Challenger Gold (ASX:CEL) is targeting standalone gold production from its Hualilan project in Argentina by early 2029 under a staged development strategy that could lower upfront capital requirements and improve project economics, Euroz Hartleys said in a Sept. 11 note.

Euroz Hartleys sees upside from higher heap-leach recoveries, third-party power funding, and processing-plant upgrades as the phase one operation aims to generate early cash flow with lower upfront capital.

The company is undertaking a 35,000-meter, four-rig drilling program focused on resource growth, reserve conversion and mine-plan optimization, with initial results expected in the fourth quarter and updated resources and reserves targeted for 2027.

The company plans to apply for Argentina's RIGI investment regime in the fourth quarter, targeting approval in the first half of 2027, which could reduce its corporate tax rate to 25% from 35% and provide accelerated depreciation, tax-loss carry-forwards, and greater fiscal stability.

The investment firm flagged financing as the key near-term risk, with the company targeting a refinancing of its $15 million convertible debenture to fund operations through mid-2027 and secure full financing for Hualilan.

The company has effectively discontinued its third-party toll strategy, shifting Hualilan toward standalone development with first production now targeted for 2029.

Euroz Hartleys maintained a speculative buy recommendation on Challenger Gold while lowering the price target to AU$6.30 from AU$6.52.