Why the Challenger Exploration (ASX:CEL) share price is on the move

The Challenger Exploration (ASX:CEL) share price is edging higher after the company outlined plans for a new drilling program Argentina.

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Challenger Exploration Ltd (ASX: CEL) shares are edging higher today after the company outlined plans for a new fully-funded drilling program in San Juan, Argentina. At the time of writing, the Challenger share price is trading 1.59% higher at 32 cents.

Challenger Exploration is engaged in the exploration of gold and copper with operations in Ecuador and Argentina. The company is developing two complementary gold/copper projects in South America, namely the Hualilan Gold Project in Argentina (the focus of today's update) and the El Guayabo Gold/Copper Project in Ecuador.

New drilling program

The Challenger Exploration share price is responding positively after the miner advised its fully-funded, five-rig, 30,000-metre drilling program at the Hualilan Gold Project is expected to significantly increase the scale of its operations. 

Challenger's new program builds on a recently completed 45,000-metre drill program, which it says has seen Hualilan emerge as a gold discovery "with significant scale that remains open in all directions".

Drilling is expected to continue to increase the scale of the project because it includes new targets away from Hualilan, which are to be tested in the current 30,000 metres of drilling.

The program is being funded through Challenger Exploration's available cash of approximately $14.5 million, bolstered by another $3.5 million in option financing.

The company's latest market update was released at 1.21 pm AEST, pushing the Challenger Exploration share price into the green.

Management comments

Challenger Exploration managing director Kris Knauer commented that Hualilan is proving to be very lucrative. He said:

The extension of the current drill program was always going to be an easy decision given the results we have been receiving, not just recently, but since we started drilling at Hualilan. Already it looks like the new 30,000 metre program will emulate the old program.

The last hole in our 45,000 metre program, and western most test of the Magnata Fault, has intersected strong mineralisation while the first hole in our new 30,000 metre program…has been deepened as it is still drilling through mineralisation. Hualilan continues to surprise us on the upside and where [we] land in the next 12 months will be a long way ahead of the expectations we had when we started drilling our first hole.

Challenger Exploration share price snapshot

The Challenger Exploration share price has gained 52% in 2021 so far, and 190% over the past 12 months. Based on the current share price, the company commands a market capitalisation of around $174 million.

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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