Challenger Exploration announced results from the ongoing rock saw channel sampling program at the Company's Hualilan Gold Project in San Juan
province, Argentina. The current results cover approximately 300 metres of strike at Cerro Norte and are the first continuous channel samples taken above ground level in the Hualilan Hills. Results include 15.6m at 71.7 g/t AuEq (70.9 g/t gold, 59.1 g/t silver, 0.2% zinc) including 4.0m at
203.8 g/t AuEq (201.6 g/t gold, 172.0 g/t silver, 0.1% zinc) in the Sanchez Fault approximately 100 metres up-dip from ground level in the Hualilan Hills. Sampling up-dip of previous channel sampling in the main Cerro Norte Manto returned 64.8m at 28.3 g/t AuEq (23.4 g/t gold, 104.1 g/t silver, 8.3% zinc) including 8.8m at 49.3 g/t AuEq (45.2 g/t gold, 88.7 g/t silver, 6.8% zinc) and 26.5 m at 34.4 g/t AuEq (29.3 g/t gold, 114.4 g/t silver, 8.2% zinc). The results include the highest-grade recorded at Hualilan of 2 metres at 301.5 g/t gold, 220 g/t silver, 0.1 g/t zinc with several other samples grading over 100 g/t gold. This supports the Company's model that the highest-grade mineralisation at Hualilan occurs in the 200 metres above ground level in the Hualilan Hills. High-grade mineralization has been mapped in outcrop in the Hualilan Hills over 300 meters of strike at Cerro Norte, 600 meters between the Magnata Fault and Sentazon and 500 metres south of Flor de Hualilan. Should high-grade mineralisation extend 200-300 metres up-dip from CEL drilling over this 1.4 kilometres mapped in outcrop it has the potential to add material high-grace ounces. CEL is acquiring a man portable, rig which will allow the drill out of this significant zone of potential bonanza grade mineralisation. The channel sampling program has been designed to allow the inclusion of the component of the historical high-grade mineralisation which is up-dip of the Company's drilling in a resource estimate that can be reported according to JORC. This includes the majority of the mineralisation within 40 vertical metres of surface and the extensions of mineralisation up into the hills at Cerro Norte and Cerro Sur. In the historical foreign (non JORC compliant) resource estimation, this mineralisation was included based on the results of underground mapping and selective channel sampling. Importantly, this near surface component of the mineralisation generally exhibits high grades. The sampling was done using a rock saw to cut and recover a continuous channel measuring
approximately 4cm x 4cm, with sample weight averaging 4.8 kg per metre. Samples were logged and submitted for assay with QAQC samples (duplicates, blanks and standards) using the same procedure as drill core. The channel sample is analogous to a drill core sample. It is expected that the data can be incorporated into a resource estimation in the same way as drilling results. The Sanchez Fault is one of the main east-west feeder structures believed to control the high-grade mineralisation at Hualilan. The Sanchez Fault has been mapped in outcrop over 500 metres in the
Hualilan Hills however, due to the topography, limited drilling has been completed by CEL testing the Sanchez Fault. Accordingly, it remains a key and under-drilled target at Hualilan, with CEL's current plan to test the Sanchez fault with a man portable rig and from the eastern side of the Hualian Hills
now the Ayen Exploration Licence has been formally granted. Sampling along the Sanchez Fault produced bonanza grades returning 15.6m at 71.7 g/t AuEq (70.9 g/t gold, 59.1 g/t silver, 0.2% zinc) including 4.0m at 203.8 g/t AuEq (201.6 g/t gold, 172.0 g/t silver, 0.1% zinc) and 6.3 metres at 44.0 g/t AuEq (43.4 g/t gold, 22.6 g/t silver, 0.2 % zinc) in SNV10-01. Channel SNV10-02 returned 12.5m at 3.0 g/t AuEq (2.3 g/t gold, 12.4 g/t silver, 1.3% zinc). As Photo 1 shows the channel sampling in the Sanchez Fault is the highest point in the Hualilan hills to be channel sampled by the Company to date and supports the view that the highest-grade mineralisation is in the Hualilan hills above ground level. At Cerro Norte the Main Manto covers at least 400 metres of strike (north south), dips at 30-40 degrees to the west and is generally 2-12 metres thick. The Main Manto includes a number of thicker and higher-grade plunging shoots within its mineralised envelope which plunge to the south-west. In addition to cutting across the high-grade shoots the Main Decline, constructed in 1999 and rehabilitated for the channel sampling, also cuts, and has provided access to, a number of the historical (estimated 1890's) old workings and access drives. Channel sampling was conducted In the Chiflon Adit which is interpreted as a splay fault off the Sanchez Fault which dips steeply south. The results included 9.9 metres at 8.3 g/t AuEq (8.0 g/t gold, 6.6 g/t silver, 0.4% zinc) including 3.1 metres at 22.0 g/t AuEq (21.6 g/t gold, 12.7 g/t silver, 0.6% zinc) - CHNV10-01A. The channel sampling results also continued to highlight broad zones of previously unsampled lower grade mineralisation around the main high-grade mineralisation where sulphides were not evident with channel CHNV10-02 which returned 19.3 metres at 1.2 g/t AuEq (0.7 g/t gold, 8.6 g/t silver, 1.0% zinc) an excellent example. The sampling In the Dona Justa Pit also demonstrated the broad zones of lower grade mineralisation surrounding the higher-grade mineralisation that was missed. Channel sampling the walls of the Dona Just Pit (the lower grade material which was left after what was classed as ore grade mineralisation in the later 1800's was mined) returned 59.5 metres at 4.5 g/t AuEq (2.2 g/t gold, 11.2 g/t silver, 5.1% zinc) - DJNV10-01A. High-grade mineralization has been mapped in outcrop in the Hualilan hills over 300 meters of strike at Cerro Norte, 600 meters of strike between the Magnata Fault and Sentazon and 400 metres south of Flor de Hualilan. Limited reconnaissance by CEL has confirmed this high-grade mineralisation in outcrop including the presence of visible gold in outcrop at the projected up-dip extend of the high- grade mineralisation at Magnata. The channel sampling results support the model that the highest grades at Hualilan occur above surface in the 200-300 metre zone between the Company's drilling and the mineralisation outcrop. The most notable result is the15.6m at 71.7 g/t AuEq in channel SNV10-01 which is the most up-dip channel yet to be taken. Given the topography this 200-300 metres of up-dip potential, which has been mapped over 1.4 kilometres of strike, has not been drilled. Should bonanza grade mineralisation extend 200-300 metres up-dip from CEL drilling over the entire 1.4 kilometres over which mineralisation is mapped in outcrop it has the potential to add material high-grace ounces. The Company is acquiring a man portable, rig which will allow the drill out of this zone of potential bonanza grade mineralisation.