Challenger Exploration : Intercept of 67.7m at 7.3g/t Gold from Verde Zone

ASX Release

15 February 2021

For personal use only

Intercept of 67.7m at 7.3 g/t gold confirms the Verde Zone as a

continuous 1.5 kilometre zone of mineralisation

Highlights

• Assays from the next series of Verde Zone drill holes which cover 1.5 kilometres strike return several significant intercepts confirming that the Verde Zone, at the Company's flagship Hualilan Gold Project, is a discovery of scale.
• Results include (refer Table 1):

▪ 67.7m at 7.7 g/t AuEq2	- 7.3 g/t Au, 5.7 g/t Ag, 0.6% Zn from 300.4m including
32.1m at 15.9 g/t AuEq2	- 15.2 g/t Au, 10.9 g/t Ag, 1.2% Zn from 335.9m including;
0.5m at 834 g/t AuEq2	- 833 g/t Au, 104 g/t Ag, from 335.9m and
1.4m at 24.4 g/t AuEq2	- 21.0 g/t Au, 84.7 g/t Ag, 5.4% Zn from 362.9m (GNDD-458);
▪ 51.0m at 1.5 g/t AuEq2	- 0.9 g/t Au, 15.2 g/t Ag, 0.9% Zn from 141.0m including
4.6m at 14.3 g/t AuEq2	- 8.3 g/t Au, 162.7 g/t Ag, 9.0% Zn from 187.4m and;
23.6m at 0.7 g/t AuEq2	- 0.7 g/t Au, 0.9 g/t Ag, from 209.4m (GNDD-376);
▪ 37.8m at 1.0 g/t AuEq2	- 0.9 g/t Au, 2.0 g/t Ag, 0.2% Zn from 94.0m including
9.0m at 3.2 g/t AuEq2	- 2.9 g/t Au, 4.9 g/t Ag, 0.5% Zn from 106.0 and;
26.0m at 0.6 g/t AuEq2	- 0.6 g/t Au, 1.0 g/t Ag, 0.1% Zn from 50.0m (GNDD-439);
▪ 26.6m at 2.2 g/t AuEq2	- 2.2 g/t Au, 0.8 g/t Ag from 348.5m including;
4.2m at 12.7 g/t AuEq2	- 12.6 g/t Au, 2.7 g/t Ag, from 356.8 (GNDD-437).

• The intercept of 67.7 metres at 7.7 g/t AuEq was from a 200 metre strike section of undrilled Verde Zone. Follow-up holes targeting strike and dip extensions are underway.
• In addition to wide zones of Verde style mineralisation drilling intercepted significant zones of high-grade mineralisation at depth with mineralisation remaining open at depth.
• Many holes continued to encounter multiple stacked zones of mineralisation and intersections of steeper and shallower dipping mineralised zones.

Commenting on the results, CEL Managing Director, Mr Kris Knauer, said

"The results from the next series of Verde Zone drill holes have again significantly exceeded our expectations. The intercept of 67.7 metres at 7.3 g/t gold, 5.7 g/t silver and 0.6% zinc is world class. Especially given it comes from the middle of the undrilled section of the Verde Zone. We now have 2 of the 9 drill rigs on site following up this hole.

Additionally, as we drill deeper the results are confirming the presence of stacked zones of mineralisation at Verde and that we are intercepting higher-grade mineralisation at depth."

Challenger Exploration Limited	Issued Capital	Australian Registered Office	Directors	Contact
ACN 123 591 382	979.4m shares	Level 1	Mr Kris Knauer, MD and CEO	T: [phone]
ASX: CEL	48.0m options	1205 Hay Street	Mr Scott Funston, Finance Director	E: [e-mail]
	120m perf shares	West Perth WA 6005	Mr Fletcher Quinn, Chairman
	16m perf rights		Mr Sergio Rotondo, Exec Director

www.challengerex.com

ASX Release

15 February 2021

For personal use only

Challenger Exploration (ASX: CEL) ("CEL" the "Company") is pleased to announce the results from 64 holes and three drill hole extensions from its Verde Zone extension drill program at the Company's flagship Hualilan Gold Project, in San Juan Argentina. A total of 65 of the 67 drill holes (97%) intersected significant gold mineralisation with 51 of 69 holes (74%) intersecting at least 10 grams x metres of AuEq mineralisation. This infill and extension drill program is ongoing with 4 of 9 drill rigs currently turning on the Verde Zone.

The results from the current drilling has again exceeded the Company's expectations and confirms:

• Verde is one continuous zone of mineralisation at least 1.5 kilometres long which is yet to be closed off at depth or along strike;
• multiple stacked zones and intersections of steeper and shallower dipping of mineralised zones in the majority of the Verde Zone holes;
• strong mineralisation in the final 200 metres of the 1.5 kilometres strike to be drilled with GNDD-458 intersecting 67.7m at 7.7 g/t AuEq. The best hole drilled on the Verde Zone;
• Several zones of higher-grade mineralisation including 6.7m at 6.0 g/t AuEq (GNDD-359)4.8m at 8.8g/t AuEq and 2.0m at 9.4 g/t AuEq (GNDD-361), and 26.6m at 2.2 g/t AuEq (GNDD-437).
• The deeper zones of higher-grade mineralisation will become increasingly important as Verde continues to extend at depth beyond the limits of what may be amenable within an open pit.

THE VERDE ZONE

The Verde Zone is a recent discovery targeted using surface magnetics and IP (Induced Polarization) at the Hualilan Gold Project. The discovery hole (ASX release 2/3/21) returned 125.5 metres at 1.1 g/t AuEq including 71.0 metres at 1.8 g/t AuEq (GNDD-169). The Verde Zone covers 1.5 kilometres strike between the Magnata and Sanchez Faults and mineralisation remains open along strike and at depth.

Mineralisation in the Verde Zone is oriented north-south, is 50 to 100 metres wide, and is hosted by bedding parallel fault-fracture zones in sediments and steeply dipping fracture zones in intrusives. A lower grade halo of mineralisation extends into the overlying sedimentary rocks which have been locally brecciated by the hydrothermal fluids during mineralisation. The overlying mineralisation in the sedimentary rocks dips to the west at 30-50o and is up to 50 metres thick. This overlying halo of lower grade mineralisation is a useful exploration guide to vector to the deeper intrusion-hosted mineralisation.

ONGOING VERDE ZONE DRILL PROGRAM

The infill and extension drilling at the Verde and Gap Zones is designed as a series of fences of holes at 40 to 80 metres spacing along strike. Holes on each fence were collared to target the mineralisation 40 to 80 metres below the previous hole.

The Company intends to drill the entire 1.5 kilometre Verde Zone down to 300 metres vertically on 40 metre spacing fences of drilling . This drilling has been designed to provide confidence to estimate Mineral Resources to indicated category.

Challenger Exploration Limited	Issued Capital	Australian Registered Office	Directors	Contact
ACN 123 591 382	979.4m shares	Level 1	Mr Kris Knauer, MD and CEO	T: [phone]
ASX: CEL	48.0m options	1205 Hay Street	Mr Scott Funston, Finance Director	E: [e-mail]
	120m perf shares	West Perth WA 6005	Mr Fletcher Quinn, Chairman
	16m perf rights		Mr Sergio Rotondo, Exec Director

www.challengerex.com

ASX Release

15 February 2021

For personal use only

Table 1: Summary of significant Verde Zone intercepts reported in the Release.

Drill Hole	From	To	Interval	Gold	Ag	Zn	AuEq	Comments	Total intercept
(#)	(m)	(m)	(m)	(g/t)	(g/t)	(%)	(g/t)		(gram metres)
GNDD344	15.00	89.00	74.00	0.34	1.2	0.02	0.4	0.2 g/t AuEq cut	26.6
and	158.00	164.30	6.30	1.3	1.0	0.10	1.4	1 g/t AuEq cut	8.6
GNDD345	227.00	297.50	70.50	0.42	0.57	0.07	0.5	0.2 g/t AuEq cut	32.6
GNDD359	202.00	208.65	6.65	6.0	1.0	0.01	6.0	0.2 g/t AuEq cut	39.7
GNDD361	207.00	276.00	69.00	0.31	0.66	0.05	0.3	0.2 g/t AuEq cut	23.1
and	330.20	335.00	4.80	7.2	16.5	3.2	8.8	0.2 g/t AuEq cut	42.3
and	366.50	368.45	1.95	7.3	19.7	4.4	9.4	1 g/t AuEq cut	18.4
GNDD368	227.00	239.00	12.00	0.66	0.50	0.08	0.7	0.2 g/t AuEq cut	8.4
and	313.75	370.00	56.25	0.78	2.2	0.11	0.9	0.2 g/t AuEq cut	48.3
inc	339.00	344.50	5.50	5.1	13.7	0.87	5.6	1 g/t AuEq cut	30.9
GNDD373	97.00	102.00	5.00	1.2	1.6	0.06	1.3	1 g/t AuEq cut	6.3
and	376.90	430.55	53.65	0.46	1.8	0.13	0.54	0.2 g/t AuEq cut	29.2
GNDD376	141.00	192.00	51.00	0.92	15.2	0.89	1.5	0.2 g/t AuEq cut	76.7
inc	187.40	192.00	4.60	8.3	162.7	9.0	14.3	1 g/t AuEq cut	66.0
and	209.40	233.00	23.60	0.66	0.88	0.03	0.7	0.2 g/t AuEq cut	16.2
GNDD380	67.00	89.00	22.00	0.28	1.7	0.10	0.4	0.2 g/t AuEq cut	7.7
and	192.00	262.00	70.00	0.64	1.0	0.04	0.7	0.2 g/t AuEq cut	47.1
GNDD405	58.00	116.00	58.00	0.21	2.9	0.33	0.39	0.2 g/t AuEq cut	22.5
GNDD406	242.00	266.00	24.00	0.51	0.22	0.03	0.5	0.2 g/t AuEq cut	12.6
and	349.45	349.95	0.50	78.8	86.3	24.0	90.3	10 g/t AuEq cut	45.2
and	430.00	450.85	20.85	0.32	0.82	0.06	0.4	0.2 g/t AuEq cut	7.5
and	527.85	533.15	5.30	1.4	1.7	0.15	1.5	0.2 g/t AuEq cut	7.9
GNDD421	66.00	91.00	25.00	1.4	3.7	0.33	1.6	0.2 g/t AuEq cut	39.6
GNDD422	213.00	277.00	64.00	0.32	1.2	0.12	0.4	0.2 g/t AuEq cut	25.1
GNDD429	62.30	102.00	39.70	0.47	1.3	0.08	0.5	0.2 g/t AuEq cut	20.5
GNDD437	173.00	175.00	2.00	6.8	0.53	0.01	6.8	1 g/t AuEq cut	13.7
and	348.45	375.00	26.55	2.2	0.81	0.01	2.2	0.2 g/t AuEq cut	59.4
and	356.80	361.00	4.20	12.6	2.70	0.00	12.7	1 g/t AuEq cut	53.1
GNDD439	50.00	76.00	26.00	0.58	1.0	0.10	0.6	0.2 g/t AuEq cut	16.5
and	94.00	131.75	37.75	0.90	2.0	0.15	1.0	0.2 g/t AuEq cut	37.4
inc	106.00	115.00	9.00	2.9	4.9	0.45	3.2	1 g/t AuEq cut	28.7
GNDD451	101.00	130.00	29.00	0.72	0.69	0.10	0.8	0.2 g/t AuEq cut	22.4
and	148.00	162.00	14.00	0.69	0.79	0.21	0.8	1 g/t AuEq cut	11.0
GNDD456	252.00	264.40	12.40	1.6	26.7	2.12	2.8	0.2 g/t AuEq cut	35.0
inc	252.00	255.00	3.00	5.7	108.2	8.31	10.7	1 g/t AuEq cut	32.1
GNDD458	300.35	368.00	67.65	7.3	5.7	0.60	7.7	0.2 g/t AuEq cut	518.2
inc	335.90	368.00	32.10	15.2	10.9	1.22	15.9	1 g/t AuEq cut	510.6
inc	335.90	336.40	0.50	833	104	0.04	834	10 g/t AuEq cut	417.2
and	380.55	395.00	14.45	0.94	2.5	0.24	1.1	10 g/t AuEq cut	15.6

Note - See Page 21 after Table 4 for information regarding AuEq's reported under the JORC Code.

Challenger Exploration Limited	Issued Capital	Australian Registered Office	Directors	Contact
ACN 123 591 382	979.4m shares	Level 1	Mr Kris Knauer, MD and CEO	T: [phone]
ASX: CEL	48.0m options	1205 Hay Street	Mr Scott Funston, Finance Director	E: [e-mail]
	120m perf shares	West Perth WA 6005	Mr Fletcher Quinn, Chairman
	16m perf rights		Mr Sergio Rotondo, Exec Director

www.challengerex.com

ASX Release

15 February 2021

For personal use only

Figure 1 - Plan view showing Verde Zone Mineralisation (currently reported holes in red)

Challenger Exploration Limited	Issued Capital	Australian Registered Office	Directors	Contact
ACN 123 591 382	979.4m shares	Level 1	Mr Kris Knauer, MD and CEO	T: [phone]
ASX: CEL	48.0m options	1205 Hay Street	Mr Scott Funston, Finance Director	E: [e-mail]
	120m perf shares	West Perth WA 6005	Mr Fletcher Quinn, Chairman
	16m perf rights		Mr Sergio Rotondo, Exec Director

www.challengerex.com

ASX Release

15 February 2021

For personal use only

DISCUSSION OF RESULTS

Undrilled 200 metre section of the Verde Zone (GNDD-458,GNDD-426,GNDD-373,GNDD-381)

GNDD-458 and GNDD-426 were both collared in the undrilled portion of the Verde Zone between GNDD-308 in the south and GNDD-337 in the north. This 200 metres strike from GNDD-308 to the north is affected by a post mineral intrusive breccia believed to have diluted the mineralisation. Hence this 200 metre section of the Verde Zone was the last section to be drilled with the exception of GNDD-

322. GNDD-322 was drilled at the reverse angle targeting the Gap Zone mineralisation and intersected 8.9 metres at 2.0 g/t AuEq near the end of the hole. This was interpreted as GNDD-322 drilling across the Gap Zone into another zone of mineralisation.

GNDD458

GNDD-458 was collared 40 metres south of GNDD-337 (13.0m at 2.4 g/t AuEq and 34.0m at 0.3 g/t AuEq) the previous southernmost hole drilled before the 200 metre zone. GNDD-458 intersected several stacked zones of mineralisation typical of the Verde Zone. This included the best intersection recorded in the Verde Zone of 67.7 metres at 7.7 g/t AuEq (7.3 g/t Au, 5.7 g/t Ag, 0.6% Zn) from 300.4m including 32.1 metres at 15.9 g/t AuEq (15.2 g/t Au, 10.9 g/t Ag, 1.2% Zn). This included the highest individual sample gold assay recorded at the Hualilan Gold Project with 0.5 metres at 833 g/t Au and 104 g/t Ag, from 335.9m and a second high-grade zone of 1.4 metres at 24.4 g/t AuEq (21.0 g/t Au, 84.7 g/t Ag, 5.4% Zn) within the 67.7 metre intercept. GNDD-458 then intersected 14.45 metres at 1.1 g/t AuEq (0.94 g/t gold, 2.5 g/t silver, 1.1% zinc) 12.5 metres below the main zone. Including the intervening 12.5 metres of internal dilution the two zones composite to 94.7 metres at

5.6 g/t AuEq.

Additionally the hole intersected 17 metres of lower grade mineralisation in intrusives from 219.0m, a deeper zone of 11 metres of mineralised Intrusives from 458.0m, plus two deeper 1-2 metre zones of mineralisation. GNDD-458 extended the mineralisation intersected in GYDD-337 and GYDD-369, the previous southernmost holes drilled before the 200 metre undrilled zone, 40 metres south.

Additionally, as Figure 2 shows, the mineralisation intersected in GNDD-458 also correlates with near end of hole intersections in three holes drilled in the reverse orientation to test the Gap Zone mineralisation. The deeper intersection in earlier hole GNDD-252 (33.4 metres at 0.9 g/t AuEq including 2.9 metres at 5.8 g/t AuEq) is now interpreted as the upper part of the Verde Zone. As are the intersections near the end of the hole in GNDD-373 and GNDD-381.GNDD-373 intersected 53.7 metres at 0.5 g/t AuEq (0.5 g/t Au, 1.8 g/t Ag, 0.1% Zn) from 376.0m hosted in intrusives. GNDD-381 intersected 14.0m at 0.4 g/t AuEq (0.3 g/t Au, 4.7 g/t Ag) in sediments which is typical of the lower grade halo mineralisation seen above the main intrusion hosted Verde Zone.

GNDD-426 and GNDD-364

GNDD-426 was collared at the opposite end of the 200 metre undrilled hole section of the Verde Zone 40 metres north of GNDD-308 (36.8m at 0.6 g/t AuEq and 45.0m at 0.4 g/t AuEq) and GNDD-333 (21.0m at 0.6 g/t AuEq and 10.3 metres at 0.5 g/t AuEq and 13.0 metres at 0.4 g/t AuEq). GNDD-426 intercepted 28.0 metres at 0.2 g/t AuEq with the top 450 metres of GNDD-426 intersecting significant widths of the post mineral intrusive breccia. GNDD-364, collared 40 metres further south to test near

Challenger Exploration Limited	Issued Capital	Australian Registered Office	Directors	Contact
ACN 123 591 382	979.4m shares	Level 1	Mr Kris Knauer, MD and CEO	T: [phone]
ASX: CEL	48.0m options	1205 Hay Street	Mr Scott Funston, Finance Director	E: [e-mail]
	120m perf shares	West Perth WA 6005	Mr Fletcher Quinn, Chairman
	16m perf rights		Mr Sergio Rotondo, Exec Director

www.challengerex.com