Why the Challenger (ASX:CEL) share price is storming 27% higher today

This comes after the reporting of drilling results earlier today.

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The Challenger Exploration Ltd (ASX: CEL) share price is surging 27% higher in afternoon trade.

Shares in the exploration company are storming higher after reporting drilling results earlier today.

At the time of writing, the Challenger share price is trading around 27% higher at 27.5 cents after hitting an intraday high of 28.5 cents.

Lets take a look at Challenger's drilling results and why investors are flocking to buy shares.

Challenger share price jumps on drilling results

Earlier today, Challenger released results from its ongoing rock saw channel sampling program from the company's Hualilan Gold Project.

According to the announcement, Challenger reported its highest ever grades from the site. The company noted significant high-grade mineralisation in the 200 metres up-dip from current drilling.

The results cover approximately 300 metres of strike at Cerro Norte and are the first continuous channel samples taken above ground level.  

Challenger's results from the Sanchez Fault approximately 100 metres up-dip from ground included;

  • 15.6m at 71.7 g/t AuEq2 – 70.9 g/t gold, 59.1 g/t silver, 0.2% zinc including;
  • 4.0m at 203.8 g/t AuEq2 – 201.6 g/t gold, 172.0 g/t silver, 0.1% zinc.

Sampling up-dip of previous channel sampling from the company's main Cerro Norte Manto site returned;

  • 64.8m at 28.3 g/t AuEq2 – 23.4 g/t gold, 104.1 g/t silver, 8.3% zinc including;
  • 8.8m at 49.3 g/t AuEq2 – 45.2 g/t gold, 88.7 g/t silver, 6.8% zinc and;
  • 26.5 m at 34.4 g/t AuEq2 – 29.3 g/t gold, 114.4 g/t silver, 8.2% zinc

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

"These are the best results we have seen at our Flagship Hualilan Gold Project – 4m at 201.6 g/t gold is outstanding. The results confirm our view that the strongest mineralisation is likely to be in the Hualilan Hills which are yet to be drilled.".

Snapshot of the Challenger share price

Challenger is engaged in the exploration of gold and copper with operations in Ecuador and Argentina. The company's flagship gold projects include the Hualilan Gold project in Argentina and El Guayabo/Colorado V Project in Ecuador. 

Earlier this year Challenger outlined plans for a fully-funded drilling program for its Hualilan Gold project. The company believes there is a historical resource of 627,000 ounces of gold.

The Challenger share price has been volatile in 2021. Shares in the company hit a high of 39.5 cents in mid-February. Since then the Challenger share price has rallied and dipped. Including today's price action, the Challenger share price is up more than 34% for the year.

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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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