Austral Gold's new agreement details

Austral Gold (ASX:AGD) has entered into a Toll Processing Agreement with Challenger Gold (ASX:CEL) through its subsidiary, Casposo Argentina Mining Ltd. This deal is expected to generate a new revenue stream for Austral Gold, including a US$3 million fixed payment, a US$110,000 monthly fee, and an additional incentive fee. Operations are scheduled to commence in the latter half of 2025.

Comprehensive overview of Austral Gold's announcement

Austral Gold has secured a Toll Processing Agreement with Challenger Gold, providing a substantial new revenue stream through fixed payments, monthly fees, and incentive-based earnings. The agreement involves processing 450,000 tons of mineralized material over three years at the Casposo Plant in San Juan, Argentina. A US$7 million loan from Banco San Juan S.A. will fund the plant's refurbishment, which is expected to be completed by July 31, 2025. The arrangement is part of Austral Gold's strategy to expand in the Americas by enhancing its production and exploration activities. Additionally, corporate interests are highlighted with Tyrus SA's stake in Challenger. The agreement is pivotal for Austral Gold's growth ambitions, despite inherent risks and uncertainties outlined in the forward-looking statements.

Executive insights on the agreement

This agreement represents a significant milestone for Austral Gold as it aligns with our strategic focus on expanding revenues and operations in the Americas. The fixed payments and potential incentives offer a stable financial outlook as we prepare for the operational phase at the Casposo Plant. We are committed to ensuring successful refurbishment and startup by mid-2025,' said the executive.