Ongoing Drilling at Hualilan Solidifies Outlook for a Significant Uplift to Recently Reported Maiden MRE

Challenger Exploration (ASX: CEL) (“CEL” the “Company”) is pleased to announce results from recent drilling targeting extensions to the mineralisation at the Company's flagship Hualilan Gold Project, in San Juan Argentina. The results include the first drill holes that were not included in the Company’s recent maiden 2.1 million ounce AuEq1 Mineral Resource Estimate (MRE) which includes a high-grade core of 1.1 Moz at 5.6 g/t AuEq1 .

• First drilling post the CEL's 2.1 million ounce (AuEq)1 MRE significantly expands mineralisation, particularly the high-grade core of 1.1 Moz at 5.6 g/t AuEq1 , in multiple directions.
• Significant intersections outside the current MRE boundary include (see Table 1):
  • 28.5 metres at 5.3 g/t AuEq (5.0 g/t Au, 23.9 g/t Ag, 0.02 % Pb, 0.03 % Zn) - (GNDD-530) Extends the Verde Zone 60 metres below the current resource boundary and GNDD-500 (40 metres at 0.8 g/t AuEq) and demonstrates significantly improved grades at depth
  • 2.4 metres at 64.7 g/t AuEq (60.8 g/t Au, 53.4 g/t Ag, 0.04 % Pb, 7.1 % Zn) - (GNDD-520) Confirmed a high-grade zone at depth in the Verde Zone that remains open at depth and along strike and, based on recent drilling (assays pending), has significant upside potential
  • 6.6 metres at 6.4 g/t AuEq (4.2 g/t Au, 50.0 g/t Ag, 0.01 % Pb, 3.4 % Zn) - (GNDD-536) 24.2 metres at 0.9 g/t AuEq (0.7 g/t Au, 1.7 g/t Ag, 0.02 % Pb, 0.2 % Zn) Intersected a new zone of near surface mineralisation (24.2m at 0.9) and extended the Verde Zone 200 metres below the current MRE boundary (6.6m at 6.4 g/t AuEq)
  • 15.0 metres at 3.9 g/t AuEq (3.9 g/t Au, 3.7 g/t Ag, 0.03 % Pb, 0.2 % Zn) - (GNDD-547) 3.7 metres at 8.5 g/t AuEq (2.6 g/t Au, 50.5 g/t Ag, 4.9 % Pb, 9.3 % Zn) Extends the Gap Zone mineralisation to near surface and intersected a new zone of high grade mineralisation (3.7m at 7.3 g/t AuEq) 50 metres east of the current MRE boundary
  • 14.4 metres at 2.1 g/t AuEq (1,2 g/t Au, 69.4 g/t Ag, 0.06 % Pb, 0.1 % Zn) - (GNDD- 532) 37.0 metres at 1.4 g/t AuEq (1.3 g/t Au, 8.6 g/t Ag, 0.01 % Pb, 0.1 % Zn) 10.9m metres at 2.6 g/t AuEq (2.0 g/t Au, 14.8 g/t Ag, 0.2 % Pb, 0.9 % Zn) Returned significantly higher grades than surrounding holes and intersected a new zone of higher-grade Verde style mineralisation 125 metres below the current MRE boundary
• The maiden MRE was based on 125,700 metres and the Company has now completed 197,000 metres with assays to be received progressively as core is sampled and sent for assay.

Commenting on the first drilling results after the resource, CEL Managing Director, Mr Kris Knauer, said

“We indicated when we released our Maiden Resource Estimate at Hualilan it was very much an interim and we expect it to increase significantly. It was based on 126,000 metres of our 204,000 metre drill program and 2.2 of the 3.5 kilometres of strike, over which the high-grade mineralisation has been intersected. These first results following the Mineral Resource Estimate confirm this.

All the more exciting, is that if assays confirm what we have logged in several recent holes, we have some significant new zones to follow up in addition to the areas we are currently targeting. It now firmly appears that mineralisation at Hualilan will remain open at the end of the current 204,000 metre program."

The MRE was based on 125,700 metres of the Company's 204,000 metre diamond core drill program. The current holes that were not included in the MRE comprise an additional 13,800 metres of drilling. As of this morning the Company has completed 197,000 of the 204,000 metres with results for the next 64,500 metres in the 204,000 metre program expected progressively over the next 4 months.

The results continue to exceed the Company's expectations and confirms that mineralisation remains open in all directions, the majority of the new mineralisation is high-grade, and there is clear potential for the MRE to grow significantly via extension and infill drilling. Several recently completed holes (assays pending) have opened new high-grade targets for extension drilling and the Company believes that Hualilan will remain open in all directions at the completion of the current 204,000 metres.

In addition to the strong results from drilling designed to extend the mineralisation outside the interim MRE boundary several infill holes, often between holes with minimal grade, have returned significant high grade results which is enormously encouraging.

SIGNIFICANT INTERSECTIONS RECEIVED AFTER THE MRE CUT-OFF DATE

GNDD-530 - Verde Zone (South of the Magnata Fault)

GNDD-530 was a test for extensions of the Verde style mineralisation, south of the Magnata Fault, at depth. The hole was collared to test 80 metres below GNDD-500 which intersected 67.6 metres at 0.3 g/t AuEq from 81.5m and 40.0 metres at 0.8 g/t AuEq from 267.0m. GNDD-530 intersected three zones of mineralisation - 28.5 metres at 5.3 g/t AuEq (5.0 g/t Au, 23.9 g/t Ag, 0.02 % Pb, 0.03 % Zn) from 357.5m, 23.0 metres at 0.3 g/t AuEq (0.3 g/t Au, 1.2 g/t Ag, 0.01 % Pb, 0.02 % Zn) from 107.0m, and 54.0 metres at 0.4 g/t AuEq (0.3 g/t Au, 2.0 g/t Ag, 0.01 % Pb, 0.06 % Zn) from 159.0m.

All three intersections extended the mineralisation 80 metres down dip of the current MRE boundary with the deepest intersection (28.5m at 5.3 g/t AuEq) demonstrating significantly improved grades at depth which is becoming common in the Verde Style mineralisation at depth. The second intersection (54.0m at 0.4 g/t AuEq) significantly expanded the width of the mineralisation.

Figure 1 shows the MRE block model in section and GNDD-530. On this section the mineralisation below the US$1800 optimised pit shell was not included in the MRE as it has a grade of less than the 1.0 g/t AuEq cut off used for reporting the underground component of the MRE. This area of the MRE is relatively lightly drilled with additional drilling planned along strike and both up and down-dip. The higher grade mineralisation intersected at depth in GNDD-530, and any additional high-grades in infill and extensional drilling, has the potential to significantly deepen the US$1800 optimised pit shell which would provide a material increase to the current MRE.

Figure 1 - Cross Section GNDD-530

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