Shared processing capacity: ore toll milling in San Juan
It started milling in May 2026 and in June out came 200 kilos of doré. The interesting part is not the gold: it is whose plant it is. Challenger Gold put its Hualilán deposit into production in another miner's mill —Casposo, of Austral Gold, idle since 2019 and rehabilitated with USD 7 million—, with 150,000 tonnes a year guaranteed over three years. It is the first ore toll milling agreement between miners in Argentina. And the number that explains it all is the comparison: starting this way cost USD 8.9 million of initial capital; its own plant asks for USD 232 million. The same deposit enters production with 26 times less capital. On the other side, the province has ore waiting: Del Carmen declares 366,000 ounces of gold equivalent and has nowhere to mill them.
What the market is made of
This split is different from every other in the observatory, and it is worth saying why. Today San Juan's toll milling service is entirely captive: there is one plant providing it and one client, on a three-year contract. What is addressable is not that contract: it is the ore that still has nowhere to go.
The rule that moves it
Here the law does not create the market, but it decides who invoices it from within the province: Each one opens its own page, with the rule, since when it applies and its primary source.
enablesSan Juan: 80/60 local mining procurementThe Local Mining Development Law does not regulate toll milling, but it does define who may count as a local supplier against the targets of 60% purchasing and 80% employment. For a plant operator with idle capacity that works in its favor: the plant is an authorized operating establishment in the province, which is precisely the hardest requirement for a service provider coming from outside. A mill based in San Juan meets article 12 almost by definition.see the reform →Why this market exists
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 keptThe engine · what generates this demand
This market does not float on its own: concrete megaprojects drive it. These are the ones moving demand for this niche — each with its investment and status.
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 →The niche in depth
Who splits the market, where you get in, what pays and what could break it.
already in
split
It rehabilitated with USD 7 M a plant idle since 2019 and turned it into the country's first toll milling business, with an anchor client and a guaranteed annual volume. It charged for its mill, not for its reserves. As long as it is the belt's only available mill, it sets the price.
It is the trade's structural competitor: toll milling is for starting, not for staying. Challenger has already published the PFS of its own plant — USD 232 M of startup capital for twelve years of production prob. When the deposit justifies the investment, the client leaves. A toll milling business is built on client rotation, not on loyalty.
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 belt's small deposits. There is no installed local supply today — the provincial analysis itself declares it a gap.
This niche's gap is not about service: it is about the asset. What San Juan lacks is grinding and flotation capacity available to third parties, and it is worth saying why the large plants do not cover it:
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 this case: Casposo was out of service since 2019, was rehabilitated with USD 7 million and became the country's only provider. It charged for its mill, not for its reserves.
And the barrier that is not technical: entering means quoting blind. With no public tariff, the newcomer sets a price against an incumbent who already knows it and does not say it.
The entire service today: Casposo is the only plant providing toll milling in the province and holds the only contract that exists, with the volume committed for three years. While that agreement lasts, the San Juan toll milling market is not addressable.
USD 1.7-3.0 M/yr of ore freight, plus toll milling for the deposits that today have nowhere to go — not quantified for lack of a public tariff, but whose physical size is known: Del Carmen declares 366,000 ounces of gold equivalent, and to that add the Hualilán satellites, Jagüelito and the Calingasta veins.
The realistic entry is not buying a plant: it is mobile crushing and modular grinding, which move to the ore and do not demand the sunk capital of a fixed plant. There is no installed local supply.
When you get paid, and what blocks it
effect
It is the niche that carries furthest the idea that an idle asset is not scrap: Casposo had been out of service since 2019, was rehabilitated with USD 7 million and its restart sustains more than 300 jobs, 99% from San Juan. The trades are plant trades and among the best paid in provincial mining —mill operator, flotation operator, mechanical and electrical plant maintenance, process control, laboratory— and they are perpetual as long as there is ore to grind, unlike construction jobs. And there is a second-order effect that is the whole argument: every toll milling agreement turns a small deposit, which alone did not justify a plant, into an operation that employs and buys. Symmetric risk, stated plainly: employment at a toll milling plant depends on it finding the next client when the current one builds its own, and today the market has one seller and one buyer. thesis
calculate it
Concentration It is the most concentrated market in the observatory, and in the strangest way: there is one seller and one buyer. Casposo is the only plant providing the service and Challenger the only client. That does two things at once: it gives the seller pricing power no other niche has, and it makes it fragile, because when that client builds its own plant the market goes back to zero. Potential demand, by contrast, is atomized: the belt's small deposits, each too small to justify its own plant and all of them together enough to fill several.
Who really pays?
This market has two possible clients and they are not the same business:
It is the contract that already exists, and it processes from 1 May 2026 with the first gold pour in June. What the client buys is not milling: it is entering production without putting up the capital of a plant.
The guaranteed volume travels 165 km of paved road. It is a market that did not exist before: the toll milling agreement created it, because ore processed at its own deposit does not travel.
Del Carmen declares 366,000 ounces of gold equivalent with no plant and its re-tender was awarded in October 2025 with USD 56 million of exploration committed over three years. Add the Hualilán satellites, Jagüelito and the Calingasta veins. There is no local supply to serve them today.
What we watch · when to enter
This is not «what breaks it»: it is the dashboard for entering at the right moment. And here the indicator is uncomfortable, because what closes the market is the client's success.
Toll milling is for starting, not for staying. The client that today sustains the country's only contract has already published the study for its own plant —1.5 million tonnes a year of flotation plus an 8 million tonne heap leach circuit— and its feasibility study is under way. The day it takes the investment decision, the toll milling contract ends and the market is left without a client. What has to be watched in parallel, and is what would replace it, is the exploration of Del Carmen and Jagüelito: awarded in October 2025 with USD 56 million committed over three years and an option to mine. If it confirms, the next feed appears; if not, the market depends on a single contract.
Toll milling is for starting, not for staying. Challenger has already published the study for its own plant: USD 232 million of startup capital for twelve years of sustained production prob. The day the deposit justifies that investment, the toll milling contract ends. A business like this is built on client rotation, not on loyalty.
We searched the two primary sources of the country's only agreement and neither publishes a processing fee or a cost per tonne. Anyone wanting to enter has to set a price against an incumbent who already knows it and does not say it. It is this niche's declared gap and it is not filled with a guess.
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.
Del Carmen and Jagüelito were re-tendered in October 2025 with USD 56 million of exploration committed over three years and an option to mine. Until that exploration confirms, future toll milling demand is a thesis, not a pipeline.
How the number is built · and how fresh each data point is
This niche's model is not a revenue formula: it is a capital comparison. It is what decides whether a small deposit enters production or stays on paper.
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
How we validate this figure
Here we did something unusual: we deliberately left the main number uncalculated. The toll milling service —charging to grind someone else's ore— has no public tariff in Argentina, and we are not guessing: we went to the two primary sources of the only agreement that exists and neither publishes the price. The article announcing the first pour gives the volume verbatim, the doré and the ounces, and gives no processing fee and no cost per tonne; the one carrying the economics of the standalone plant does not even mention the agreement. So the price gap is verified by absence in the source, not assumed — and the service TAM is not quantified. What this page does quantify is the ore freight, the only block with a defensible price, and what it does measure in physical units is the market: how many tonnes move and how much ore has no plant. And we expressly leave out the deal's projected economics, because our own survey flagged them as unreconciled: two communications from the same company give results that do not add up. A bigger number would be more sellable and less true.
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
Neighboring niches · Mine core
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