Challenger Gold Limited (ASX: CEL) has finalized an Investment Protection Agreement (IPA) with the Government of Ecuador for its El Guayabo Project. The agreement grants Challenger Gold legal protections including regulatory stability, dispute resolution via international arbitration, and investment safeguards. The IPA shields US$75 million in investment, encompassing expenditures from the project’s initial acquisition in 2019 through the end of 2027. It has an initial term of 8 years and is renewable. Key provisions include regulatory stability, protection from legal framework changes, non-discriminatory treatment, property protection, and international arbitration based in London.
CEL Managing Director Kris Knauer emphasized the importance of the IPA, stating it offers stability in mining regulations and fiscal terms, security of title and investment, and protection against confiscation. The agreement coincides with recent corporate activity in Ecuador, including the Lumina Gold Corp takeover, as Challenger Gold takes steps to monetize its assets. The company’s Ecuador projects resources have recently increased to 9.1 million ounces of gold equivalent, positioning it as a significant undeveloped gold resource in South America.
CEL’s Ecuador projects, including El Guayabo and Colorado V, have a combined resource estimate of 9.1 million ounces gold equivalent. The El Guayabo project (100% owned) holds 4.7 million ounces, while the Colorado V Project (CEL 50%) contains a maiden MRE of 4.4 million ounces gold equivalent. Net attributable resources to CEL across both projects are 6.9 million ounces gold equivalent. The company highlighted the project’s exploration upside, with the resource based on drilling at five of fifteen regionally significant anomalies. The monetization strategy for CEL’s Ecuador assets includes a potential TSX listing, outright sale, or strategic partnership with a major mining company. Lumina Gold Corp’s takeover by CMOC Group Limited, valuing Lumina at $581 million Canadian dollars, underscores the district’s potential, as Cangrejos is adjacent to CEL’s projects.
