Adelong Gold (ASX:ADG) agrees to sell remaining 49% stake in Challenger Mines to GDM

Adelong Gold has moved to simplify its asset base and corporate arrangements, executing binding transaction documents to sell its remaining 49% shareholding in Challenger Mines Pty Ltd, the owner of the Challenger Gold Project in New South Wales, to Great Divide Mining Limited in exchange for 10,000,000 fully paid ordinary GDM shares valued at ~$3.1m based on GDM’s most recent closing price of 31 cents.

The agreements formally address outstanding joint venture matters and reshape Adelong’s exposure to the Challenger asset into a listed equity and royalty position.

Highlights

• Consideration of 10,000,000 GDM shares, valued at ~$3.1m based on GDM’s most recent closing price of 31 cents
• Adelong retains a 1% NSR royalty over future gold production, capped at 125,000 oz from the defined Mining Area, with a notional value of ~$7.9m at the current gold price of A$6,320/oz
• Removal of future funding obligations at Challenger and resolution of all claims between the parties other than standard tax indemnities
• Escrow over 5,000,000 consideration shares for 6 months and 5,000,000 consideration shares for 12 months

Under the Share Sale and Purchase Agreement, Adelong will sell its 10,000,000 shares in Challenger Mines Pty Ltd, representing its 49% interest, to Great Divide Mining.

In return, Adelong will receive 10,000,000 fully paid ordinary GDM shares at completion, with completion subject to standard conditions including GDM shareholder approval under Listing Rule 7.1 and all required regulatory and third party consents.

The company notes that the transaction strengthens its balance sheet, maintains exposure to Challenger through both the equity position and the royalty, and allows capital to be directed toward the Lauriston and Apollo gold projects.

A central feature of the package is the 1% net smelter return royalty over future gold production from the defined Mining Area, capped at 125,000 oz.

The royalty commences on the later of completion and the commencement of extraction and recovery of saleable product.

On the equity side, 5,000,000 of the consideration shares will be subject to voluntary escrow for 6 months from the date of issue and a further 5,000,000 will be subject to voluntary escrow for 12 months from the date of issue, and no selective buy back right applies to the consideration shares.

The settlement framework also addresses historical joint venture cash flows, with Adelong to pay $27,288 to Challenger Mines Pty Ltd on completion in relation to tax obligations from a prior non core property sale in Adelong, and the company notes that it has already paid $107,000 as its share of joint venture expenses up to the end of October 2025.

The company will retain the full $455,000 in proceeds from that earlier property sale. In addition, if Adelong proposes to sell or transfer any consideration shares from completion until 18 months after completion, it must first offer those shares to GDM or its nominee, at either the agreed off market sale price or the 5 day volume weighted average price, depending on the method of sale.

Management frames the transaction as providing definition to Adelong Gold’s capital allocation priorities while retaining structured upside if Challenger advances under GDM’s stewardship. Managing Director Ian Holland said

“Finalising this transaction with GDM gives our shareholders clarity and a clean exit from the Challenger joint venture, while still retaining material exposure to any upside through our shareholding in GDM and the royalty. The agreed upon structure improves our balance sheet, removes future funding risk, and allows us to direct capital to the Lauriston and Apollo gold projects.”

The decision comes against the backdrop of a broader portfolio that includes the Apollo Gold and Antimony Project and the Lauriston Gold and Antimony Project in Victoria, where the company is focused on high grade opportunities.

Lauriston, a 28,700 hectare tenement adjacent to the Fosterville Mine, hosts the Comet discovery with drill results including 8.0m at 104 g/t Au and 5.9m at 15.3 g/t Au, and diamond drilling commenced in October 2025 targeting the multi kilometre Comet Trojan corridor.

Apollo, within Victoria’s Melbourne Zone, demonstrates bulk tonnage gold potential with mineralisation open at depth and along strike and hosts antimony bearing stibnite mineralisation.

Adelong also retains exposure to the Adelong Goldfield Project in New South Wales, which covers 70 km² and hosts an 188,000 oz gold resource, and to a strategic lithium portfolio in Brazil that includes tenements in the Lithium Valley and Borborema regions where early exploration has identified pegmatite targets.

Within this context, the Challenger transaction converts a minority joint venture holding into liquid securities and a defined royalty interest.

The indicative timetable points to execution of transaction documents on 6 December, dispatch of the GDM notice of meeting in mid December 2025, shareholder approval in mid to late January 2026, and completion, including issue of consideration shares and entry into escrow and royalty deeds, targeted for late January 2026, with payment of the settlement sum at completion.

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