Key Highlights

  • Challenger Gold closed the first Tranche of its convertible Debenture offering with gross proceeds of US$15 million before costs.
  • The company has secured agreements for total gross proceeds of US$30.3 million, and the board may raise up to US$35.0 million.
  • The second tranche requires Shareholder approval, with a general meeting targeted for the end of November 2026.

Challenger Gold Limited (ASX:CEL) has announced that the first tranche of its convertible debenture offering has closed, with gross proceeds of US$15 million before costs. The company said it has secured agreements for total gross proceeds of US$30.3 million, and that the board may raise up to US$35.0 million. The balance of the secured amount, about US$15.3 million on the company's figures, forms the second tranche, which has not yet been completed.

Terms of the debentures

The debentures are unsecured and issued in units of US$100,000. Holders may convert them into fully paid ordinary shares, with an initial conversion price for all debentures of A$2.72 a share, subject to adjustments. The company charged a 3 per cent establishment fee. Investors who chose to take shares instead of cash received 159,511 ordinary shares, which were issued on 23 October 2026.

The announcement does not state the Interest Rate or Maturity date, and refers to a cleansing notice released on the same day. Only some investors are named: US$9.3 million of the proposed proceeds relates to debentures to be issued to an affiliate of Mr Peter Marrone, or his nominee, and affiliates of Mr Eduardo Elsztain. That portion is part of the second tranche. Other investors are described only as eligible investors.

Conditions for the second tranche

The second tranche requires shareholder approval at a general meeting, including any approval needed under the ASX Listing Rules. Challenger Gold (ASX:CEL) is targeting a meeting at the end of November 2026. The company says the offering may not occur on the terms described, or at all.

How the money will be used

Challenger said the proceeds will go towards initial Capital and project-readiness activities for the Hualilan development. These include down payments for long-lead-time equipment, detailed engineering and project management. The money will also support work on an updated pre-feasibility study, which is assessing whether the production schedule can be brought forward, whether leach recoveries can be improved and whether initial capital can be reduced through potential third-party construction of the project powerline.

The announcement describes the proceeds as funding planned activities. The assessments are still under way, and their outcomes, including any effect on schedule, recoveries or capital cost, depend on completion of the study.

Funding runway and wider financing

Based on current assumptions, Challenger expects the proceeds to fund planned activities to mid-2027. The company is targeting completion of the full Hualilan project financing by that time. It also stated that there is no certainty that the full financing will be secured within that timeframe or on acceptable terms.

Risks

Beyond the shareholder and ASX approvals needed for the second tranche, the company lists market conditions, documentation, conditions precedent and the level of actual expenditure as factors that could affect outcomes. The debentures are convertible at A$2.72 a share, and conversion would result in new shares being issued. The announcement does not quantify the potential number of shares across all tranches, and it does not give a project capital estimate, a construction decision or a production date.

What comes next

The milestones in the announcement are the general meeting targeted for the end of November 2026 to approve the second tranche, completion of the updated pre-feasibility study, and the company's aim of finalising the full Hualilan financing by mid-2027.