Austral Gold terminates agreement for US$1 million
- Austral Gold terminated its toll processing agreement with Challenger Gold, effective Oct. 1.
- Challenger Gold will pay US$1 million to settle the remaining initial fee balance by April 2029.
- The business plans to process its own mining material while seeking new third-party opportunities.
Austral Gold (ASX:AGD) subsidiary Casposo Argentina Mining and Challenger Gold (ASX:CEL) terminated their processing agreement on Oct. 1.
The decision comes after an earlier update on Sept. 10 regarding the processing arrangement.
Challenger agreed to pay Casposo US$1 million on April 2, 2029, or when commercial production starts at its Hualilan Project.
Under the deal terms, accrued interest was waived, but a 6% default interest rate per year applies if payment is late.
The business stated that it does not expect a material financial impact in the current period from ending the contract.
Following the announcement, the Austral Gold share price was unchanged at $0.14, while the share price of Challenger Gold was $1.79.
The Casposo operation maintains an estimated remaining mine life of 74 months based on its June 2025 reserves estimate.
Looking ahead, both mining firms agreed to continue good-faith talks regarding potential mineral purchases and other commercial opportunities.
