Shared processing capacity: ore toll milling in San Juan
In May 2026 it started milling and in June out came 200 kilos of unrefined gold and silver bar. On 1 October 2026 the contract was terminated. Challenger Gold put its Hualilán orebody into production in another miner's mill —Casposo, owned by Austral Gold, idle since 2019 and refurbished for USD 7 million—, processed 39,342 tonnes in two months and on 13 August 2026 announced it is leaving that scheme. It was the first shared-processing agreement between miners that we know of in Argentina, it lasted four months, and it left two things worth more than the contract. The first is the price, published line by line: milling a tonne cost USD 75.00, plus the recovery premium, plus USD 8.06 for the right of use of the plant and USD 17.50 of haulage — USD 133.28 per tonne all in. The second is the proof that the scheme works: the agreement's study calculated that starting this way would cost USD 8.9 million; its own plant requires USD 267 million. The same orebody entered production through someone else's mill, with planned capital thirty times smaller, and left when it could pay for its plant. That is exactly the shape of this business: the good client does not stay. On the other side the province still has ore waiting, and the mill is still permitted, running and looking for clients.
The only agreement that ever existed lasted four months: it started milling on 1 May 2026, processed 39,342 tonnes and closed its campaign on 30 June.See the clocks that are running, one by one
On this page
Who really pays?
This market has two possible clients and they are not the same business — and today neither of the two is buying:
It was the contract that existed: it processed from 1 May 2026 and closed its campaign on 30 June with 39,342 tonnes verif. What the miner was buying was committed capacity —450,000 tonnes over three years, some 150,000 a year— and what it paid is published verif. The client announced its exit in August 2026 verif and the contract was terminated with effect from 1 October 2026; what is still being negotiated in its place is a purchase of ore, not yet signed verif.
The ore travelled 165 km of sealed highway between Hualilán and the plant, and haulage was charged separately from processing: USD 17.50 per tonne, published in the agreement's study. With the end of the contract that haulage stopped running. That it was a new market, created by toll milling because ore processed at its own mine site does not travel, is our own reading thesis.
The small deposits of the Andean belt are not clients yet, and they are the reason this niche can exist again. The Del Carmen and Jagüelito areas, in Iglesia, were awarded in October 2025 to a joint venture led by Veladero's Chinese partner, with USD 56 million of exploration committed over three years and the possibility of moving to mining. Until that exploration confirms, there is nobody to sell to.
Which projects move this demand
Reactivation and deepening of the Gualcamayo gold and silver mine (San Juan): the 'Deep Carbonates (DCP)' project extends the mine life toward the sulfide orebody at depth…
see the project →Engineering, construction, operation and maintenance of new leach pads (phases 8 and 9) at Veladero Mine, to sustain gold production and exports…
see the project →When the window opens
This market opens and closes on a single fact: whether there is a miner with a deposit and no plant. These four numbers say when the next one turns up.
See the evidence
Toll milling is for starting, not for staying, and this time there is a measurement: the only client that ever existed lasted four months.
See the evidence
It is the niche's real risk and it has already materialised. It replaces the one this entry used to list —«there is no public tariff»— which turned out to be false. With a single provider and a single client, one of them leaving switches off the whole market: there is no portfolio to absorb the fall.
See the evidence
Veladero and Gualcamayo have processing infrastructure at scale, but they leach: in valleys and in heaps. The toll milling this market calls for is grinding and flotation of high-grade veins. Counting the province's capacity without separating circuits gives a number that means nothing.
A fixed plant amortizes over years and its client base changes. That is why the viable shape is probably not another plant, but modular grinding and mobile crushing, which move to the ore.
See the remaining risk
The Del Carmen and Jagüelito areas were awarded in October 2025 with USD 56 million of exploration committed over three years and the possibility of moving to mining prob Diario de Cuyo.
See the evidence
The opportunity in depth
The opportunity in depth
Installed capacity is not compatible capacity. Veladero and Gualcamayo process at scale, but they leach: in valleys and in heaps. The toll milling this market calls for is grinding and flotation of high-grade veins. Counting the province's capacity without separating circuits gives a number that means nothing.
The viable shape is probably not another fixed plant. A plant is sunk long-term capital against rotating demand —the good client leaves when it grows—. Modular grinding and mobile crushing move to the ore instead of waiting for the ore to come, and there is no installed local supply today.
An idle asset is not scrap. That is the lesson of the case: Casposo had been out of service since 2019, was rehabilitated with USD 7 million and became the only provider we know of in the country. It earned value from its mill, not from its reserves.
And the barrier that does not exist: there is something to bid against. Entering this business is not done blind. The tariff is published and remains published even though the contract has ended: USD 133.28 per tonne all in, broken out into treatment, recovery premium, right of use of the plant, haulage and general expenses. It is the only published toll-milling price we found in the country.
When you get paid, and what blocks it
already in
split
It refurbished a plant idle since 2019 for USD 7 M and turned it into a toll-milling business, the first we know of in the country, with a single client.
See the evidence
It is this business's structural competitor: toll milling is for starting, not for staying. In May 2026 Challenger published the pre-feasibility study for its own plant: some USD 267 million of pre-production capital with contingency, for a mine life of 14.25 years verif.
See the evidence
Veladero and Gualcamayo have processing infrastructure at scale, but their circuit is valley and heap leaching, not grinding and flotation of high-grade veins: it is not the same service and it does not work for the same ore. Capacity exists in the province; compatible capacity is a different thing.
It is the shape the market would take if someone built it: modular grinding and flotation, mobile crushing, and toll-milling contracts for the small deposits around it. There is no installed supply today — the provincial analysis itself declares it a gap.
The jobs it createsIt is the niche that carries furthest the idea that an idle asset is not scrap: Casposo had been out of service since 2019, was refurbished with USD 7 million and produced gold again.the detail on jobs and trades
The only plant that provided the service in the province is still a single one —Casposo— and today it mills its own ore. For as long as there was a service, it took 100 % of a market that had a single client. estim
What is addressable is not the contract that ended: it is the next one. The ore that today has nowhere to go —Del Carmen and Jagüelito, with USD 56 million of exploration committed prob and ounce resources with no open source— plus the small deposits of the Andean belt. With no signed contract it has no size. thesis
The realistic way in is not buying a plant: it is mobile crushing and modular milling, which move to the ore and are written down against a rotating portfolio instead of against a single client. With no contract in force, no figure can be put on it. thesis
Why we do not put a number on it The only contract that existed —and that was the whole market— has ended, and the issuer withdrew the validity of the study that quantified it. There is no contract in force against which to measure an entry share, and the business that would replace it —buying ore instead of charging to mill it— is not signed and is in any case a different business, with a different risk. Putting a figure on it today would mean annualising a contract that is no longer running.
calculate it
The number is our own estimate. The calculation, step by step, is below.
The full calculation, step by step
Concentration It was the most concentrated market in the province, and in the strangest way: there was one seller and one buyer. Casposo was the only plant providing toll milling in the province and Challenger its only client. Today there is no service: the contract was terminated with effect from 1 October 2026 and the mill keeps processing its own ore. What is still true, and the mill's owner says so, is that Casposo is one of the few plants permitted and in operation in the San Juan region — so the next small parcel of ore that turns up will again have a single counterparty.
The rule that moves it
Here the law does not create the market, but it decides who invoices it from within the province:
See the underlying reading
The underlying policy that opens up this demand. It is the same inference declared by the rules and the program pillars pushing in this direction.
the RIGI promise is keptSee the full legal grounds
Where the number comes from
⛔ No result in force: on 10 September 2026 the issuer itself declared superseded the study the volume and the term came from, so there are no annual tonnes to multiply against. What still stands is the unit price: USD 133.28 per tonne all in, at a recovery of 84 %.
See the calculation, the variables and how it was validated
The arithmetic this page used to publish is built from two things and both were in the same document: what the tonne costs and how many tonnes a year. The document is still public, but its issuer declared it superseded on 10 September 2026, so the result is withdrawn and what is kept are the unit prices, which are the only part that does not depend on the contract still running.
The number rests on a few variables. The formula shows how it moves when each one changes; and each variable carries its freshness seal — how often it is worth revisiting. estim
This market had a single contract that we know of in the country, and that contract has ended. It is not us saying it — it is the issuer:
| when | which document, and what it says |
|---|---|
| 13 August 2026 | Challenger Gold announces to the market *«a disciplined transition away from the current third-party plant treatment model»* |
| 9 September 2026 | Austral Gold, owner of the mill, confirms that the replacement *«is under discussion»* and that it will inform the market *«if and when a binding agreement is signed»* |
| 10 September 2026 | Challenger states that the projections of its own 2025 toll-milling study *«are superseded and should no longer be relied upon»* |
| 11 September 2026 | its half-year accounts write off in full the right of use of the plant: recoverable value nil, A$4,678,199 charged to profit and loss |
| 2 October 2026 | Austral Gold announces that the two companies terminated the toll-milling contract with effect from 1 October 2026, and that they continue to discuss in good faith a possible agreement for Casposo to buy ore from Hualilán |
Coverage: the rosters of San Juan's two mining supplier chambers —187 CASEMI members and 40 published by CAPRIMSA, none of which declares grinding— and the documents of both parties to the only toll-milling agreement we identified in the country · Sep 14, 2026 · not reviewed: those rosters are not the universe of supply —in that same province there is a lime works with four kilns that appears in neither of the two— and there is no public register listing how many idle grinding and flotation plants there are
How to cite this figure: Despegue (2026). Shared processing capacity: ore toll milling in San Juan · San Juan. despegueargentina.com/en/san-juan/procesamiento-compartido-maquila-mineral · terms of use
Neighbouring markets3 markets in the same group, from USD 4,3 to USD 60 M a year
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