Transcription of The Stock Network Interview with Challenger Gold (ASX:CEL), CEO and Managing Director, Kris Knauer
Lel Smits: Challenger Gold is a gold and copper exploration company with ambitions to become a globally significant gold producer. The company is advancing two complementary projects in South America, the Wally Land Gold Project in Argentina and the El Guabo Project in Ecuador. Challenger’s near-term focus is the high-grade, low capex Wally Land development.
Ahead of presenting at the Ignite Investment Summit in Hong Kong, CEO and Managing Director Kris Knauer joins me to discuss Challenger’s path to production and strategic optionality. Kris, welcome to the Stock Network.
Kris Knauer: Thanks, it’s great to be here, Lel.
Lel Smits: Now, with coal mining at Wally Land now fully permitted and production expected to commence in the final quarter of this calendar year, how does this milestone position Challenger for near-term cash flow and operational readiness?
Kris Knauer: Yeah, look, it’s a big milestone. Effectively, we transitioned from an explorer slash developer to a producer. It gives us the cash flow we need to effectively create the larger operation.
So, what we’ve got at Wally Land is a 2.8Moz resource. We’re tolling a small portion of that, about 3% through a mill down the road, generates us around about $160M EBITDA over 3 years. It’s sort of $3,500 Gold, and then that provides the cash that lets us go and develop standalone operations at Wally Land, which turns us into a plus 150,000oz Gold producer, at which point we’re a fairly significant Gold company.
Lel Smits: Excellent. Now, Challenger’s portfolio spans Argentina and Ecuador with both high-grade and bulk tonnage Gold-Copper potential. How is the company leveraging this diversified project base and recent regional M&A activity to enhance shareholder value and growth prospects?
Kris Knauer: I mean, the M&A activity has really been around Ecuador, and what’s happened there is we’ve got 9Moz, and that 9Moz is the other half of a 25Moz deposit that was recently acquired by CMOC or China Moly.
They have paid the equivalent of $25 an ounce for that project. You drag that across to our 9Moz, you’re looking at about $170M net to us. Really, at the moment, what that regional M&A activity has done is it’s got the market looking at that project.
Really, before that happened, we were getting zero value for it, and we’re now getting pretty much close to zero value as well. But it potentially unlocks the value of that project, whether it be a sale to CMOC. We’ve had a couple of other groups approach us wanting to acquire it, whether it’s a listing in Canada.
What that’s done is that’s taken an asset where we’ve got a big bulk 9Moz that sits next to a large deposit, and all of a sudden, we’ll get some value for that project. So we’ll deal with that project in the next 12 months and get maximum value for shareholders.
Lel Smits: Well, Kris, thank you for the update from Challenger, and look forward to hearing more at the Ignite Investment Summit in Hong Kong.
Kris Knauer: And again, thanks for having me here. I appreciate it.
Ends