Challenger Exploration announced further results from ongoing Phase 1 metallurgical testing at the Company's Hualilan Gold project in San Juan Argentina. The results are extremely encouraging and materially above the Company's expectations. The first test on the low-grade intrusion-hosted mineralisation, which represents the majority of the gold mineralisation at Hualilan, has produced almost 95% gold recovery. Ongoing testing of the concentrate from the high-grade mineralisation has shown it is exceptionally clean and likely to have high payability. Additionally, leach testing of the float tails has shown the potential to significantly increase gold recoveries into the high 90% level. The testing was conducted on a representative composite of the intrusion-hosted mineralisation from the Gap Zone and Magnata grading 1.1 g/t gold 7.0 g/t silver and 0.10 % zinc. The first test produced recoveries of 95% (gold) and 87% (silver) into an attractive gold/silver concentrate from simple gravity separation followed by single stage sulphide flotation at an exceptionally low mass pull of 3.1%. Fine grinding was not required with the results achieved using an 80 micron grind and 65% of the gold was recovered via a gravity into a concentrate grading 283 g/t gold and 693 g/t silver. These recoveries were significantly better than both the historical recoveries on the high-grade material and the Company's initial expectations. This significantly de-risks the project as it confirms a simple and conventional, and low cost, process route is available for the material the Company believes will provide the bulk of the gold mineralisation at Hualilan. The results from detailed analysis of the concentrate produced from the high-grade material show that it is low in all deleterious elements and extremely low in Arsenic. The arsenic content was below the 30 ppm detection level which is rare for a gold concentrate creating the potential for the concentrate to attract a significant premium for blending. Clean gold concentrates are becoming more sought after as environmental regulations tighten regarding importation and processing of concentrates high in deleterious elements. Preliminary discussions with potential off-takers confirm that given its composition, and the good gold grades, the concentrate has a number of advantages over most gold concentrates and it is likely to be highly sought and should achieve a high payability. The Company conducted an exploratory cyanide leach test on the tailings from the concentrate from the high-grade mineralisation. The 5-10% of the gold that was not recovered by floatation was lost into the float tailings. The recovery of approximately 70% of this gold and silver in the float tails via a cyanide leach is a positive, and unexpected, result. This has the potential to increase gold recoveries from the high-grade material into the high 90% range. It also provides the flexibility to target a higher-grade concentrate, and resultant increased payability, while still maintaining high gold recoveries. The first test was conducted on a 4 kilogram sub-sample of a 55.6 kg bulk sample of quarter core from 4 drill holes across the project; GNDD-113, GNDD113A, GNDD155 (Gap Zone) and GNDD157 (Magnata). The bulk sample provides material which has a grades and composition representative of the low-grade intrusion-hosted mineralisation intersected to date. Assays for holes used for the metallurgical bulk sample are shown in Table 1. The weighted average grade of the bulk sample is 1.1 g/t gold, 7.0 g/t silver, 0.01% copper, 0.03% lead and 0.09% zinc.