au-Ag Concentrate to Dore
Subsequent to the Scoping Study the Company reported results from a metallurgical testwork program undertaken to
evaluate the opportunity to upgrade the Au-Ag concentrate produced in the Hualilan bulk flotation circuit into doré.
The process route for the Hualian Gold Project involves crushing, milling, gravity recovery of gold, conventional flotation,
and flotation tailings leach (FTL). This produces a high-grade Zn-Au-Ag concentrate, a high-grade Pb-Au-Ag concentrate,
gold-silver doré, and an Au-Ag concentrate.
The majority of the gold and silver produced at Hualilan is via the Au-Ag concentrate, which comprises the cleaner Au-Ag
concentrate combined with the gravity-recovered-gold (GRG) concentrate. This combined Au-Ag concentrate contains
approximately 81% of the forecast annual production of 116 koz Au and 65% of the annual 440 koz Ag. The Au-Ag
concentrate will likely be sold to off-takers in Asia, with forecast costs of US$150/t to transport the concentrate, and
concentrate Treatment and Refining charges (TC/RC's) of approximately US$100/t. Thus, the ability to produce gold-silver
doré bars onsite will remove the transport and TC/RC costs associated with the 412,000 t of Au-Ag concentrate produced
over the Scoping Study LOM, thereby significantly improving project economics. Additionally, the payability for doré
16
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
(99.5% Au and 97.5% Ag) compares favourably to the forecast payability of the Au-Ag concentrate (95% Au and 60%
Ag).
The Company has identified a low-cost and simple process option which would potentially allow for doré production on
site from the Au-Ag concentrate. This involves a fine grind of the Au-Ag concentrate, followed by an intensive cyanide
leach cycle to recover the Au and Ag, with the pregnant leach solution (PLS) containing the Au and Ag added to the existing
carbon-in-leach (CIL) circuit, which is required for the FTL process.
To test this potential process option, a representative sample of the Au-Ag concentrate was prepared from a combination
of Au-Ag cleaner concentrates which were produced during flotation test-work.
Two charges of this representative Au-Ag cleaner concentrate underwent an intensive leach at SGS Laboratories in
Lakefield. The first sample at the existing size of 40 µm P80 grind and the second at 16.7 µm P80 grind. The results are
outlined in Table 9 below. The recovery of 96% of the gold from the concentrate at 16.7-micron grind indicates an increase
in overall Au payability from 95% via the concentrate to 95.75% via the doré option.
Operating costs associated with the fine grind and the intensive leach cycle, including cyanide consumption of 30.7 kg
NaCN/t of concentrate processed, are anticipated to be less than US$100/t Au-Ag concentrate. This will result in a net cost
saving of at least US$150/t, in addition to the uplift in Au payability. Additional testwork, including a pre-oxidation stage,
is expected to further reduce the reagent consumption and associated costs of the intensive leach.
The results for Ag recovery remain pending, however any recovery above the 60% payability for Ag in the Au-Ag
concentrate provides additional upside. The gravity-recovered-gold concentrate will also be converted to doré on site, likely
via an Acacia reactor. The CAPEX and OPEX associated with this will be minor, considering the small amount (3.5 kt of
GRG concentrate) that will be processed annually.
Table 9 - Results Intensive Leach Testing Au-Ag Cleaner concentrate.
Next Steps
Next steps to add to the robustness of the project and provide a pathway for future development for the project include:
• Analysis of the results for the suite of Column Leach tests are currently underway, which will allow for an
assessment of the viability of Heap Leach as a potential processing pathway for the low-grade mineralisation.
• Completion of additional flotation testing on the potential low-grade zinc concentration pathway;
• Completion of additional flotation testing, including locked-cycle and variability test work, which will be required
to provide sufficient data for the PFS;
• Additional intensive-leach tests on the representative concentrate sample to optimise for grind size and reagent
consumption against Au-Ag recovery. This will allow the Company to maximise the improvement in projected
economics from the production of doré on site..
• Development of a detailed first-principles open pit mining cost model, in collaboration with equipment vendors,
to evaluate the potential owner operated bulk mining efficiencies;
• Completion of a suite of CIL test work (with dual-laboratory verification) to allow Au and Ag recoveries and
NACN consumption to be modelled for both the high-grade and low-grade mineralisation, thereby allowing for a
definitive evaluation of the CIL processing option;
• Update the first-principle cost models for the processing and general and administrative areas such that they can
be utilised to assess the cost impact of variable process throughputs;
• Update the processing cost model to be inclusive of heap leaching, should the Column Test results be positive;
• Complete geotechnical data gathering, including: additional core logging; collection of Point Load Test data from
existing drill core; gathering of televiewer data from existing drill holes; and, any drilling of additional
geotechnical test holes;
• Further optimisation of the open pit/ underground interface and which components of the orebody should be
included in each; and,
• Additional drilling of some of the drill targets identified in the Hualilan regional exploration programme.
17
Sample NameCN Test #Size P80Free CN*µNaCN, kg/tCaO, kg/tNaCN, kg/tCaO, kg/tmg/L24 h48 h72 hCut ACut BAverageCalc'dDirectComb Flot ConcCN174023.527.119.726.8692849192.51.761.771.7724.5Comb Flot ConcCN1816.733.612.430.712.45109586960.940.930.9422.8Reagent AdditionReagent ConsumptionAu Residue, g/tAu Head Grade, g/tAu Extraction, %
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
EL GUAYABO GOLD AND COLORADO V GOLD/COPPER PROJECT - ECUADOR
43-101 Technical Report
During the quarter the Company commissioned an Independent technical report on the Project done in accordance with the
National Instrument 43-101 which sets out the requirements for the preparation and content of a technical report in Canada.
This report will incorporate an updated Mineral Resource Estimate done in compliance with the 43-101 framework.
Rock-Saw Channel Sampling Program
The surface rock-saw Channel Sampling program has been designed to test for the extensions of mineralisation to surface
in the upper 200 metres of the GY-A anomaly which forms a steep hill.
The rock-saw sampling is completed using a rock saw to cut and recover a continuous channel measuring approximately
4cm x 4cm along any outcrop. The 4cm x 4cm sample weight averages 4.8 kg per metre, approximately the same as the
NQ sized drill core in the El Guayabo Project drill program. The samples are logged and submitted for assay with QAQC
samples (duplicates, blanks, and standards) using the same procedure as drill core. This program has been completed with
assays for the final 25% of the program pending.
Surface Mapping
During the quarter surface mapping continued north-east of the CV-A and CV-B anomalies on the Colorado V concession.
Mapping indicated the extension of alteration and breccia bodies along strike from CV-A (results include 528.7m at 0.5 g/t
AuEq2 - 0.3 g/t Au, 2.0 g/t Ag, 0.1 % Cu including 397.1m at 0.6 g/t AuEq2 - 0.3 g/t Au, 2.8 g/t Ag, 0.1% Cu) and CV-
B (results include 570.0m at 0.4 g/t AuEq2 - 0.2 g/t Au, 2.0 g/t Ag, 0.1% Cu including 306.0m at 0.5 g/t AuEq2 - 0.2
g/t Au, 2.3 g/t Ag, 0.1% Cu) and the tenement boundary with Lumina Golds Cangrejos deposit. .
Surface mapping in the vicinity of the CV-D and CV-E anomalies has indicated the presence of outcropping breccia which
appears consistent with the breccia's containing higher-grade mineralisation at GY-A and GY-B in the current MRE. This
breccia has been identified over approximately 200 square meters at surface with the interpreted steeply plunging breccia
body not validly tested by the three exploration holes drilled at CV-D and CV-E. This program remains ongoing.
KAROO BASIN - SOUTH AFRICA
The Group continues to pursue its application for shale gas exploration rights in South Africa. As previously reported, the
Department of Mineral Resources is progressing a new petroleum resources development bill, and the Minister reportedly
indicated during his address in the debate on the Presidential State of the Nation Address in June that the bill will soon
undergo public participation, as part of the cabinet and parliamentary approval processes.
MINERAL RESOURCE ESTIMATES
The Company has reported the following Mineral Resource Estimates.
Hualilan Project
Table 10 Hualilan Hold Project Mineral Resource Estimate (March 2023)
Ag
Zn
Pb
AuEq
AuEq
(g/t)
(%)
(%)
(g/t)
(Mozs)
5.1
7.3
9.0
12.4
6.0
0.38
0.06
0.43
0.06
0.89
0.05
1.1
0.4
0.07
0.06
1.3
1.4
2.5
2.8
1.4
1.9
0.44
0.22
0.24
2.8
Domain
Category Mt
US$1800 optimised shell
> 0.30 ppm AuEq
Indicated 45.5
Below US$1800 shell
>1.0ppm AuEq
Inferred
9.6
Indicated
2.7
Inferred
2.8
Total
60.6
Note: Some rounding errors may be present
Au
(g/t)
1.0
1.1
2.0
2.1
1.1
18
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
1 Gold Equivalent (AuEq) values - Requirements under the JORC Code
• Assumed commodity prices for the calculation of AuEq is Au US$1900 Oz, Ag US$24 Oz, Zn US$4,000/t, Pb US$2000/t
• Metallurgical recoveries are estimated to be Au (95%), Ag (91%), Zn (67%) Pb (58%) across all ore types (see JORC Table 1
Section 3 Metallurgical assumptions) based on metallurgical test work.
The formula used: AuEq (g/t) = Au (g/t) + [Ag (g/t) x 0.012106] + [Zn (%) x 0.46204] + [Pb (%) x 0.19961]
•
• CEL confirms that it is the Company’s opinion that all the elements included in the metal equivalents calculation have a reasonable
potential to be recovered and sold.
El Guayabo Project
Table 11: El Guayabo Interim MRE, June 2023
Domain
Category Mt
Au
(g/t)
Ag
(g/t)
Cu
(%)
Mo
(ppm)
AuEq
(g/t)
AuEq
(Mozs)
US$1800 optimised shell
> 0.3 g/t AuEq
Below US$1800 shell >0.4
g/t AuEq
Inferred
212.2
0.36
2.8
0.07
6.5
0.50
Inferred
56.5
0.46
1.8
0.07
7.5
0.59
Total
Inferred
268.7
0.38
2.6
0.07
7.2
0.52
3.4
1.1
4.5
Note: Some rounding errors may be present
2 Gold Equivalent (AuEq) values - Requirements under the JORC Code
Assumed commodity prices for the calculation of AuEq is Au US$1800 Oz, Ag US$22 Oz, Cu US$9,000/t, Mo US$44,080/t
•
• Metallurgical recoveries are estimated to be Au (85%), Ag (60%), Cu (85%) Mo (50%) across all ore types (see JORC Table 1 Section 3
•
•
Metallurgical assumptions) based on metallurgical test work.
The formula used: AuEq (g/t) = Au (g/t) + [Ag (g/t) x 0.012222] + [Cu (%) x 1.555] + [Mo (%) x 4.480026]
CEL confirms that it is the Company’s opinion that all the elements included in the metal equivalents calculation have a reasonable potential to
be recovered and sold.
ADDITIONAL INFORMATION
COMPETENT PERSON STATEMENT – EXPLORATION RESULTS AND MINERAL RESOURCES
The information that relates to sampling techniques and data, exploration results, geological interpretation and Mineral
Resource Estimate has been compiled Dr Stuart Munroe , BSc (Hons), PhD (Structural Geology), GDip (AppFin&Inv) who
is a full-time employee of the Company. Dr Munroe is a Member of the AusIMM. Dr Munroe has over 20 years’ experience
in the mining and metals industry and qualifies as a Competent Person as defined in the JORC Code (2012).
Dr Munroe has sufficient experience of relevance to the styles of mineralisation and the types of deposits under
consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint
Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results and Mineral Resources. Dr
Munroe consents to the inclusion in this report of the matters based on information in the form and context in which it
appears. The Australian Securities Exchange has not reviewed and does not accept responsibility for the accuracy or
adequacy of this release.
The Mineral Resource Estimate for the Hualilan Gold Project was first announced to the ASX on 1 June 2022 and updated
29 March 2023. The Mineral Resource Estimate for the El Guayabo Project was first announced to the ASX on 14 June
2023. The Company confirms it is not aware of any information or assumptions that materially impacts the information
included in that announcement and that the material assumptions and technical parameters underpinning the Mineral
Resource Estimate continue to apply and have not materially changed.
FORWARD LOOKING STATEMENTS
The announcement may contain certain forward-looking statements. Words ‘anticipate’, ‘believe’, ‘expect’, ‘forecast’,
‘estimate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘target’, ‘plan’, ‘potential’ and other similar expressions are intended
to identify forward-looking statements. Indication of, and guidance on, future costings, earnings and financial position and
performance are also forward-looking statements.
Such forward looking statements are not guarantees of future performance, and involve known and unknown risks,
uncertainties and other factors, many of which are beyond the control of Challenger Gold Ltd, its officers, employees,
agents and associates, which may cause actual results to differ materially from those expressed of implied in such forward-
looking statements. Actual results, performance, or outcomes may differ materially from any projections or forward-looking
statements or the assumptions on which those statements are based.
19
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
You should not place any undue reliance on forward-looking statements and neither. Challenger nor its directors, officers,
employees, servants or agents assume any responsibility to update such information. The stated Production Targets are
based on the Company’s current expectations of future results or events and should not be relied upon by investors when
making investment decisions. Further evaluation work and appropriate studies are required to establish sufficient
confidence that this target will be met.
Financial numbers, unless stated as final, are provisional and subject to change when final grades, weight and pricing are
agreed under the terms of the offtake agreement. Figures in this announcement may not sum due to rounding. All dollar
amounts in this report refer to Australian Dollar unless otherwise stated.
SCOPING STUDY
All references to the Scoping Study and its outcomes in this report relate to the announcement dated 8 November 2023
"Hualilan Gold Project Scoping Study". Please refer to that announcement for full details and supporting information.
EVENTS SUBSEQUENT TO BALANCE DATE
Subsequent to balance date the Company raised $5,642,069 through the issue of 66,377,283 ordinary shares and 66,377,283
options with an expiry date of 12 months from the closing date and an exercise price of $0.14, under the Company’s existing
7.1 and 7.1A placement capacity.
RESULTS OF OPERATIONS
The net profit after tax for the financial year ended 31 December 2023 for the Group was $53,861,800 (6 months period to
31 December 2022: $24,684,970). Significant items contributing to the financial year include the following: gain on
convertible debenture of $5,817,504, gain on net monetary position of $48,788,194, gain on blue chip swaps of $3,174,657
and finance expenses of $4,187,386.
DIVIDENDS
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend
to the date of this report.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the Group during the period and up to the date of this report,
other than as set out in this report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Likely developments in the operations of the Group are set out in the above review of operations in this annual financial
report. Any future prospects are dependent upon the results of future exploration and evaluation.
BUSINESS RISKS
Financing risks
Additional funding may be required in the event the costs exceed the Group’s estimates and to effectively implement its
business and operation plans in the future to take advantage of the opportunities for acquisitions or other business
opportunities and to meet any unanticipated liabilities or expenses which the Group may incur may depend in part on its
ability to raise additional funds.
The Group may seek to raise further funds through equity or debt financing or other means. Failure to obtain sufficient
financing for the Group’s activities and future projects may result in delay and indefinite postponement of development.
There can be no assurance that additional finance will be available when needed or, if available, the terms of the
financing might not be favourable to the Group and might involve substantial dilution to Shareholders.
Governmental policies and legislation
Any adverse changes in governmental policies or legislation affecting exploration and mining activities (directly or
indirectly) can have a positive or negative impact on the Group.
Argentina is currently experiencing hyperinflation climbing above an annualised rate of 100% in 2023. This makes
forecasting of budget and foreign exchange rates difficult, and such forecasts are subject to considerable uncertainty.
The Group mitigates this risk through USD and reducing exposure to costs in the local currency.
The inflation rate has had an impact on the intercompany loans in Argentina. Exploration expenses recorded in Australian
dollars in the financial statements have reduced in line with Argentinian foreign currency weakness on conversion. This
has had a major effect on foreign currency reserves in the Equity component of the balance sheet.
20
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Exploration risks
The future exploration activities of the Group may be affected by a range of factors including activities of parties with
overlapping tenure, geological conditions, limitations on activities due to seasonal weather patterns or adverse weather
conditions, unanticipated operational and technical difficulties, difficulties in commissioning and operating plant and
equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction
costs, industrial and environmental accidents, industrial disputes, unexpected shortages and increases in the costs of
consumables, spare parts, plant, equipment and staff, native title process, changing government regulations and many
other factors beyond the control of the Group.
Possible future development of mining operations at the Group’s projects is dependent on a number of factors including,
but not limited to, the acquisition and/or delineation of economically recoverable mineralisation, favourable geological
conditions, receiving the necessary approvals from all relevant authorities and parties, seasonal weather patterns,
unanticipated technical and operational difficulties encountered in extraction and production activities, mechanical failure
of operating plant and equipment, shortages or increases in the price of consumables, spare parts and plant and equipment,
cost overruns, access to the required level of funding and contracting risk from third parties providing essential services.
The Group’s mineral properties are at various stages of exploration and development. There can be no assurance that
exploration of the mineral properties, or any other tenements that may be acquired in the future, will result in the discovery
of an economic ore deposit or JORC Code resource classification. Even if an apparently viable deposit is identified, there
is no guarantee that it can be economically exploited.
ENVIRONMENTAL REGULATIONS
The Group carries or carried out operations that are subject to environmental regulations under legislation in Ecuador and
Argentina. The Group has formal procedures in place to ensure regulations are adhered to. The Group is not aware of any
breaches in relation to environmental matters.
REMUNERATION REPORT (Audited)
REMUNERATION POLICY
The remuneration policy of the Group has been designed to align Director objectives with shareholder and business
objectives by providing a fixed remuneration component that is assessed on an annual basis in line with market rates. The
Board of Challenger Gold believes the remuneration policy to be appropriate and effective in its ability to attract and retain
the best Directors to run and manage the Group, as well as create goal congruence between directors and shareholders. The
remuneration policy, setting the terms and conditions for executive and non-executive directors and other senior staff
members, was developed and approved by the Board.
The Board of Directors is responsible for determining and reviewing compensation arrangements for the executive team.
The Board will assess the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by
reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit
from the retention of a high-quality Board and executive team.
The Board’s policy for determining the nature and amount of remuneration for board members and senior executives is as
follows:
In determining competitive remuneration rates, the Board considers local and international trends among comparative
companies and the industry generally so that Executive Directors and Senior Executives remuneration is in line with market
practice and is reasonable in the context of Australian executive reward practices. All Executive Directors and Senior
Executives receive a base salary (which is based on factors such as length of service and experience), superannuation (where
applicable), and may be issued as options or performance shares from time to time, including to non-executive directors.
The Group is currently an exploration entity, and therefore speculative in terms of performance. Consistent with attracting
and retaining talented executives, Executive Directors and Senior Executives are paid market rates associated with
individuals in similar positions within the same industry. Options and other performance incentives continue to be issued
particularly if the Group moves from exploration towards development and becoming a producing entity and key
performance indicators such as market capitalisation and production and reserves growth can be used as measurements for
assessing executive performance.
21
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Options and other performance rights are valued using the Black-Scholes methodology and Monte Carlo Simulation, which
takes account of factors such as the option exercise price, the current level and volatility of the underlying share price and
the time to maturity of the option. Although a value is ascribed and included in total remuneration, it should be noted that
the Executive Directors and Senior Executives have not received this amount and the option or performance right may have
no actual financial value unless the share price achieves the option exercise price or conditions associated with the
performance rights met.
The Board policy is to remunerate non-executive Directors at market rates for comparable companies for time, commitment
and responsibilities. The Board determines payments to the non-executive Directors and reviews their remuneration
annually, based on market practice, duties and accountability. The maximum aggregate amount of fees that can be paid to
non-executive Directors is subject to approval by shareholders at the Annual General Meeting. Non-executive Directors
may receive performance shares or options, and receive salary in shares in lieu of cash. Directors are encouraged to hold
shares in the Group.
In accordance with the Company’s constitution, the aggregate fee remuneration for Non-Executive Directors has been set
at an amount not to exceed $500,000 per annum. This amount may only be increased with the approval of Shareholders at
a general meeting.
The Group may engage remuneration consultants from time to time. The Group will ensure any recommendation from a
remuneration consultant will be made free from undue influence from any members of Key Management Personnel. The
Group did not engage remuneration consultants for the financial year ended 31 December 2023.
KEY MANAGEMENT PERSONNEL
(a) Details of Key Management Personnel
Sergio Rotondo– Executive Chairman
Kris Knauer – Managing Director
Sonia Delgado – Executive Director, appointed 28 November 2023
Fletcher Quinn – Non-Executive Director
Pini Althaus – Non-Executive Director, appointed 8 February 2023
Brett Hackett – Non-Executive Director, appointed 4 May 2023
Scott Funston – resigned 4 May 2023 as Executive Director, Company Secretary and Chief Financial Officer for the full year
(b) Compensation of Key Management Personnel
Remuneration of Key Management Personnel is set out below.
The value of remuneration received or receivable by Key Management Personnel for the financial year ended 31 December
2023 is as follows:
31 December
2023
Primary
Equity
Compen-
sation
Post-employment
Perform-
ance
Related
%
Base
Salary
and Fees
$
324,036
295,000
15,902
60,000
-
-
245,000
939,938
Directors
Sergio Rotondo
Kris Knauer
Sonia Delgadoiii
Fletcher Quinn
Pini Althausi
Brett Hackettii
Executive
Scott Funstoniv
Total
Bonus
and Non
Monetary
Benefits
$
Value of
Performance
Rights
Superannuation
Contributionsv
Termin-
ation
Benefits
TOTAL
$
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
59,371
44,945
350,000
454,316
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
324,036
295,000
15,902
60,000
59,371
44,945
595,000
1,394,254
-
-
-
-
100.00
-
58.82
I Appointed on 8 February 2023 ii Appointed 4 May 2023, the value of remuneration is determined based on estimated number of shares to be
granted using share price at 31 December 2023 amortised over the vesting period iii Appointed 28 November 2023 iv Resigned as a Director 4
May 2023v No superannuation contributions as salary and fees are paid to a controlled company
22
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
6 month period
ended 31
December 2022
Primary
Equity
Compen-
sation
Post-employment
Perform-
ance
Related
%
Base
Salary
and
Fees
$
30,000
147,500
107,712
122,500
407,712
Bonus
and Non
Monetary
Benefits
$
-
-
-
-
-
Directors
Fletcher Quinn
Kris Knauer
Sergio Rotondo
Scott Funston
Total
Value of
Performance
Rights
Superannuation
Contributions
TOTAL
Termin-
ation
Benefits
$
$
$
$
-
-
-
48,949
48,949
-
-
-
-
-
-
-
-
-
30,000
147,500
107,712
171,449
456,661
-
-
-
28.6%
(c) Compensation Options
No options were granted to Key Management Personnel of the Group during the financial year ended 31 December 2023.
(d) Share, Option and Performance Rights holdings
Options and Performance Rights may be issued to Key Management Personnel as part of their remuneration to increase
goal congruence between Executives, Executive Directors, Non-Executive Directors and Shareholders.
During the 2020 financial year Mr Funston received 5,000,000 Class A Performance Rights and 5,000,000 Class B
Performance Rights following shareholder approval on 28 November 2019.
Class A Performance Rights have the following vesting conditions:
A JORC Compliant Mineral Resource Estimate of at least Inferred category on either Project of the following:
i.
ii.
iii.
a minimum 500,000 ounces of gold (AU) or Gold Equivalent (in accordance with clause 50 of the JORC Code) at
a minimum grade of 6 grams per tonne Gold Equivalent; or
a minimum 1,500,000 ounces of gold (AU) or Gold Equivalent (in accordance with clause 50 of the JORC Code)
at a minimum grade of 2.0 grams per tonne Gold Equivalent; or
a minimum 3,000,000 ounces of gold (AU) or Gold Equivalent (in accordance with clause 50 of the JORC Code)
at a minimum grade of 1.0 grams per tonne Gold Equivalent.
Class B Performance Rights will vest on the completion and announcement by Challenger (subject to the provision of
information allowable at the time of completion) of a positive Scoping Study (as defined in the JORC Code) on either the
Hualilan Project or the El Guayabo Project by an independent third-party expert which evidences an internal rate of return
of US Ten Year Bond Rate plus 10% (using publicly available industry assumptions, including deliverable spot commodity
mineral prices, which are independently verifiable) provided that the total cumulative EBITDA over the project life is over
US$50m.
All Performance Rights vested during the financial year ended 31 December 2023.
During the financial year ended 31 December 2023, Mr Pini Althaus was issued 3,000,000 Performance Rights that received
shareholder approval on 31 May 2023.
The issue of Incentive Performance Rights to Mr Althaus will align the interests of Mr Althaus with those of Shareholders
through the assignment of long term incentives attached to milestones for the Company, and considered reasonable and
appropriate method to provide cost effective remuneration as the non-cash form of this benefit will allow the Company to
spend a greater proportion of its cash reserves on its operations than it would if alternative cash forms of remuneration were
given to Mr Althaus.
23
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
The Performance Rights have the following milestones:
(a)
(b)
(c)
Milestone 1: one (1) million performance rights will convert into shares upon the Company’s share
price trading on ASX at a volume weighted average price (VWAP) at or above a price of A$0.30 per
share for 20 consecutive trading days on which the Company’s shares have actually traded or before
8 February 2024.
Milestone 2: one (1) million performance rights will convert into shares upon the Company’s share
price trading on ASX at a VWAP at or above a price of A$0.40 per share for 20 consecutive trading
days on which the Company’s shares have actually traded or before 8 February 2025.
Milestone 3: one (1) million performance rights will convert into shares the Company’s share price
trading on ASX at a VWAP at or above a price of A$0.40 per share for 20 consecutive trading days
on which the Company’s shares have actually traded or before 8 February 2026.
1,000,000 Performance Rights lapsed (Milestone 1) on 8 February 2024 because the milestone had not been satisfied.
(e) Employment Contracts of Key Management Personnel
The Managing Director Mr Kris Knauer entered into an agreement on 5 July 2021 pursuant to which Mr Knauer was
continued as Managing Director of the Group. The material terms and conditions of the agreement are set out below:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(Commencement Date): 5 July 2021.
(Term): Two (2) years from the Commencement Date or until validly terminated. The agreement has
been extended on the same terms until a new agreement is concluded.
(Remuneration): Mr Knauer receives a base salary of $295,000 per annum.
(Incentives): Mr Knauer is eligible to receive Securities under the Group’s Incentive Option Plan and
Performance Rights Plan. No Securities were granted under the Group’s Incentive Option Plan and
Performance Rights Plan during the year ended 31 December 2023 to Mr Knauer.
(Accrued Entitlements): All entitlements that have accrued to Mr Knauer prior to the date of this
agreement will be honoured by the Group.
(Termination): The Group may terminate the agreement by providing six (6) months’ written notice.
(Expenses): Mr Knauer is entitled to reimbursement for all reasonable travelling expenses,
accommodation and general expenses incurred in the performance of his duties under the agreement.
Executive Chairman Mr Sergio Rotondo is paid an annual salary of $210,000 USD and is an Argentinian citizen.
(a)
(b)
(c)
Mr Rotondo is eligible to receive Securities under the Group’s Incentive Option Plan and Performance
Rights Plan. No Securities were granted under the Group’s Incentive Option Plan and Performance
Rights Plan during the financial year ended 31 December 2023 to Mr Rotondo.
(Termination): The agreement may be terminated by either party at any time.
(Expenses): Mr Rotondo is entitled to reimbursement for all reasonable travelling expenses,
accommodation and general expenses incurred in the performance of his duties under the agreement.
Executive Director Dr Sonia Delgado is paid an annual salary of $120,000 USD and is an Argentinian citizen.
(a)
(b)
(c)
Dr Delgado is eligible to receive Securities under the Group’s Incentive Option Plan and Performance
Rights Plan. No Securities were granted under the Group’s Incentive Option Plan and Performance
Rights Plan during the financial year ended 31 December 2023 to Dr Delgado.
(Termination): The agreement may be terminated by either party at any time.
(Expenses): Dr Delgado is entitled to reimbursement for all reasonable travelling expenses,
accommodation and general expenses incurred in the performance of her duties under the agreement.
Chief Financial Officer and Company Secretary, Mr Scott Funston entered into an agreement on 5 July 2021, pursuant to
which Mr Funston commenced as Executive Director, Company Secretary and Chief Financial Officer of the Group. He
subsequently resigned as Executive Director on the 4 May 2023 however continued as Company Secretary and Chief
Financial Officer. His resignation as Executive Director has no impact on any benefits stated in the below agreement
The material terms and conditions of the agreement are set out below:
(d)
(Position): Company Secretary, Chief Financial Officer and Finance Director
24
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(Commencement Date): 5 July 2021.
(Term): Two (2) years from the Commencement Date or until validly terminated. The agreement has
been extended on the same terms until a new agreement is concluded.
(Remuneration): Mr Funston receives a base salary of $245,000 per annum.
(Incentives): Mr Funston is eligible to receive Securities under the Group’s Incentive Option Plan and
Performance Rights Plan. No Securities were granted under the Group’s Incentive Option Plan and
Performance Rights Plan during the year ended 31 December 2023 to Mr Funston.
(Accrued Entitlements): All entitlements that have accrued to Mr Funston prior to the date of this
agreement will be honoured by the Group.
(Termination): The agreement may be terminated by either party by providing three (3) months written
notice.
(Expenses): Mr Funston is entitled to reimbursement for all reasonable travelling expenses,
accommodation and general expenses incurred in the performance of his duties under the agreement.
(f)
Shares held by Key Management Personnel
Directors
Sergio Rotondo
Kris Knauer(a)
Sonia Delgadoiii
Fletcher Quinn
Pini Althausi
Brett Hackettii
Executive
Scott Funstoniv
Balance
at 31.12.22
Shares
Purchased
Net Change
Other
Balance
at 31.12.23
89,000,000
52,278,666
-
24,078,637
-
-
-
-
-
3,120,795
-
-
-
37,000,000
-
-
17,500,000
-
89,000,000
89,278,666
-
27,199,432
17,500,000
-
7,160,417
172,517,720
-
3,120,795
-
54,500,000
7,160,417
230,138,515
I Appointed on 8 February 2023, net change other relates to vested performance shares held pre director appointment ii Appointed 4 May 2023
iii Appointed 28 November 2023 iv Resigned as a Director 4 May 2023
(a) Mr Knauer was issued consideration performance shares in 2019 as part of the Group’s acquisition of AEP
Corporation Pty Ltd disclosed in the Prospectus document dated 16 May 2019. They consist of 18,500,000
Performance A Shares and 18,500,000 Performance B Shares. The Performance Shares vested during the
financial year ended 31 December 2023 and accordingly 37,000,000 fully paid ordinary shares were issued to
Mr Knauer. These consideration performance shares were not issued for Mr Knauer’s remuneration. Details of
Performance Shares are disclosed in Note 14 of the financial report.
No shares were issued by the Group since the financial year ended 31 December 2023 as a result of the exercise of an
option or conversion of a performance right.
(g) Options held by Key Management Personnel
There are no options held by Key Management Personnel.
(h) Performance Shares held by Key Management Personnel
Balance
at
31.12.2022
Received
as
Remuneration
Performance
Shares
Expired
Net Change
Other
Balance
at
31.12.23
Total
Vested
Total
Exercisable
Directors
Sergio Rotondo
Kris Knauer(a)
Sonia Delgadoiii
Fletcher Quinn
Pini Althausi
Brett Hackettii
Executive
Scott Funstoniv
-
37,000,000
-
-
-
-
-
37,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(37,000,000)
-
-
-
-
-
(37,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
I Appointed on 8 February 2023 ii Appointed 4 May 2023 iii Appointed 28 November 2023 iv Resigned as a Director 4 May 2023
25
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
(i) Performance Rights held by Key Management Personnel
Balance
at
31.12.22
Received
as
Remuneration
Performance
Shares
Expired
Net
Change
Other
Balance
at
31.12.23
Total
Vested
Total
Exercisable
Directors
Sergio Rotondo
Kris Knauer(a)
Sonia Delgadoiii
Fletcher Quinn
Pini Althausi
Brett Hackettii
Executive
Scott Funstoniv
-
-
-
-
-
-
-
-
-
-
3,000,000(a)
-
10,000,000(a)
10,000,000
-
3,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
10,000,000
13,000,000
10,000,000
10,000,000
10,000,000
10,000,000
I Appointed on 8 February 2023 ii Appointed 4 May 2023 iii Appointed 28 November 2023 iv Resigned as a Director 4 May 2023
(a) Please refer to (d) Compensation of Key Management Personnel, above for details of performance rights issued to Mr Funston during
the 2020 financial year and Mr. Althaus. The performance rights issued to Mr. Funston have vested but remain unexercised.
(j) Other Transactions with Key Management Personnel
Mr Quinn controls Seco Resources Pty Ltd (“Seco”). Seco has provided his services as Chairman to a value of $60,000 (6 months
ended 31 December 2022: $30,000) to Challenger during the period on normal commercial terms. This amount is included in the
Remuneration Report section of the Directors’ Report. $5,000 (6 months ended 31 December 2022: $5,000) was outstanding at
period end.
Mr Knauer controls Greenfield Securities Pty Ltd (“Greenfield”). Greenfield has provided his services as Managing Director and
CEO to a value of $295,000 (6 months ended 31 December 2022: $147,500) to Challenger during the period on normal commercial
terms. This amount is included in the Remuneration Report section of the Directors’ Report. $24,583 (6 months ended 31
December 2022: $24,583) was outstanding at period end.
Mr Funston controls Resourceful International Consulting Pty Ltd (“Resourceful”). Resourceful has provided his services as
Executive Director, Company Secretary and CFO to a value of $245,000 (6 months ended 31 December 2022: $122,500) to
Challenger during the period on normal commercial terms. This amount is included in the Remuneration Report section of the
Directors Report. $20,417 (6 months ended 31 December 2022: $20,417) was outstanding at period end.
(k) Amounts owing to Key Management Personnel
A total of $50,000 was outstanding to Key Management Personnel as at 31 December 2023 (31 December 2022: $50,000), as
noted above.
END OF REMUNERATION REPORT
OPTIONS
At the date of this report, 10,000,000 unlisted options over new ordinary shares in the Group were on issue:
Type
Date of Expiry
Exercise
Price
Number under
Option
Unlisted
14 April 2025
$0.45
10,000,000
No ordinary shares have been issued during or since the end of the period and up to the date of this report upon the exercise
of options.
DEBENTURES
At the date of this report, convertible debentures with a principal amount of USD $15 million can be converted into shares
at a share price of $0.25 per share expiring on the 12 September 2026.
26
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
PERFORMANCE SHARES
At the date of this report, there are no Performance Shares over new ordinary shares in the Group were on issue. (31
December 2022: 120,000,000 Performance Shares)
All Performance Shares vested during the financial year ended 31 December 2023 and accordingly 120,000,000 fully paid
ordinary shares were issued.
PERFORMANCE RIGHTS
At the date of this report, 16,000,000 Performance Rights over new ordinary shares in the Group were on issue:
Type
Class A
Class B
Number
8,000,000
8,000,000
These Performance Rights vested during the financial year ended 31 December 2023. No ordinary shares were issued upon
the vesting of performance rights during or since the end of the financial year ended 31 December 2023, as the rights have
not been exercised.
INCENTIVE PERFORMANCE RIGHTS
At the date of this report, 27,272,427 Incentive Performance Rights over new ordinary shares in the Group were on issue:
Type
Number
Incentive Performance Rights(a)
Incentive Performance Rights(a)
Incentive Performance Rights (b)
Incentive Performance Rights (c)
267,027
8,505,400
16,500,000
2,000,000
(a)Incentive Performance Rights had the vesting condition that the holder must remain employed or engaged by the Group
and are fully vested.
(b) During the financial year ended 31 December 2023, 19,000,000 Performance Rights were issued to an employee and
will convert into ordinary shares as follows:
Number of Performance Rights
2,500,000
2,500,000
2,000,000
2,000,000
5,000,000
5,000,000
Milestones
Upon the successful completion of a scoping study that leads to an
announcement that the Hualilan Project will progress to a Pre-feasibility study
(PFS).
Upon the successful completion of a PFS for the Hualilan Project that leads to
an announcement that the Hualilan Project will progress to either a bankable
feasibility study (BFS) or a definitive feasibility study (DFS).
Upon the successful completion of a BFS or DFS that leads to an announcement
that the Hualilan Project will progress to construction.
Upon the commissioning of a processing plant for the Hualilan Project.
Upon the announcement of a mineral resource estimate for the El Guayabo
Project of not less than 20 million ounces of gold equivalent.
Upon the successful completion of either a preliminary economic assessment or
scoping study at the El Guayabo Project demonstrating total production of at
least 10 million ounces of Gold Equivalent.
2,500,000 ordinary shares were issued upon the vesting of performance rights during the financial year ended 31 December
2023. No ordinary shares were issued upon the vesting of performance rights since the end of the period ended 31 December
2023.
27
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
(c) During the period, 3,000,000 Performance Rights were issued to Pini Althaus, a member of the KMP, and will convert
into ordinary shares as follows:
Number of Performance Rights
1,000,000
1,000,000
1,000,000
Milestones
The Company’s share price trading on ASX at a volume weighted average price
(VWAP) at or above a price of A$0.30 per share for 20 consecutive trading days
on which the Company’s shares have actually traded or before 8 February 2024.
The Company’s share price trading on ASX at a VWAP at or above a price of
A$0.40 per share for 20 consecutive trading days on which the Company’s
shares have actually traded or before 8 February 2025.
The Company’s share price trading on ASX at a VWAP at or above a price of
A$0.40 per share for 20 consecutive trading days on which the Company’s
shares have actually traded or before 8 February 2026.
1,000,000 Performance Rights lapsed on 8 February 2024 because the milestone had not been satisfied.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001, every officer, auditor or
agent of the Group shall be indemnified out of the property of the Group against any liability incurred by them in their
capacity as an officer, auditor or agent of the Group or any related corporation in respect of any act or omission whatsoever
and howsoever occurring or in defending any proceedings, whether civil or criminal. The Group paid insurance premiums
in respect of Directors’ and Officers’ Liability Insurance contracts for current officers of the Group, including officers of
the Group’s controlled entities. The liabilities insured are damages and legal costs that may be incurred in defending civil
or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group. The
total amount of insurance premiums paid has not been disclosed due to confidentiality reasons.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Group has agreed to indemnify its auditors, Ernst & Young Australia, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young Australia during or since the period.
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to
which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those
proceedings. The Group was not a party to any such proceedings during the financial year ended 31 December 2023.
AUDITOR’S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, Ernst and Young, to provide the Directors of the Company
with an independence declaration in relation to the audit of the financial report.
The lead auditor’s independence declaration is set out on page 29 and forms part of the Directors’ Report for the financial
year ended 31 December 2023.
NON-AUDIT SERVICES
Ernst and Young did not provide any non-audit services during the financial year ended 31 December 2023.
This report is made in accordance with a resolution of the Directors.
Kris Knauer
Managing Director
28 March 2024
28
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Challenger Gold
Limited
As lead auditor for the audit of the financial report of Challenger Gold Limited for the financial year
ended 31 December 2023, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Challenger Gold Limited and the entities it controlled during the
financial year.
Ernst & Young
V L Hoang
Partner
28 March 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
29
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the financial year ended 31 December 2023
Consolidated
12 months ended
31 December
Consolidated
6 months ended
31 December
Note
2023
$
2022
$
Other income
2
9,622,062
11,307,082
Gain on net monetary position
1(d)
48,788,194
19,333,616
Accounting and audit fees
Consultants’ and directors’ fees
Legal and compliance
Investor relations, conferences, and corporate advice
Employee expenses
Travel expenses
Public company and administration expenses
Share-based payments
Depreciation
Finance costs
Other
163,857
1,145,458
101,887
319,856
121,296
247,896
951,467
860,205
174,996
4,187,386
96,840
17
252,634
516,912
201,873
554,848
83,688
225,653
596,181
252,920
69,275
1,136,618
102,132
Profit before income tax
50,039,112
26,647,964
Income tax benefit (expense)
3
3,822,688
(1,962,994)
Net profit for the period
53,861,800
24,684,970
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Income tax on other comprehensive income
(86,702,116)
-
(20,721,267)
-
Other comprehensive loss for the period
(86,702,116)
(20,721,267)
Total comprehensive (loss) / income for the period
(32,840,316)
3,963,703
Basic earnings per share
Diluted earnings per share
20
20
4.70
4.60
2.38
2.36
The accompanying notes form part of these financial statements.
30
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
CURRENT ASSETS
Cash and cash equivalents
Other receivables
Prepayments
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Other receivables
Deferred exploration and evaluation expenditure
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Interest bearing liabilities
Derivative liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liabilities
Interest bearing liabilities
TOTAL NON-CURRENT LIABILITIES
Note
4
5
6
5
7
8
9
11
11
10
3
11
As at 31
December
2023
$
4,345,983
177,770
546,993
As at 31
December
2022
$
15,426,824
181,300
733,525
5,070,746
16,341,649
2,120,518
138,714,424
567,522
7,970,637
154,145,647
870,053
141,402,464
162,986,337
146,473,210
179,327,986
1,257,516
14,285,517
1,038,143
112,480
16,693,656
2,323,928
46,065
2,369,993
1,948,499
12,228,566
6,855,647
103,133
21,135,845
8,695,550
259,309
8,954,859
TOTAL LIABILITIES
19,063,649
30,090,704
NET ASSETS
EQUITY
Issued capital
Reserves
Retained profits
TOTAL EQUITY
127,409,561
149,237,282
12
13
134,013,483
(106,624,952)
100,021,030
123,620,259
(20,542,207)
46,159,230
127,409,561
149,237,282
The accompanying notes form part of these financial statements.
31
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Balance at 1 January 2023
Profit for the year
Other comprehensive loss
Total comprehensive income/(loss) for the
year
Issue of shares in lieu of finance costs
Issue of shares in lieu of fees
Issue of shares for cash
Share based payments
Exercise of employee rights
Share issue costs
Balance at 31 December 2023
Balance at 1 July 2022
Profit for the period
Other comprehensive loss
Total comprehensive income/(loss) for the
period
Issue of shares in lieu of finance costs
Issue of shares in lieu of fees
Issue of shares for cash
Share based payments
Share issue costs
Balance at 31 December 2022
123,620,259
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 December 2023
Issued
Capital
$
123,620,259
-
-
Retained
Profits
$
46,159,230
53,861,800
-
Share Based Payment
Reserve
$
4,081,363
-
-
-
53,861,800
445,763
318,017
10,000,000
106,569
207,500
(684,625)
-
-
-
-
-
-
-
-
-
-
619,371
-
-
Foreign Exchange
Reserves
$
(24,624,354)
(86,702,116)
(86,702,116)
-
-
-
-
-
-
134,013,483
100,021,030
4,700,734
(111,326,470)
120,378,045
-
-
-
109,375
716,345
2,600,000
-
(183,506)
21,474,260
24,684,970
-
24,684,970
-
-
-
-
-
46,159,230
3,828,443
(3,903,087)
-
-
-
-
-
-
252,920
-
4,081,363
-
(20,721,267)
(20,721,267)
-
-
-
-
-
(24,624,354)
The accompanying notes form part of these financial statements.
32
Option Reserves
$
784
-
-
-
-
-
-
-
-
-
784
784
-
-
-
-
-
-
-
Total
$
149,237,282
53,861,800
(86,702,116)
(32,840,316)
445,763
318,017
10,000,000
725,940
207,500
(684,625)
127,409,561
141,778,445
24,684,970
(20,721,267)
3,963,703
109,375
716,345
2,600,000
252,920
(183,506)
784
149,237,282
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 December 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Consolidated
12 months ended
31 December
2023
$
Consolidated
6 months ended
31 December
2022
$
(5,366,145)
109,112
(2,756,341)
24,426
NET CASH USED IN OPERATING ACTIVITIES
4
(5,257,033)
(2,731,915)
CASH FLOWS FROM INVESTING ACTIVITIES
Receipts from Blue Chip Swaps transactions
Expenditure on exploration
Expenditure on property, plant, and equipment
4,942,590
(20,075,104)
(54,736)
6,776,715
(22,451,317)
(113,241)
NET CASH USED IN INVESTING ACTIVITIES
(15,187,250)
(15,787,843)
CASH FLOWS FROM FINANCING ACTIVITIES
Loans received
Repayment of loans
Proceeds from share issue
Costs of loan facility
Share issue costs
11
-
(17,055)
10,000,000
-
(684,625)
21,835,078
(1,220,000)
2,600,000
(841)
(199,107)
NET CASH PROVIDED BY FINANCING ACTIVITIES
9,298,320
23,015,130
NET (DECREASE)/ INCREASE IN CASH AND CASH
EQUIVALENTS
(11,145,963)
4,495,372
Cash and cash equivalents at beginning of the period
15,426,824
10,415,522
Effect of movements in exchange rates on cash held
65,122
515,930
CASH AND CASH EQUIVALENTS AT END OF THE
PERIOD
4
4,345,983
15,426,824
The accompanying notes form part of these financial statements.
33
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
1.
STATEMENT OF MATERIAL ACCOUNTING POLICY INFORMATION
(a)
Basis of preparation
Challenger Gold Limited is a for-profit listed public company limited by shares that is incorporated and domiciled in
Australia. The Group has operations in Ecuador and Argentina and its principal activities are exploration for gold
and copper.
The financial report is a general purpose financial report, which has been prepared in accordance with the
Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law.
The financial information has been prepared on the accruals basis and is based on historical costs with the exception
of any financial instruments measured at fair value. Cost is based on the fair values of the consideration given in
exchange for assets.
The financial report is presented in Australian dollars.
The financial report was authorised for issue on the date of the signing of the Directors’ Declaration.
The financial report complies with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB).
Change in Financial Year End Date
In November 2022, the Company obtained approval from the Australian Securities and Investments Commission
(“ASIC”) to change its financial year end date from 30 June to 31 December. As a result, the current financial year
of the Group is the 12 month period 1 January 2023 to 31 December 2023.
As such, the comparatives presented in the financial report are not entirely comparable as the amounts that are 6
months from 1 July 2022 to 31 December 2022, being the most recent audited comparative period.
The following is a summary of the material accounting policy information adopted by the Group in the preparation
of the financial report. The accounting policies have been consistently applied unless otherwise stated.
(b)
Adoption of new and revised standards
Standards and Interpretations applicable to 31 December 2023
In the financial year ended 31 December 2023, the Directors have adopted all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group and effective for the current annual reporting
period. As a result of this review the Group has not identified any material changes that need to be applied.
Standards and Interpretations issued and not yet adopted
The Directors are in the process of reviewing all Standards and Interpretations in issue not yet adopted for the
financial year ended 31 December 2023. Based on the review to date, the Directors do not expect that there is material
impact of the new and revised Standards and Interpretations on the Group and, therefore, no material change will be
expected to the Group’s accounting policies.
(c)
Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
The Group has a net current liability position of $ 11,622,910 at 31 December 2023 (31 December 2022: net current
liability position of $4,794,196) and a net cash outflow from operating and investing activities of $5,257,033 and
$15,187,250 respectively for the 12 month period ended 31 December 2023 (6 month period to 31 December 2022:
$2,731,915 and $15,787,843 respectively). The net current liability position as at 31 December 2023 is due to the
carrying value of the debentures issued during the period and the associated embedded derivatives totalling
$15,307,457 being recognised as a current liability. As disclosed in note 11, even though the debentures are not due
to be repaid until 12 September 2026, they can be converted to equity at any time at the option of the Debenture
holder during their term, resulting in the current classification of all debenture related liabilities. The Group has cash
and cash equivalents of $4,345,983 at 31 December 2023 (31 December 2022: $15,426,824).
34
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Subsequent to balance date the Company raised $5,642,069 through the issue of 66,377,283 ordinary shares and
66,377,283 options with an expiry date of 12 months from the closing date and an exercise price of $0.14, under the
Company’s existing 7.1 and 7.1A placement capacity.
The Group will require further funding to progress its exploration projects. Based on the Group’s cash flow forecast
for the period ending 31 March 2025, the Board of Directors is aware of the Group’s need to access additional
capital in the next 12 months to enable the Group to continue its normal business activities to ensure the realisation
of assets and extinguishment of liabilities as and when they fall due, including progression of its exploration
interests.
Based on the Group’s demonstrated ability to successfully raise capital from multiple sources, the directors are
satisfied that at the date of signing of the financial report, there are reasonable grounds to believe that the Group
will be able to raise additional funding, either from debt or equity markets to enable it to pay its debts as and when
they fall due and that it is appropriate for the financial statements to be prepared on a going concern basis.
In the event that all the funding options available to the Group do not transpire and the Group is unable to meet its
liabilities by their respective due dates, there is material uncertainty as to whether the Group can continue as a going
concern and therefore whether it will realise its assets and discharge its liabilities in the normal course of business
and at the amounts stated in the consolidated financial statements.
The consolidated financial statements do not include any adjustment relating to the recoverability or classification of
recorded asset amounts or to the amounts or classification of liabilities that may be necessary should the Group not
be able to continue as a going concern.
(d) Hyperinflation
The Group’s accounting policy in relation to the adoption of AASB 129 Financial Reporting in Hyperinflationary
Economies (AASB 129) applied in relation to its subsidiary, Golden Mining SA (Argentine peso) is disclosed below:
AASB 129 requires that the financial statements of entities whose functional currency is that of a hyperinflationary
economy to be adjusted for the effects of changes in a suitable general price index and to be expressed in terms of
the current unit of measurement at the closing date of the reporting period.
For the purposes of concluding on whether an economy is categorised as high inflation under AASB 129, the standard
details a series of factors to consider, including a cumulative inflation rate over three years that is close to or exceeds
100%. Based on these factors, the Argentine economy has been considered a high inflation economy for accounting
periods ending on or after 1 July 2018.
In accordance with AASB 129, the financial statements of an entity that reports in the currency of a high-inflation
economy must be reported in terms of the unit of measure in effect at the date of the financial statements. All amounts
in the statement of financial position that are not indicated in terms of the current unit of measure at the date of the
financial statements must be restated by applying a general price index. All the components of the income statement
must be indicated in terms of the unit of measurement updated at the date of the financial statements, applying the
change in the general price index that has occurred since the date on which the income and expenses were originally
recognised in financial statements.
The Argentine Securities Commission established that the series of indexes to be used in the AASB 129 application
is the one established by the Argentine Federation of Professional Councils in Economic Sciences. The inflation was
211.4% and 95.0% in the year ended 31 December 2023 and 31 December 2022, respectively. The effects of the
application of AASB 129 are detailed below:
Statement of financial position
i. The monetary items (those with a fixed face value in local currency) are not restated as these are stated in
the current measurement unit at the closing date of the reported period. In an inflationary period, keeping
monetary assets causes the loss of purchasing power and keeping monetary liabilities causes gain in
purchasing power as long as those items are not tied to an adjustment mechanism compensating those
effects. The monetary loss or gain is included in the statement of profit or loss and other comprehensive
income for the reported period.
ii. Non-monetary items that are measured at their current values at the end of the reported period are not
restated. However, an adjustment process must be completed to determine the impact to the statement of
profit or loss and other comprehensive income for holding these non-monetary items at a uniform
35
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
measurement unit instead of a current measurement unit. There were no non-monetary items measured at
current values as at 31 December 2023 and 31 December 2022.
iii. Non-monetary items at historical cost or measured at current values based on previous dates to the reported
period are restated at rates to reflect the movement that has occurred from the acquisition or current value
date until the reported period date. The amounts restated for these assets are then compared with the
corresponding recoverable values. As a result, depreciation and amortisation is determined in accordance
with the new restated amounts. Non-monetary items at historical cost are property, plant and equipment,
exploration and evaluation assets and deferred tax liabilities.
Statement of profit or loss and other comprehensive income
iv. Income and expenses, which includes interest and currency exchange differences are restated from the
original date of recognition. This is except for items such as depreciation and amortisation as explained
above in (d)iii. Where there is income or losses arising from using two different measurement units i.e.,
items measured at different dates, it is necessary to identify the compared amounts, separately restate them
and compare them again, but with amounts already restated.
v. The income or losses arising due to the exposure to the change in purchasing power of currency due to the
holding of monetary assets and liabilities is shown in a separate item in the statement of profit or loss and
other comprehensive income for the period.
vi. The restatement of non-monetary assets in the terms of the current unit of measurement at the end of the
reporting period without an equivalent adjustment for tax purposes, results in a temporary taxable difference
and the recognition of a deferred tax liability. The movement in any deferred tax balances is recognised
through the statement of profit or loss and other comprehensive income.
Statement of changes in equity
vii. All components of equity are restated by applying the general prices index as from the beginning of the
period. Movements in relation to the components of equity is determined based on the original recognition
date with the exception of share capital which is maintained at its nominal value.
Assets, liabilities, equity items, income (excluding comparatives) of the subsidiary in Argentina whose functional
currency is the currency of a hyperinflationary economy is translated into the AUD presentation currency at the
closing rate at the date of the most recent statement of financial position.
The Group’s comparative balances and amounts were presented in a stable currency and therefore are not adjusted
for subsequent changes in the price level or exchange rates. This resulted in a difference, arising on the adoption of
hyperinflation accounting, between the closing equity of the previous year and the opening equity of the current year.
The Group recognised this difference directly in the foreign currency translation reserve in the statement of changes
in equity.
(e)
Basis of Consolidation
The consolidated financial statements comprise of the separate financial statements of Challenger Gold Limited
(“Company” or “Parent”) and its subsidiaries as at 31 December each year (the “Group”).
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has:
• Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of
the investee)
• Exposure, or rights, to variable returns from its involvement with the investee
• The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption
and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an investee, including:
• The contractual arrangements with the other vote holders of the investee
• Rights arising from other contractual arrangements
• The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
36
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated
financial statements from the date the Group gains control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of Other Comprehensive Income (“OCI”) are attributed to the equity holders of
the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having
a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income,
expenses and cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities,
non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit
or loss. Any investment retained is recognised at fair value.
The financial statements of the subsidiaries are prepared for the same reporting period as the Parent, using consistent
accounting policies.
Business combinations have been accounted for using the acquisition method of accounting. Investments in
subsidiaries are accounted for at cost in the separate financial statements of the parent entity less any impairment
charges. Dividends received from subsidiaries are recorded as a component of other revenues in the separate
statement of profit or loss and other comprehensive income of the parent entity, and do not impact the cost of the
investment. Upon receipt of dividend payments from subsidiaries, the parent will assess whether any indicators of
impairment of the carrying value of the investment in the subsidiary exist. Where such indicators exist, to the extent
that the carrying value of the investment exceeds its recoverable amount, an impairment loss is recognised.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group
and are presented separately in the consolidated statement of profit or loss and other comprehensive income and
within equity in the consolidated statement of financial position. Losses are attributed to the non-controlling interest
even if it results in a deficit balance.
(f)
Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted, or substantively enacted, as at the end of the reporting period.
Deferred income tax is provided on all temporary differences as at the end of the reporting period between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax
liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is
probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable
that the temporary difference will reverse in the foreseeable future and taxable profit will be available against
which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance date and are
37
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be
recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted, or substantively
enacted, as at the end of the reporting period.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
(g) Exploration and Evaluation Expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration
and evaluation asset in the year in which they are incurred where the following conditions are satisfied:
(a) the rights to tenure of the area of interest are current; and
(b) at least one of the following conditions is also met:
(i)
the exploration and evaluation expenditures are expected to be recouped through successful
development and exploitation of the area of interest, or alternatively, by its sale; or
(ii) exploration and evaluation activities in the area of interest have not at the balance date reached
a stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of
interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,
exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised
of asset used in exploration and evaluation activities. General and administrative costs are only included in the
measurement of exploration and evaluation costs where they are related directly to operational activities in a
particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount
of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger
than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an
impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its
recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been recognised for the asset in previous years.
Where technical and financial viability are demonstrable to proceed with development in respect of a particular area
of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified
to development.
(h) Trade and Other Payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged
to make future payments in respect of the purchase of these goods and services. Amounts are unsecured and are
usually paid within 30 to 45 days of recognition.
(i) Cash and Cash Equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank
overdrafts are shown within borrowings in current liabilities in the statement of financial position.
For the purpose of the statement of cash flows, cash consists of cash and cash equivalents as defined above, net of
bank overdrafts.
38
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
(j) Other Receivables
All receivables other than statutory receivables such as VAT and GST are held at amortised cost less any expected
credit loss. An expected credit loss provision, when applicable, is made to reflect changes in credit risk since the
initial recognition.
(k) Foreign Currency Translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated
at the rate of exchange ruling at the end of the reporting period.
All exchange differences in the consolidated financial report are taken to profit or loss with the exception of
differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These
are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or
loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was determined.
The functional currencies of the Group are United States Dollars (USD), Argentinian Peso’s, South African Rand
(ZAR) and Australian Dollars (AUD). The presentation currency is Australian Dollars (AUD).
As at reporting date the assets and liabilities of the non-hyperinflationary subsidiaries are translated into the
presentation currency of Challenger Gold Limited at the rate of exchange ruling at the end of the reporting period
and income and expenses are translated at the weighted average exchange rate for the year.
The exchange differences arising on the translation are taken directly to a separate component of equity, being
recognised in the foreign currency translation reserve.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign
operation is recognised in profit or loss.
(l) Earnings Per Share (“EPS”)
Basic earnings per share is calculated as net profit or loss attributable to members of the parent, adjusted to exclude
costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Diluted EPS is calculated as net profit or loss attributable to members of the parent, adjusted for: costs of servicing
equity (other than dividends) and preference share dividends; the after-tax effect of dividends and interest associated
with dilutive potential ordinary shares that would have been recognised as expenses; and other non-discretionary
changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares
divided by the weighted average number of shares and dilutive potential shares, adjusted for any bonus element.
(m) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors.
(n)
Trade Receivables
Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost
using the effective interest rate method, less provision for impairment. Trade receivables are generally due for
settlement within periods ranging from 15 days to 30 days.
A provision for impairment is established based on 12-month expected credit losses unless there has been a
significant increase in credit risk when lifetime expected credit losses are recognised. The amount of any provision
is recognised in profit or loss.
(o)
Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration received. Any transaction costs arising
on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.
39
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
(p) Other Income
The following specific recognition criteria must also be met before income is recognised:
Interest
Interest income is recognised as the interest accrues on the related financial asset. Interest is determined using the
effective interest rate method, which applies the interest rate that discounts estimated future cash receipts over the
expected life of the related financial asset.
Gain/loss on Foreign Exchange Conversion
Blue chip swaps are bought in USD and sold in Argentinian Peso’s on the same day. The income/loss is recognised
on the day of the sale.
(q) Property, Plant & Equipment
Property, plant & equipment is measured at cost less accumulated depreciation and any accumulated impairment
losses. Depreciation is provided on a straight line basis on all property, plant and equipment over 3 to 10 years . The
assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable
amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the
cash-generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its
approximate fair value.
An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated
recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in the statement of profit or loss and other
comprehensive income.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits
are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the
year the asset is derecognised.
(r)
Share-based Payment Transactions
Equity settled transactions:
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based
payments, whereby employees render services in exchange for shares or rights over shares (equity-settled
transactions).
The cost of equity-settled transactions with employees is measured by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined using the Black & Scholes option-
pricing model or by an external valuer using Monte Carlo Simulation. In valuing equity-settled transactions, no
account is taken of any performance conditions, other than conditions linked to the price of the shares of Challenger
Gold Limited.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
(i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity
instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions
being met as the effect of these conditions is included in the determination of fair value at grant date. The statement
of profit or loss and other comprehensive income charge or credit for a period represents the movement in cumulative
40
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
expense recognised as at the beginning and end of that period. No expense is recognised for awards that do not
ultimately vest, except for awards where vesting is only conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. In addition, an expense is recognised for any modification that increases the total fair value of the
share-based payment arrangement, or is otherwise beneficial to the employee, measured at the modification date.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled
award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated
as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
(s) Financial Liabilities
Financial liabilities are measured at fair value on recognition and are subsequently measured at amortised cost using
the effective interest rate method, except for financial liabilities designated at fair value through profit or loss, that
are carried subsequently at fair value with gains and losses recognised in the profit or loss statement.
The effective interest method is a method of calculating the amortised cost of a financial liability and allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the financial liability, or, where appropriate, a shorter period. Where the
movement in fair value is due to a change in the entity’s credit risk, such gain / loss is recognised in the Statement
of Profit or Loss and Other Comprehensive Income.
Interest Bearing Liabilities
Interest bearing liabilities are initially recognised at fair value, net of any transaction costs incurred. These balances
are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the
redemption amount is recognised in the profit or loss over the term of the liability using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the
fee is capitalised as a prepayment for liquidity services and amortised over the term of the facility to which it relates.
Interest bearing liabilities are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.
Convertible Debentures
The component of convertible debentures that exhibit characteristics of a liability is recognised as a financial liability
in the balance sheet, net of transaction costs being the debt component. On issuance of convertible debentures, the
amount initially attributed to the debt component equals the discounted cashflows using a market rate of interest that
would be payable on a similar debt instrument that does not include an option to convert. This amount is carried as
a short-term liability on an amortised basis until extinguished on conversion or redemption. The increase in liability
due to the passage of time is recognised as a finance cost.
On issuance of the convertible debenture, the conversion component is recognised as a derivative financial liability
at fair value. This is recognised as a financial liability designated at fair value through profit or loss remeasured at
each balance date.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another liability on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is
recognised in the statement of profit or loss.
(t) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and
a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating
losses.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the statement of profit or loss and other comprehensive income net of any
reimbursement.
41
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is recognised as a borrowing cost.
(u) Employee leave benefits
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within
12 months of the balance date are recognised in other payables in respect of employees’ services up to the balance
date. They are measured at the amounts expected to be paid when the liabilities are settled.
(v)
Significant accounting judgements, estimates and assumption
The application of accounting policies requires the Group’s management to make estimates and assumptions that
affect the carrying values of assets and liabilities that are not readily apparent from other sources. The determination
of estimates requires the exercise of judgment based on various assumptions and other factors such as historical
experience, current and expected economic conditions and expectations of future events that are believed to be
reasonable under the circumstances. Actual results could differ from those estimates.
Estimates and underlying assumptions are evaluated on an ongoing basis.
Revisions are recognised in the period in which the estimate is revised if it affects only that period, or in the period
of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of the assets and liabilities within the next financial year are discussed below.
Estimates and assumptions
Share-based Payments
The Group measures the cost of equity-settled transactions with employees and consultants, where the fair value of
the services provided cannot be reliably measured by reference to the fair value at grant date using the Black &
Scholes formula or Monte Carlo Simulation, taking into account the terms and conditions upon which the
instruments were granted as well as the probability that various non-market vesting conditions are being met. The
assumptions used are detailed in Note 17.
Exploration and evaluation expenditure carried forward
The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgment in
determining whether it is likely that future economic benefits are likely either from future exploitation or sale or
where activities have not reached a stage which permits a reasonable assessment of the existence of reserves.
In addition to applying judgement to determine whether future economic benefits are likely to arise from the Group’s
exploration and evaluation assets or whether activities have not reached a stage that permits a reasonable assessment
of the existence of reserves, the Group has to apply a number of estimates and assumptions. The determination of
a Joint Ore Reserves Committee (JORC) resource is itself an estimation process that involves varying degrees of
uncertainty depending on how the resources are classified (i.e., measured, indicated or inferred).
Estimates and assumptions may change as new information becomes available. If, after expenditure is capitalised,
information becomes available suggesting that the recovery of expenditure is unlikely the relevant capitalised
amount is written off to the statement of profit or loss and other comprehensive income in the period when the new
information becomes available.
For exploration and evaluation carried forward, the Group continues to assess the stage of the projects based on
whether the projects have met technical and commercial feasibility completion, which includes financing approval.
for Hualilan, at 31 December 2023. A bankable feasibility study (BFS) or a definitive feasibility study (DFS) have
not been completed (being technical feasibility) and financing options and approval have not been confirmed
(commercial feasibility), therefore continues to be recognised as capitalised exploration and evaluation.
Impairment of exploration and evaluation assets
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment on a regular
basis or whenever impairment indicators are present. When information becomes available suggesting that the
recovery of expenditure which had previously been capitalised is unlikely or that the Group no longer holds tenure,
the asset is tested to determine the recoverable amount and assess whether this is below carrying amount. If the
recoverable amount is below the carrying amount, then the asset is impaired.
42
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
The determination as to whether there are any indicators to require capitalised exploration and evaluation
expenditure to be assessed for impairment, involves a number of judgments including whether the Group has tenure,
whether it will be able to perform ongoing expenditure and whether there is sufficient information for a decision to
be made that the area of interest is not commercially viable. The Group performed an assessment of the impairment
indicators at period end, taking into account the following factors:
• The Group still has the right to explore the tenements;
• To date there have been no adverse findings reported or identified from technical studies undertaken that
would affect the Group or the exploration and evaluation expenditure assets of the Group; and
• Substantial further expenditure is forecast at 31 December 2023 and beyond, to continue to advance
development for the tenements held by the Group.
As a result of considering these factors, the directors did not identify any impairment indicators.
Fair value of derivative financial liability
Estimating fair value for the derivative financial liability requires the determination of the most appropriate valuation
model and the determination of the most appropriate inputs to the valuation model. The assumptions used for
estimating the fair value of the derivative financial liability are disclosed in Note 11.
(w) Parent Entity Disclosures
The financial information for the parent entity, which is the legal parent Challenger Gold Limited, disclosed in Note
26 has been prepared on the same basis as the consolidated financial statements, except as set out below.
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the separate financial statements of the parent entity less any
impairment charges. Dividends received from subsidiaries are recorded as a component of other revenues in the
separate statement of profit or loss and other comprehensive income of the parent entity, and do not impact the cost
of the investment. Upon receipt of dividend payments from subsidiaries, the parent will assess whether any
indicators of impairment of the carrying value of the investment in the subsidiary exist. Where such indicators exist,
to the extent that the carrying value of the investment exceeds its recoverable amount, an impairment loss is
recognised.
2.
OTHER INCOME
Fair value gain on derivative liability – see note 11
Gain on Blue Chip Swaps (a)
Foreign exchange gain
Interest received
Profit on sale of equipment
Consolidated
12 months
ended 31
December 2023
$
Consolidated
6 months ended
31 December
2022
$
5,817,504
3,174,657
512,718
113,013
4,170
9,622,062
2,448,501
7,865,549
968,606
24,426
-
11,307,082
(a) In 2019, the Argentine government reinstituted exchange controls restricting the purchase of foreign currencies. As a
result of these exchange controls, the Group use a legal trading mechanism commonly known as the Blue Chip Swap in
which the Argentinian subsidiary, Golden Mining SA, buys Argentinian securities in USD, who then sells the securities
in Argentina for Argentinian Peso on the same day. This is to enable the Group to fund working capital in its Argentinian
operations. The Blue Chip Swap rate has diverged significantly from Argentina’s official exchange rate resulting in the
Group recognising a gain from Blue Chip Swap transactions.
The Blue Chips Swaps are financial instruments where the gain or loss associated with the trading of these financial
instruments are treated as other income or other expenses. The Group holds no Blue Chip Swaps at 31 December 2023
(31 December 2022: nil) and never holds Blue Chip Swaps overnight.
43
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
3.
INCOME TAX
Current tax
Deferred tax
Income tax (benefit)/expense
The prima facie tax (benefit)/expense on profit before income tax
is reconciled to the net profit before income tax as follows:
Net profit before income tax
Prima facie tax benefit on result
before income tax at 30% (31 December 2022: 30%)
Add:
-
-
-
-
-
Share based payments
Hyper inflation adjustments
Non taxable fair value gain
Differences in tax rate of subsidiaries operating in
different jurisdictions
Other deferred tax assets not recognised
Income tax (benefit) / expense
The following tax deferred tax balances have been recognised:
Deferred tax assets / (liabilities)
Gain on blue chip swaps
Hyperinflation adjustments
Tax losses
Tax losses not recognised
Consolidated
12 months
ended 31
December 2023
$
Consolidated
6 months ended
31 December
2022
$
-
(3,822,688)
(3,822,688)
-
1,962,994
1,962,994
50,039,112
26,647,964
15,011,734
7,994,389
258,062
(21,667,217)
(1,745,251)
2,549,218
75,876
(7,243,864)
(734,550)
1,323,383
1,770,766
547,760
(3,822,688)
1,962,994
As at 31
December 2023
$
As at 31
December 2022
$
(2,167,903)
(578,525)
6,825,563
(6,403,063)
(7,211,674)
(2,325,007)
5,272,578
(4,431,447)
(2,323,928)
(8,695,550)
The tax benefits of the above deferred tax assets will only be obtained if:
(a)
(b)
(c)
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefits to
be utilised;
the Group continues to comply with the conditions for deductibility imposed by law; and
no changes in income tax legislation adversely affect the Group in utilising the benefits.
Tax consolidation
i.
Members of the tax consolidated group and the tax sharing arrangement
Challenger Gold Limited and its 100% owned Australian resident subsidiaries formed a tax consolidated group with
effect from 1 July 2020. Challenger Gold Limited is the head entity of the tax consolidated group. Members of the tax
consolidated group have not entered into a tax sharing agreement, as in Australia the group has nominal taxable
income, however has an arrangement that provides for the allocation of income tax liabilities between the entities
should the head entity default on its tax payment obligations. No amounts have been recognised in the financial
statements in respect of this agreement on the basis that the possibility of default is remote. A Tax Sharing Agreement
and a Tax Funding Agreement may be entered into in the future.
44
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
ii.
Tax effect accounting by members of the tax consolidated group
Measurement method adopted under AASB Interpretation 1052 Tax Consolidation Accounting
Effectively, each entity is treated as though it is a separate division of the consolidated group, and transactions between
entities that are part of the same consolidated group are ignored for Australian income tax purposes. However, entities
that form part of a consolidated group for Australian income tax purposes remain separate legal entities. As such, they
are still required to maintain, among other items, separate accounts and records. The asset-based model determines
the tax cost base of assets held by a subsidiary member when it joins a consolidated group. The tax cost base to the
head company of the joining entity’s assets is determined through the allocation of the allocable cost amount (“ACA”)
to the entity’s underlying assets. There is no resetting of the tax cost of assets held by the head company of a
consolidated group.
4.
CASH AND CASH EQUIVALENTS
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand and at bank and
investments in money market instruments, net of outstanding bank overdrafts. Cash at bank earns interest at floating
rates based on a daily bank deposit rate.
As at 31
December
2023
$
As at 31
December
2022
$
4,345,983
15,426,824
Consolidated
12 months ended
31 December
2023
$
Consolidated
6 months ended
31 December
2022
$
53,861,800
24,684,970
174,996
2,312,635
(65,122)
4,170
860,205
(5,817,504)
(48,788,194)
(3,174,657)
69,275
606,500
(453,077)
-
252,920
(2,448,501)
(19,333,616
)
(7,865,549)
(3,822,688)
1,962,994
(190,122)
(612,552)
(5,257,033)
(41,252)
(166,579)
(2,731,915)
Cash at Bank
Reconciliation of net profit after tax to the net cash flows from operations:
Net profit
Non-cash items:
Depreciation
Finance costs – non-cash component relating to Debentures
Foreign exchange gains
Loss on sale of equipment
Share based payments
Fair value gain on derivative liability
Hyperinflation adjustments
Gain on sale of Blue-Chip Swaps
Changes in assets and liabilities
(Decrease)/Increase in Deferred Tax Liability
Decrease in receivables and prepayments
(Decrease) in payables and accruals
Net cash flows (used in) from operating activities
Changes in liabilities arising from financing activities – refer to note 11.
45
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
5. OTHER RECEIVABLES
Current
GST receivable
Other receivables
Closing balance
Non-current
VAT receivable
As at 31
December 2023
As at 31
December 2022
31,891
145,878
177,770
39,429
141,871
181,300
2,120,518
7,970,637
VAT receivable relates to exploration and evaluation expenditure in Argentina. The Secretary of Mining in
Argentina allows the Group to present the VAT recovery only two times during the year and to present claims after
14 months from the date of invoices. All the relevant invoices are currently in the process of being recovered with
the Secretary of Mining.
6. PREPAYMENTS
Current
Other pre-payments
7. DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
Non-current
Exploration and evaluation expenditure
Opening balance
Exploration and evaluation expenditure
Foreign exchange movements
Closing balance
546,993
733,525
138,714,424
154,145,647
154,145,647
19,986,418
(35,417,641)
138,714,424
133,675,262
24,386,715
(3,916,330)
154,145,647
The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phase is
dependent on the successful development and commercial exploitation or sale of the respective areas.
8.
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment
Cost
Accumulated depreciation
Net carrying amount
9.
TRADE & OTHER PAYABLES
685,517
(117,995)
567,522
1,110,048
(239,995)
870,053
Current
Trade creditors and accruals
Terms and conditions:
Trade creditors are non-interest bearing and are normally settled on 30-day terms.
1,257,516
1,948,499
10.
PROVISIONS
Current
Employee benefits
112,480
103,133
The provision for employee benefits represents accrued annual leave entitlements.
46
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
11. INTEREST BEARING AND DERIVATIVE FINANCIAL
LIABILITY
Current
Motor vehicle loan1
Debentures – loan component2
As at 31
December 2023
As at 31
December 2023
16,203
14,269,314
14,285,517
38,740
12,189,826
12,228,566
Derivative financial liability – conversion component 2
1,038,143
6,855,647
Non-current
Motor vehicle loan1
46,065
259,309
1In the prior period, a loan funding arrangement was entered into to purchase four motor vehicles. The liability is
denominated in Argentinian Peso at nominal interest rate of 131.72%. The Group is not exposed to the nominal interest
rate as it maintains almost all of its cash in USD in Argentina, negating the effect of a hyperinflation-based interest rate.
Movements in interest bearing loans and derivative financial liability:
31 December 2023
At beginning of the period
Accrued interest
Interest paid
Foreign exchange loss
Fair value movement
Deferred transaction costs
Total
31 December 2022
Debentures – loan
component2
$
12,801,753
3,726,107
(2,031,893)
218,384
-
14,714,351
(445,037)
14,269,314
Derivative financial
liability –
conversion
component2
$
6,855,647
-
-
-
(5,817,504)
1,038,143
-
1,038,143
Unsecured
loan $
Debentures – loan
component2
$
At beginning of the period
Advance from Convertible Debentures
Payment of unsecured loan
Recognition of derivative financial liability –
conversion component
Accrued interest
Interest paid
Foreign exchange gain
Fair value movement
Deferred transaction costs
Total
1,220,000
-
(1,220,000)
-
-
-
-
-
-
-
-
-
21,835,078
-
(9,304,148)
1,042,598
(601,102)
(170,673)
-
12,801,753
(611,927)
12,189,826
47
Derivative financial
liability –
conversion
component2
$
-
-
-
9,304,148
-
-
-
(2,448,501)
6,855,647
-
6,855,647
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
2Convertible Debentures
The Group issued a USD $15 million 9% convertible debenture on 6 September 2022. The Debentures are convertible
into fully paid equity securities in the share capital of the Group, at the option of the debenture holder, subject to and in
accordance with the terms and conditions of the Debenture Agreement between the Group and the debenture holder.
The Debentures are unsecured with a coupon (interest) rate of 9% (7% payable in cash and 2% payable in either cash
or Shares, at the debenture holder’s election) payable quarterly in arrears. The Share price used to calculate the number
of Shares to be issued for the interest component payable in Shares is the to 20 day VWAP ending three trading days
prior to the interest being payable. The Debentures have a four-year term from closing and will be repayable by the
Group upon expiry of that period to the extent not otherwise converted earlier into Shares. The Debentures can be
converted to equity at any time at the option of the Debenture holder during their term, resulting in the current
classification of all debenture related liabilities.
Upon closing, the Group paid the debenture holder an establishment fee equal to 3% of the principal amount of the
debenture in shares of $667,957. The establishment fee is amortised over the life of the debenture.
The Debenture gives the holders option to convert the debenture into equity (being a call option) and the associated
potential issue of shares give rise to a variable amount, in Australian dollars, of equity that would be issued by the Group
and therefore the debenture fails to meet the requirements to be classified as equity. It was concluded that the Derivative
Financial liability – conversion component is not clearly and closely related to the debt host contract and is therefore
bifurcated and measured separately. The Derivative Financial liability – conversion component has therefore been
accounted as fair value through profit and loss, with the conversion feature dependant on foreign exchange rates and
other factors as set out below.
In relation to the conversion feature of the Debenture, Management performed a valuation at fair value on initial
recognition and at the balance date with the movement in the fair value recognised in the profit or loss. The loan
component of Debentures is measured at fair value on recognition and are subsequently measured at amortised cost
using the effective interest rate method.
Valuation of Derivative Financial liability – conversion component
In relation to the conversion feature of the Debenture, Management performed a valuation at fair value at the balance date
using a Binomial pricing model with the movement in the fair value being a decrease recognised in the profit or loss.
Share Price: CEL’s share price based on the company’s closing share price as at 31 December 2023 and 31 December
2022. The significant decrease in the company’s share price at 31 December is the key driver for the significant decrease in
the fair value of the conversion component.
Volatility: Calculated using implied volatility of 70% for the CEL share price at 31 December 2023 (70% at 31 December
2022);
Risk free rate: The Australian 3.25 year bond rate of 3.605% (3.51% at 31 December 2022);
Dividend yield: Assumed that the Company will not pay a dividend during the life of the debenture;
Foreign Exchange: the interpolated RBA conversion rate of $0.6805 was used as the conversion rate from USD to AUD
($$0.6775 at 31 December 2022).
48
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
As at 31
December
2023
$
As at 31
December
2022
$
12. ISSUED CAPITAL
(a)
Issued Capital
134,013,483
123,620,259
Movement in ordinary shares on issue
Consolidated 12 months ended
31 December 2023
Consolidated 6 months
ended 31 December 2022
At start of period
Shares issued for cash
Shares issued on conversion employee
rights
Shares issued on vesting of performance
shares
Shares issued in lieu of cash
Transaction costs relating to issued shares
No
1,045,815,039
83,333,334
$
No
123,620,259 1,027,713,580
13,684,213
10,000,000
$
120,378,045
2,600,000
2,500,000
207,500
-
-
120,000,000
9,520,001
-
1,261,168,374
-
870,349
(684,625)
134,013,483
4,417,246
-
1,045,815,039
825,720
(183,506)
123,620,259
The Group does not have authorised capital nor par value in respect of its issued capital. Ordinary shares have the right
to receive dividends as declared and, in the event of a winding up of the Group, to participate in the proceeds from sale
of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their
holder to one vote, either in person or proxy, at a meeting of the Group.
b) Options
At the date of this report 10,000,000 unlisted options (31 December 2022: 10,000,000) over new ordinary shares in
the Company were on issue:
Type
Date of Expiry
Exercise
Price
Number under
Option
Unlisted
14 April 2025
$0.45
10,000,000
No ordinary shares were issued upon the exercise of options during or since the end of the period ended 31 December
2023 and up to the date of this report.
PERFORMANCE SHARES
At the date of this report, there are no Performance Shares over new ordinary shares in the Group were on issue.
120,000,000 Performance Shares were issued as part of the Group’s acquisition of AEP Corporation Pty Ltd disclosed in
the Prospectus document dated 16 May 2019.
Type
Performance A
Performance B
Number
60,000,000
60,000,000
Class A Performance Shares had the following vesting conditions:
A JORC Compliant Mineral Resource Estimate of at least Inferred category on either Project of the following:
i.
ii.
a minimum 500,000 ounces of gold (AU) or Gold Equivalent (in accordance with clause 50 of the JORC Code) at
a minimum grade of 6 grams per tonne Gold Equivalent; or
a minimum 1,500,000 ounces of gold (AU) or Gold Equivalent (in accordance with clause 50 of the JORC Code)
at a minimum grade of 2.0 grams per tonne Gold Equivalent; or
49
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
iii.
a minimum 3,000,000 ounces of gold (AU) or Gold Equivalent (in accordance with clause 50 of the JORC Code)
at a minimum grade of 1.0 grams per tonne Gold Equivalent.
Class B Performance Shares will vest on the completion and announcement by Challenger (subject to the provision of
information allowable at the time of completion) of a positive Scoping Study (as defined in the JORC Code) on either the
Hualilan Project or the El Guayabo Project by an independent third-party expert which evidences an internal rate of return
of US Ten Year Bond Rate plus 10% (using publicly available industry assumptions, including deliverable spot commodity
mineral prices, which are independently verifiable) provided that the total cumulative EBITDA over the project life is over
US$50m.
All Performance Shares vested during the financial year ended 31 December 2023 and accordingly 120,000,000 fully
paid ordinary shares were issued.
PERFORMANCE RIGHTS
At 31 December 2023, 16,000,000 Performance Rights over new ordinary shares in the Group were on issue:
Type
Class A
Class B
Number
8,000,000
8,000,000
Class A Performance Rights have the following vesting conditions:
A JORC Compliant Mineral Resource Estimate of at least Inferred category on either Project of the following:
i.
ii.
iii.
a minimum 500,000 ounces of gold (AU) or Gold Equivalent (in accordance with clause 50 of the JORC Code) at
a minimum grade of 6 grams per tonne Gold Equivalent; or
a minimum 1,500,000 ounces of gold (AU) or Gold Equivalent (in accordance with clause 50 of the JORC Code)
at a minimum grade of 2.0 grams per tonne Gold Equivalent; or
a minimum 3,000,000 ounces of gold (AU) or Gold Equivalent (in accordance with clause 50 of the JORC Code)
at a minimum grade of 1.0 grams per tonne Gold Equivalent.
Class B Performance Rights will vest on the completion and announcement by Challenger (subject to the provision of
information allowable at the time of completion) of a positive Scoping Study (as defined in the JORC Code) on either the
Hualilan Project or the El Guayabo Project by an independent third-party expert which evidences an internal rate of return
of US Ten Year Bond Rate plus 10% (using publicly available industry assumptions, including deliverable spot commodity
/ mineral prices, which are independently verifiable) provided that the total cumulative EBITDA over the project life is
over US$50m.
These Performance Rights vested during the financial year ended 31 December 2023. No ordinary shares were issued upon
the vesting of performance rights during or since the end of the financial year ended 31 December 2023, as the rights have
not been exercised.
INCENTIVE PERFORMANCE RIGHTS
At 31 December 2023, 28,272,427 Incentive Performance Rights over new ordinary shares in the Group were on issue:
Type
Number
Incentive Performance Rights(a)
Incentive Performance Rights(a)
Incentive Performance Rights (b)
Incentive Performance Rights (c)
267,027
8,505,400
16,500,000
3,000,000
(a)Incentive Performance Rights had the vesting condition that the holder must remain employed or engaged by the Group
and are fully vested.
(b) During the financial year ended 31 December 2023, 19,000,000 Performance Rights were issued to an employee and
will convert into ordinary shares as follows:
50
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Number of Performance Rights
2,500,000
2,500,000
2,000,000
2,000,000
5,000,000
5,000,000
Milestones
Upon the successful completion of a scoping study that leads to an
announcement that the Hualilan Project will progress to a Pre-feasibility study
(PFS).
Upon the successful completion of a PFS for the Hualilan Project that leads to
an announcement that the Hualilan Project will progress to either a bankable
feasibility study (BFS) or a definitive feasibility study (DFS).
Upon the successful completion of a BFS or DFS that leads to an announcement
that the Hualilan Project will progress to construction.
Upon the commissioning of a processing plant for the Hualilan Project.
Upon the announcement of a mineral resource estimate for the El Guayabo
Project of not less than 20 million ounces of gold equivalent.
Upon the successful completion of either a preliminary economic assessment or
scoping study at the El Guayabo Project demonstrating total production of at
least 10 million ounces of Gold Equivalent.
The fair value of the performance rights was determined to be the share price at the issuance date. 2,500,000 ordinary shares
were issued upon the vesting of performance rights during the financial year ended 31 December 2023. For the remaining
16,500,000 performance rights, management assessed that at 31 December 2023, it is not probable that the vesting
conditions would be met and therefore no expenses were recognised. No ordinary shares were issued upon the vesting of
performance rights since the end of the period ended 31 December 2023.
(c) During the period, 3,000,000 Performance Rights were issued to Pini Althaus, a member of the KMP and will convert
into ordinary shares as follows:
Number of Performance Rights
1,000,000
1,000,000
1,000,000
Milestones
The Company’s share price trading on ASX at a volume weighted average price
(VWAP) at or above a price of A$0.30 per share for 20 consecutive trading days
on which the Company’s shares have actually traded or before 8 February 2024.
The Company’s share price trading on ASX at a VWAP at or above a price of
A$0.40 per share for 20 consecutive trading days on which the Company’s
shares have actually traded or before 8 February 2025.
The Company’s share price trading on ASX at a VWAP at or above a price of
A$0.40 per share for 20 consecutive trading days on which the Company’s
shares have actually traded or before 8 February 2026.
1,000,000 Performance Rights lapsed on 8 February 2024 because the milestone had not been or had become incapable of
being satisfied.
For these performance rights, management obtained an external valuation using Monte Carlo Simulation to measure the fair
value of the performance rights at the balance date. The following assumptions were used:
Share Price: CEL’s share price based on the valuation date of 7 February 2023 of $0.16
Volatility: Calculated using implied volatility of 70% for the CEL share price at 31 December 2023
Risk free rate: The Australian 3.25 year bond rate of 3.605%
Dividend yield: Assumed that the Company will not pay a dividend during the life of the debenture;
51
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
13. RESERVES
Option reserve
Share based payments reserve
Foreign currency translation reserve
a) Movements in Reserves
Share based payment reserve
Opening balance
Share based payment expense
As at 31
December
2023
$
As at 31
December
2022
$
784
4,700,734
(111,326,470)
(106,624,952)
784
4,081,363
(24,624,354)
(20,542,207)
4,081,363
619,371
4,700,734
3,828,443
252,920
4,081,363
The share based payment reserve is used to recognise share based payments in relation to those provided to directors,
executives and employees as part of their remuneration and non-employees for their services. Refer to note 17 for
further details of the share based payments during the period.
Foreign currency translation reserve
Opening balance
Foreign currency translation
(24,624,354)
(86,702,116)
(111,326,470)
(3,903,087)
(20,721,267)
(24,624,354)
The foreign exchange differences arising on translation of the foreign controlled entities are taken to the foreign
currency translation reserve, as described in note 1(k). The reserve is recognised in profit and loss when the net
investment is disposed of.
14. PERFORMANCE SHARES
At 31 December 2023, there are no Performance Shares over new ordinary shares in the Company (31 December 2022:
120,000,000 Performance Shares, which were issued as part of the Group’s acquisition of AEP Corporation Pty Ltd
disclosed in the Prospectus document dated 16 May 2019). 120,000,000 ordinary shares were issued upon the vesting of
performance shares during the financial year.
Refer to note 12 for details.
15.
PERFORMANCE RIGHTS
At the date of this report, 16,000,000 Performance Rights over new ordinary shares in the Company were on issue. Refer
to note 12 for details.
The relevant interests held by each Director in shares, options, performance shares and performance rights of the Company
at the date of this report are included in the Remuneration Report above.
An assessment has been made at each balance date as the certainty of meeting the vesting conditions by an expected vesting
date. At the date of this report, these performance rights are fully vested with an amount being recognised in share based
payments expense for the year. However, these Performance Rights have not been exercised.
16.
INCENTIVE PERFORMANCE RIGHTS
At the date of this report, 27,272,427 Incentive Performance Rights over new ordinary shares in the Company were on
issue. Refer to note 12 for details.
2,500,000 ordinary shares were issued upon the vesting of performance rights during the financial year ended 31 December
2023.
52
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
No ordinary shares were issued upon the vesting of performance rights or performance shares during the financial ended
31 December 2022.
The relevant interests held by each Director in shares, options, performance shares and performance rights of the Company
at the date of this report are included in the Remuneration Report above.
17.
SHARE BASED PAYMENTS
Recognised share-based payment transactions
Consolidated
12 months
ended 31
December
2023
$
Consolidated
6 months
ended 31
December
2022
$
Recognised as part of capitalised exploration and evaluation
Supplier share based payment
139,903
48,788
Operating expenses
Employee share-based payments
860,205
252,920
Employee share based payment plan
The Group has established an Employee Incentive Plan (‘Plan’). The objective of the Plan is to assist in the recruitment,
reward, retention and motivation of employees of Challenger Gold Limited. Under the Plan, the Directors may invite
individuals acting in a manner similar to employees to participate in the Plans and receive options and / or performance
rights. An individual may receive the options and / or performance rights or nominate a relative or associate to receive the
options and / or performance rights. The Plan is open to directors, executive officers, nominated consultants and employees
of Challenger Gold Limited.
The fair value at grant date of performance rights granted was determined using the Company’s share price on the grant
date. The table below summaries performance rights granted under Incentive Performance Rights Plan:
Balance at
31 December
Grant Date
Expiry date
2022 Granted
Exercised
16 March 2020 4 July 2026
9 September 2021 4 July 2026
4 July 2030
8 February 2024
8 February 2025
8 February 2026
4 May 2023
21 June 2023
21 June 2023
21 June 2023
Number Number
Number
267,027
8,505,400
-
-
- 19,000,000
- 1,000,000
- 1,000,000
- 1,000,000
-
-
(2,500,000)
-
-
-
Total
8,772,427 22,000,000
(2,500,000)
Vested and
Balance at
exercisable at
31 December
31 December
Expired
Number
2023
2023
Number
Number
-
-
-
-
-
-
-
267,027
8,505,400
16,500,000
1,000,000*
1,000,000
1,000,000
267,027
8,505,400
-
-
-
-
27,272,427
8,772,427
There were no performance rights forfeited or cancelled during the year. The performance rights are issued for Nil
consideration and have an exercise price of Nil.
* These performance rights expired subsequent to 31 December 2023.
53
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
18. KEY MANAGEMENT PERSONNEL EMOLUMENTS
(a) Details of Key Management Personnel
Sergio Rotondo– Executive Chairman
Kris Knauer – Managing Director
Sonia Delgado – Executive Director, appointed 28 November 2023
Fletcher Quinn – Non-Executive Director, appointed 8 February 2023
Pini Althaus – Non-Executive Director
Brett Hackett – Non-Executive Director, appointed 4 May 2023
Scott Funston – Company Secretary and Chief Financial Officer for the full year, resigned 4 May 2023 as Executive
Director.
Directors’ remuneration and other terms of employment are reviewed annually by the board having regard to performance
against goals set at the start of the period, relative comparative information and independent expert advice, as appropriate.
(b) Compensation of Key Management Personnel
The aggregate compensation paid to Directors and other members of key management personnel is out below:
Short-term employee benefits
Share-based payments
Consolidated
12 months
ended 31
December 2023
$
939,938
454,316
Consolidated
6 months
ended 31
December 2022
$
407,712
48,949
1,394,254
456,661
Further details of key management personnel remuneration have been included in the Remuneration Report section of the
Directors’ Report.
(c) Other Transactions with Key Management Personnel
Mr Quinn controls Seco Resources Pty Ltd (“Seco”). Seco has provided his services as Chairman to a value of $60,000 (6 months
ended 31 December 2022: $30,000) to Challenger during the period on normal commercial terms. This amount is included in the
Remuneration Report section of the Directors’ Report. $5,000 (6 months ended 31 December 2022: $5,000) was outstanding at
period end.
Mr Knauer controls Greenfield Securities Pty Ltd (“Greenfield”). Greenfield has provided his services as Managing Director and
CEO to a value of $295,000 (6 months ended 31 December 2022: $147,500) to Challenger during the period on normal commercial
terms. This amount is included in the Remuneration Report section of the Directors’ Report. $24,583 (6 months ended 31
December 2022: $24,583) was outstanding at period end.
Mr Funston controls Resourceful International Consulting Pty Ltd (“Resourceful”). Resourceful has provided his services as
Executive Director, Company Secretary and CFO to a value of $245,000 (6 months ended 31 December 2022: $122,500) to
Challenger during the period on normal commercial terms. This amount is included in the Remuneration Report section of the
Directors Report. $20,417 (6 months ended 31 December 2022: $20,417) was outstanding at period end.
(d) Amounts owing to Key Management Personnel
A total of $50,000 was outstanding to Key Management Personnel as at 31 December 2023 (31 December 2022: $50,000), as
noted above.
19.
SEGMENT INFORMATION
The Group is organised into one business segment, being exploration operations with three geographies. This operating
segment is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the
Chief Operating Decision Maker (“CODM”) in assessing performance and in determining the allocation of resources.
54
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
31 December 2023
Interest income
Other income
Segment income
Australia
$
91,190
5,307,578
5,398,768
Ecuador
$
-
4,170
4,170
Argentina
$
21,823
4,197,301
4,219,124
Consolidated
$
113,013
9,509,049
9,622,062
Segment profit / (loss) before income tax
(856,594)
(93,097)
50,988,803
50,039,112
Segment assets
Segment liabilities
43,366,259
26,718,649
76,388,302
146,473,210
16,136,653
151,544
2,775,452
19,063,649
Included within segment assets
Cash at bank
Plant and equipment and exploration expenditure
31 December 2022
Interest income
Other income
Segment income
3,686,844
39,614,220
247,760
26,337,919
411,379
73,329,479
Australia
$
24,426
3,417,107
3,441,533
Ecuador
$
-
-
-
Argentina
$
-
7,865,549
7,865,549
4,345,983
139,281,618
Consolidated
$
24,426
11,282,656
11,307,082
Segment profit / (loss) before income tax
429,529
(77,586)
26,296,021
26,647,964
Segment assets
Segment liabilities
50,337,662
21,367,869
107,622,455
179,327,986
19,403,356
645,856
10,041,492
30,090,704
Included within segment assets
Cash at bank
Plant and equipment and exploration expenditure
14,434,571
35,868,453
715,834
20,551,906
276,419
98,595,308
15,426,824
155,015,700
Consolidated
Consolidated
12 months
ended 31
December
2023
$
6 months
ended 31
December
2022
$
20.
EARNINGS PER SHARE
The following reflects the loss and share data used in the calculation of
basic earnings per share (EPS):
Profit used in calculation of basic EPS
53,861,800
24,684,970
Weighted average number of ordinary shares on issue used in the
calculation of basic and diluted EPS
The following reflects the profit and share data used in the calculation
of diluted earnings per share (EPS):
Number
Number
1,145,228,515
1,037,756,808
Profit used in calculation of diluted EPS
53,861,800
24,684,970
Weighted average number of ordinary shares on issue used in the
calculation of basic and diluted EPS
Number
Number
1,170,000,942
1,046,529,235
55
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
In considering the diluted earnings per share, the 10,000,000 options that were issued to Riverfort Capital LLC in
previous periods and the shares in relation to the convertible debentures have no impact as these instruments are out of
the money however could have a potential dilutive impact in future periods.
21. RELATED PARTY DISCLOSURE
Interest in subsidiaries
The consolidated financial statements include the financial statements of Challenger Gold Limited and the subsidiaries
listed in the following table:
Name
Country of
Incorporation
Percentage of equity interest held by the
Group
31 December 2023
31 December 2022
AEP Corporation Pty Ltd
Bundu Oil & Gas Exploration Pty Ltd*
Challenger Exploration Argentina Pty Ltd
Ecuador Mining Pty Ltd
Golden Mining SA**
Ecuador Mining SA**
Torata Mining SA**
Australia
South Africa
Australia
Australia
Argentina
Ecuador
Ecuador
100%
95%
100%
100%
100%
100%
100%
100%
95%
100%
100%
100%
100%
100%
*The assets held by Bundu Oil & Gas Exploration (Bundu) are not material and Bundu does not have a material non-
controlling interest in the Group.
**These entities hold exploration tenements in Argentina and Ecuador.
22. AUDITOR’S REMUNERATION
Fees to Ernst & Young Australia
Fees for the review of the financial reports of the Group and any controlled
entities at half-year
Fees for the audit of the financial reports of the Group and any controlled
entities at year end
Total fees to Ernst & Young Australia
Fees to other overseas member firms of Ernst & Young (Australia)
Fees for the audit and review of the financial reports of the Group and any
controlled entities
Total fees to overseas member firms of Ernst & Young (Australia)
Total auditor’s remuneration
23. FINANCIAL INSTRUMENTS
(a) Financial risk management and risk policies
Consolidated
12 months
Consolidated
6 months
ended
31 December
2023
$
ended
31 December
2022
$
30,000
52,050
82,050
-
50,000
50,000
94,652
94,562
129,369
129,369
176,702
179,369
The Group’s principal financial instruments comprise of cash, short-term deposits, convertible debentures and
payables. The main purpose of these financial instruments is to hold funds for the entity’s operations. The entity has
various other financial assets and liabilities such as receivables and trade payables, which arise directly from its
operations. It is, and has been throughout the period under review, the entity’s policy that no trading in financial
instruments shall be undertaken. The main risks arising from the entity’s financial instruments are cash flow interest
rate risk, liquidity risk, foreign currency risk and credit risk. The Board reviews and agrees policies for managing
each of these risks and they are summarised below.
56
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
(b) Interest rate risk
The Group is exposed to movements in market interest rates on short term deposits. The policy is to monitor the
interest rate yield curve out to 120 days to ensure a balance is maintained between the liquidity of cash assets and
the interest rate return.
31 December 2023
Consolidated
FINANCIAL ASSETS
Non-interest bearing
trade receivables
Cash and cash
equivalents
FINANCIAL
LIABILITIES
Non-interest bearing
trade payables
Fixed rate interest
bearing liabilities
Derivative liability
Motor vehicle loan
NET FINANCIAL
ASSETS
(LIABILITIES)
31 December 2022
Consolidated
FINANCIAL ASSETS
Non-interest bearing
Cash and cash
equivalents
FINANCIAL
LIABILITIES
Non-interest bearing
trade payables
Fixed rate interest
bearing liabilities
Derivative liability
Motor vehicle loan
NET FINANCIAL
ASSETS
(LIABILITIES)
Less than 1 month
1 to 3
months
3 months to 1
year
1 to 5 years
Total
$
$
177,770
4,345,983
4,523,753
(1,257,516)
-
(1,038,143)
-
2,228,094
-
-
-
-
-
-
-
-
$
-
-
-
-
$
-
-
-
-
-
-
(16,203)
(16,203)
(14,269,314)
-
(46,065)
(14,315,379)
$
177,770
4,345,983
4,523,753
(1,257,516)
(14,269,314)
(1,038,143)
(62,268)
(12,103,488)
Less than 1 month
1 to 3
month
s
3 months to 1
year
1 to 5 years
Total
$
$
914,825
15,426,824
16,341,649
(1,948,499)
-
(6,855,647)
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
(12,189,826)
-
(38,740)
(259,309)
$
914,825
15,426,824
16,341,649
(1,948,499)
(12,189,826)
(6,855,647)
(298,049)
7,537,503
(38,740)
(12,449,135)
(4,950,372)
Interest Rate Sensitivity Analysis
At reporting date, if interest rates had been 50 basis points higher or lower than the prevailing rates realised, with all other
variables held constant, there would have been an immaterial change in post-tax loss for the financial year ended 31
December 2023 (immaterial impact for financial year ended 31 December 2022). The impact on equity would have been
the same.
57
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Given rate of interest being fixed for the majority of the Group’s financial liabilities (the Motor Vehicle loan and the
debenture loan), there was minimal exposure to interest rate risk for the financial year ended 31 December 2023 (31
December 2022: Nil).
(c) Fair value disclosure of financial assets and liabilities
The fair value of a financial asset or a financial liability is the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date.
The fair values of cash and cash equivalents other receivables, interest bearing liabilities and trade and other payables
approximate their carrying values, as a result of their short maturity.
Fair value measurements recognised in the statement of financial position subsequent to initial fair value recognition can
be classified into levels 1 to 3 based on the degree to which fair valuable is observable.
Level 1 – Fair value measurements are those derived from quoted prices in active markets for identical assets and liabilities.
Level 2 – Fair value measurements are those derived from inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3 – Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability
that are not based on observable market data.
There were no transfers between any levels of the fair value hierarchy in the current or prior years.
Refer to note 11 for further disclosure considerations for the inputs used to determine fair value for the derivative financial
liability at fair value. The valuation techniques used have not changed for each of these financial instruments from the prior
period.
The below is a quantitative sensitivity analysis as at 31 December 2023 relating to the derivative financial liability
categorised as level 3 of the fair value hierarchy are shown below:
31 December 2023
Significant unobservable input
Sensitivity of the input to fair value
Derivative financial liability
Volatility
5% increase (decrease) would result in an increase
(decrease) of $192,747 (decrease of $201,486)
31 December 2022
Derivative financial liability
Volatility
5% increase (decrease) would result in an increase
(decrease) of $515,460 (decrease of $531,341)
(d) Credit risk exposures
The Group’s maximum exposure to credit risk at each balance date in relation to each class of recognised financial
assets is the carrying amount, net of any provision for expected credit loss, of those assets as indicated in the
statement of financial position. The maximum credit risk exposure on other receivables of the Group at 31 December
2023 is $145,878 (31 December 2022: $141,871). There are no impaired receivables at 31 December 2023.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group
exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of
transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty
limits that are reviewed and approved annually. Most of the Group’s cash is with reputable banks in Australia with
strong credit ratings. The Group measures credit risk on a fair value basis.
58
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
Concentration of Credit Risk
The Group is not exposed to any individual customer.
The Group’s VAT receivable is a statutory asset held with the Argentinian authorities and not considered a financial
asset as defined under AASB 9.
(e) Liquidity risk management
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial
assets and liabilities. All associated financial assets and liabilities are classified as current.
As disclosed in note 11, even though the debenture is not due until 12 September 2026, they can be converted to
equity at any time at the option of the Debenture holder during their term, resulting in the current classification of
all debenture related liabilities.
(f) Foreign exchange risk management
The Group is exposed to US Dollar (USD) and South African Rand (ZAR) currency fluctuations. At 31 December
2023, there would have been an immaterial change in the post-tax operating loss as a result of a 10% change in the
Australian Dollar (AUD) to the USD and ZAR. The impact to equity would be the same.
The Group use a legal trading mechanism commonly known as the Blue Chip Swap in which the Argentinian
subsidiary, Golden Mining SA, buys Argentinian securities in USD, then sells the securities in Argentina for
Argentinian Peso on the same day. This is to enable the Group to fund working capital in its Argentinian operations.
See Note 2 for further information.
(g) Capital Risk Management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it
may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the Group’s activities, being gold exploration, it does not have ready access to credit facilities,
with the primary source of funding being equity raisings. Accordingly, the objective of the Group’s capital risk
management is to balance the current working capital position against the requirements of the Group to meet
exploration programmes and corporate overheads. This is achieved by maintaining appropriate liquidity to meet
anticipated operating requirements, with a view to initiating appropriate capital raisings as required.
24. CONTINGENT ASSETS AND LIABILITIES
There are no known contingent liabilities or contingent assets.
25. COMMITMENTS FOR EXPENDITURE
There are no commitments for expenditure as at 31 December 2023 (31 December 2022: $Nil).
59
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
26. PARENT ENTITY DISCLOSURES
Information relating to Challenger Gold Limited, the legal Parent entity, is detailed below:
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Accumulated losses
Reserves
Total equity
Financial performance
(Loss)/income for the period
Other comprehensive income/(loss)
Total comprehensive (loss)/income
31
December
2023
$
3,752,039
139,443,698
143,195,737
15,786,176
-
15,786,176
127,409,561
164,059,055
(43,894,084)
7,244,590
127,409,561
31
December
2022
$
14,469,210
128,291,628
142,760,838
19,052,843
-
19,052,843
123,707,995
153,665,831
(36,583,055)
6,625,219
123,707,995
(7,311,029)
-
(7,311,029)
)
3
770,483
-
770,483
27.
SUBSEQUENT EVENTS
Subsequent to balance date the Company raised $5,642,069 through the issue of 66,377,283 ordinary shares and 66,377,283
options with an expiry date of 12 months from the closing date and an exercise price of $0.14, under the Company’s existing
7.1 and 7.1A placement capacity.
60
Annual Financial Report for the financial year ended 31 December 2023
Challenger Gold Limited
DIRECTORS' DECLARATION
1.
The Directors of the Company declare that:
a. the financial statements, notes and the additional disclosures are in accordance with the Corporations Act
2001 including:
i.
ii.
giving a true and fair view of the Group’s financial position as at 31 December 2023 and of its
performance for the financial year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001,
professional reporting requirements and other mandatory requirements;
b.
the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
c. Subject to the achievement of matters detailed in note 1(c), there are reasonable grounds to believe that
the Company will be able to pay its debts as and when they become due and payable; and
2.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 31 December 2023.
This declaration is signed in accordance with a resolution of the Board of Directors.
Mr Kris Knauer
Managing Director
28 March 2024
61
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the members of Challenger Gold Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Challenger Gold Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 31
December 2023, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, notes to the financial statements, including a summary of material accounting policy
information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 December
2023 and of its consolidated financial performance for the year ended on that date;
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001; and
c. Complying with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1(c) in the consolidated financial report, which describes the principal
conditions that raise doubt about the Group’s ability to continue as a going concern. These events or
conditions indicate that a material uncertainty exists that may cast significant doubt on the Group’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matter described below to be the key audit
matter to be communicated in our report. For the matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to this matter. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matter below, provide the basis for our audit opinion on the
accompanying financial report.
1. Carrying value of exploration and evaluation assets
Why significant
How our audit addressed the key audit matter
At 31 December 2023, the Group held exploration and
evaluation assets of $138,714,424, representing 95%
of the Group’s total assets.
The carrying value of exploration and evaluation assets
is assessed for impairment by the Group when facts and
circumstances indicate that the exploration and
evaluation assets may exceed their recoverable amount.
The determination as to whether there are any
indicators to require an exploration and evaluation asset
to be assessed for impairment, involves a number of
judgements including whether the Group has tenure, will
be able to perform ongoing expenditure and whether
there is sufficient information for a decision to be made
that the area of interest is not commercially viable. The
Group did not identify any impairment indicators as at
31 December 2023.
Refer to Note 1(g) and 7 in the financial report for
exploration and evaluation asset balances and related
disclosures.
This was considered a key audit matter because of the
significant judgment involved in determining whether
any impairment indicators were present for the Group’s
capitalised exploration and evaluation asset balances.
We evaluated the Group’s assessment as to whether
there were any indicators of impairment to require the
carrying value of exploration and evaluation assets to be
tested for impairment. In performing our procedures, we:
► Assessed whether the Group’s right to explore was
current, which included obtaining and assessing
supporting documentation such as license
agreements;
► Evaluated the Group’s intention to carry out
significant ongoing exploration and evaluation
activities in the relevant areas of interest which
included, assessing the Group’s approved cash flow
forecast and enquiring of senior management and the
directors as to their intentions and the strategy of
the Group;
► Assessed whether any exploration and evaluation
data existed to indicate that the carrying value of
exploration and evaluation assets is unlikely to be
recovered through development or sale; and
► Assessed the adequacy of the disclosures included in
Note 1 (g) and Note 7 of the financial report.
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Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2023 annual report other than the financial report and our
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards, International Financial
Reporting Standards and the Corporations Act 2001 and for such internal control as the directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
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64
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
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Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 31
December 2023.
In our opinion, the Remuneration Report of Challenger Gold Limited for the year ended 31 December
2023, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
V L Hoang
Partner
Perth
28 March 2024
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66
Annual Financial Report 2023
Challenger Gold Limited
ASX Additional Information
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current at 25 March 2024.
Substantial Shareholders
The names of the substantial shareholders who have notified the Company in accordance with Section 671B of the Corporations
Act 2001:
Shareholder
Sergio Rotondo
Black Rock Group
Kris Knauer
Distribution of Shareholders
Number
89,000,000
156,381,136
89,278,666
%
7.06
12.40
7.08
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 -100,000
100,001 and over
TOTAL
Ordinary Shares
Number of Holders
136
Number of Shares
33,611
% Issued Share Capital
0.00%
451
323
947
733
2,590
1,366,025
2,581,308
39,081,922
1,218,105,508
1,261,168,374
0.11%
0.20%
3.10%
96.59%
100.00%
On-Market Buy Back
There is no current on-market buy back.
Voting Rights
All ordinary shares carry one vote per share without restriction.
Top 20 Shareholders
The names of the twenty largest holders of each class of quoted equity security, the number of equity security each holds and
the percentage of capital each hold is as follows:
RANK
1
2
3
4
5
6
7
8
7
8
9
10
11
12
13
14
15
16
17
18
TOTAL
HOLDER NAME
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SERGIO ROTONDO
MONEYBUNG PTY LTD
CITICORP NOMINEES PTY LIMITED
PISTON SECURITIES PTY LTD
BROOKAVA PTY LTD
UBS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR MICHAEL STEWART ZIVCIC
JAWAF ENTERPRISES PTY LTD
BELAIR AUSTRALIA PTY LTD
MONEYBUNG PTY LTD
DOMAEVO PTY LTD
JASON EVELEIGH
LQ SUPER PTY LTD
E & E HALL PTY LTD
MR CHRIS FRENEY
PASAMA PTY LTD
FALERNO INVESTMENTS PTY LTD
BOND STREET CUSTODIANS LIMITED
UNITS
141,335,344
89,000,000
69,954,167
47,883,159
39,304,167
33,693,734
20,379,612
18,128,013
16,766,666
15,400,000
14,559,334
14,226,562
13,970,407
13,350,000
13,000,000
12,837,500
11,400,000
11,200,000
10,420,998
10,321,166
11.21%
7.06%
5.55%
3.80%
3.12%
2.67%
1.62%
1.44%
1.33%
1.22%
1.15%
1.13%
1.11%
1.06%
1.03%
1.02%
0.90%
0.89%
0.83%
0.82%
617,130,829
48.93%
67
Annual Financial Report 2023
Challenger Gold Limited
Interests in Tenements Held
Project
Property Name
Tenure Title
Holder
Interest
%
El Guayabo Torata Mining Resources S.A
100%
Area
(ha)
281
DNPM No
of Area
Status of
Tenure
COD225
Granted
Colorado V
El Guaybo 2
Goldking Mining Company
S.A
Mr. Segundo Ángel Marín
Gómez
earning 50%
2331
COD3363.1
Granted
earning 80%
957
COD300964
Granted
El
Guayabo
El
Guayabo
El
Guayabo
Hualilan
Divisadero
Golden Mining S.R.L.
100%
Golden Mining S.R.L.
as above
Golden Mining S.R.L.
Golden Mining S.R.L.
Golden Mining S.R.L.
Golden Mining S.R.L.
Golden Mining S.R.L.
Golden Mining S.R.L.
CIA GPL S.R.L.
CIA GPL S.R.L.
CIA GPL S.R.L.
CIA GPL S.R.L.
CIA GPL S.R.L.
CIA GPL S.R.L.
CIA GPL S.R.L.
as above
as above
as above
as above
as above
as above
as above
as above
as above
as above
as above
as above
as above
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
Golden Mining S.R.L.
as above
1.9
CIA GPL S.R.L.
as above
1.9
5448-M-1960
Granted
5448-M-1960
Granted
5448-M-1960
Granted
5448-M-1960
5448-M-1960
5448-M-1960
5448-M-1960
5448-M-1960
5448-M-1960
5448-M-1960
Granted
Granted
Granted
Granted
Granted
Granted
Granted
5448-M-1960
Granted
5448-M-1960
Granted
5448-M-1960
5448-M-1960
5448-M-1960
195-152-C-
1981
195-152-C-
1981
Granted
Granted
Granted
Granted
Granted
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Hualilan
Flor de
Hualilan
Pereyra y
Aciar
Bicolor
Sentazon
Muchilera
Magnata
Pizarro
La Toro
La Puntilla
Pique de
Ortega
Descrubidor
a
Pardo
Sanchez
Andacollo
North of
"Pizarro"
Mine
South of
"La Toro"
Mine
Josefina
Golden Mining S.R.L.
Armando J. Sanchez
Hualilan
Guillermina Armando J. Sanchez
Hualilan
Agu 3
Armando J. Sanchez
Hualilan
Hualilan
Hualilan
Hualilan
Agu 5
Agu 6
Agu 7
El Petiso
Armando J. Sanchez
Armando J. Sanchez
Armando J. Sanchez
Armando J. Sanchez
as above
100% Option
100% Option
100% Option
100% Option
100% Option
100% Option
100% Option
1124-045-S-19 Granted
Granted
30.591.654
414-998-M-05 Granted
2570
721.90
2,921.0
5
1,500.0
0
1443.50 1124-343-S-14 Granted
1500.00 1124-623-S-17 Granted
1459.00 1124-622-S-17 Granted
Granted
18.00
1124-114-S-14 Granted
2478-C-71
ASX Waivers
The ASX granted the Company a waiver from ASX Listing Rule 7.3.2 to permit the notice of meeting (the “Notice”)
seeking shareholder approval for the issue of up to 245,000,001 fully paid ordinary shares in the Company (“Waiver
Securities”) upon the Company satisfying the milestones in relation to each of the Projects (“Milestones”) not to state that
the Waiver Securities will be issued within 3 months of the date of the shareholder meeting.
The Waiver Securities must be issued no later than 60 months after the date of reinstatement of the Company’s securities
to official quotation.
All Waiver Securities agreements were amended, received shareholder approval and have been issued.
68