Challenger Exploration announced further results from ongoing metallurgical testing at the Company's Hualilan Gold Project in Argentina. Follow up metallurgical testing on low-grade intrusion-hosted mineralisation, which represents the majority of the gold mineralisation at Hualilan, has significantly increased the concentrate grade whilst still maintaining gold recoveries above 90%. The testing which involved a regrind of the rougher sulphide concentrate followed by two cleaning stages produced a best concentrate grade of 53.6 g/t gold and 284g/t silver at recoveries of 93.4% (gold) and 70.4% (silver). Preliminary discussions with potential off-takers confirm that payability of this concentrate will be significantly higher than the 31.4 g/t concentrate produced in the Company's earlier testing and should result in payability above 90%. The results are extremely encouraging and materially above the Company's expectations. The results demonstrate that the excellent metallurgical characteristics of the lower-grade intrusion-hosted mineralisation provides several significant benefits beyond high payability including, lower concentrate transport costs, a simple flow sheet with the ability to control targeted concentrate grades, and operational flexibility. Exploratory cyanide leach testing of the cleaner float tails from the intrusion-hosted material has commenced. Should leaching recover 70% of the gold and silver in the tails, achieved in the high- grade mineralisation, the potential exists to increase gold recoveries above 95 percent. Additionally, CEL is waiting on the results from the analysis of the concentrate composition to confirm that, like the concentrate from the high-grade material, is low in arsenic and other deleterious elements. The testing was conducted using a 55.6 kg composite bulk sample of the intrusion-hosted mineralisation from the Gap Zone and North Magnata. The bulk sample provides material which has grades and composition representative of the low-grade intrusion-hosted mineralisation intersected to date and was designed to be representative of the intrusion mineralisation. The bulk sample was taken from quarter core from 4 drill holes across the project; GNDD-113, GNDD113A, GNDD155 (Gap Zone) and GNDD157 (North Magnata). As previously reported, core interval assays for holes used for the metallurgical bulk sample. 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. Test F8 was a repeat of the first test conducted on the intrusion-hosted material Test F7, which involved simple gravity separation followed by single stage sulphide flotation at a P80 = 76 micron grind, with the addition of regrind of the rougher concentrate to P80 = 17 microns followed by two stages of cleaning. The test was undertaken using a 4kg sample of the intrusion hosted composite. The results were outstanding producing a high-grade concentrate containing 53.6 g/t gold and 284 g/t silver with recoveries of 93.4% (gold) and 70.4% (silver). The fine regrind and addition of the second cleaning stage produced a small (1.4%) reduction in gold recovery at a significantly lower mass pull of 2.1%, down from 3.1% in test F7 where the fine regrind and second cleaning stage were not utilised. Similar to all testing at the Hualilan Gold Project, the recovery via simple initial gravity separation was impressive. Gravity separation consisted of a Knelson Concentrator followed by a Mozely Table, recovering 71.8% of the gold in test F8. The final rougher concentrate tailings grade of 0.03 g/t gold and 0.80 g/t silver are exceptionally low and correspond to a combined gravity and bulk rougher gold recovery of 97.8% (gold) and 91.5% (silver). The bulk of the copper (65.4%), lead (67.8%) and zinc (82.3%) were recovered into the bulk rougher concentrate, however testing is yet to target recoveries of the base metal credits from the intrusion-hosted material. The low (8%) mass pull into the bulk rougher concentrate was in line with the earlier testing. Accordingly the regrind of the rougher concentrate to P80 = 17 microns prior to cleaning will only require a small regrind circuit. The increase in the gold grade of in the concentrate by approximately by 20 g/t is material and preliminary discussions with off-takers have indicated this will increase payability from approximately 80% for the F7 concentrate to above 90% inclusive of all treatment charges and penalties. The 70% increase in the concentrate grade is expected to materially decrease the concentrate transport cost which can be a significant component of cash cost when a concentrate is produced. Test F10 was similar to test F8 with a simple gravity separation and single stage sulphide flotation at a P80 = 76 micron grind followed by the regrind of the rougher concentrate to P80 = 19 microns. However, F10 was was undertaken using a larger (12 kg) sample with the 2nd cleaner circuit in F10 set up with three incremental cleaner stages to give a guide to floatation kinetics. Gravity separation was again impressive with gravity separation recovering 61.7% (gold), 15.5% (silver), and 41.4% (lead) into a gravity concentrate grading 418 g/t gold, 1037 g/t silver and 15.5% lead. The rougher concentrate tailings grades of 0.03 g/t gold and 0.80 g/t silver were the same as test F8 which is exceptionally low and corresponds to a combined gravity and bulk rougher gold recovery of 97.4% (gold) and 93.1% (silver). The majority of the copper (64.5%), lead (84.5%) and zinc (78.2%) credits were recovered into the combination of the bulk rougher and gravity concentrate. The mass pull at 7.6% was slightly lower than the results of F8 and confirmed that should this process route be used the regrind circuit required will be small and relatively inexpensive. Should the exploratory cyanide leach testing of the various cleaner float tails from the intrusion hosted material, which has commenced, return similar results to the high-grade material the theoretical recovery from Test F10 producing the high-grade (46.8 g/t gold and 375 g/t silver) concentrate, would be 95.6% (gold) and 87.4% (silver).