CHALLENGER GOLD LIMITED — Capital/Financing Update 2021

May 10, 2021

Proposed issue of securities

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Update Summary

Entity name

CHALLENGER EXPLORATION LIMITED

Announcement Type

Update to previous announcement

Date of this announcement

Tuesday May 11, 2021

Reason for update to a previous announcement

Typographical Error in number of shares to be issued

Refer to next page for full details of the announcement

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Proposed issue of securities

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Part 1 - Entity and announcement details

1.1 Name of +Entity

CHALLENGER EXPLORATION LIMITED

We (the entity named above) give ASX the following information about a proposed issue of +securities and, if ASX agrees to +quote any of the +securities (including any rights) on a +deferred settlement basis, we agree to the matters set out in Appendix 3B of the ASX Listing Rules.

1.2 Registered Number Type

Registration Number

ABN 45123591382

1.3 ASX issuer code

CEL

1.4 The announcement is

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Update/amendment to previous announcement

1.4a Reason for update to a previous announcement

Typographical Error in number of shares to be issued

1.4b Date of previous announcement(s) to this update

Tuesday May 11, 2021

1.5 Date of this announcement

Tuesday May 11, 2021

1.6 The Proposed issue is:

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A placement or other type of issue

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Part 7 - Details of proposed placement or other issue

Part 7A - Conditions

7A.1 - Are any of the following approvals required for the placement or other type of issue? +Security holder approval Court approval Lodgement of court order with +ASIC ACCC approval FIRB approval Another approval/condition external to the entity No

Part 7B - Issue details

Is the proposed security a 'New Will the proposed issue of this class' (+securities in a class that is +security include an offer of not yet quoted or recorded by ASX) attaching +securities? or an 'Existing class' (additional No securities in a class that is already quoted or recorded by ASX)? Existing class

Details of +securities proposed to be issued

ASX +security code and description CEL : ORDINARY FULLY PAID

Number of +securities proposed to be issued 150,500,000

Reason for the update of 'Maximum Number of +securities proposed to be issued' Typographical Error

Offer price details

Are the +securities proposed to be issued being issued for a cash consideration? Yes In what currency is the cash What is the issue price per consideration being paid? +security? AUD - Australian Dollar AUD 0.28000

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Will these +securities rank equally in all respects from their issue date with the existing issued +securities in that class? Yes

Part 7C - Timetable

7C.1 Proposed +issue date

Tuesday May 18, 2021

Part 7D - Listing Rule requirements

7D.1 Has the entity obtained, or is it obtaining, +security holder approval for the entire issue under listing rule 7.1? No 7D.1b Are any of the +securities proposed to be issued without +security holder approval using the entity's 15% placement capacity under listing rule 7.1? Yes

7D.1b ( i ) How many +securities are proposed to be issued without security holder approval using the entity's 15% placement capacity under listing rule 7.1?

85,019,844

7D.1c Are any of the +securities proposed to be issued without +security holder approval using the entity's additional 10% placement capacity under listing rule 7.1A (if applicable)? Yes

7D.1c ( i ) How many +securities are proposed to be issued without +security holder approval using the entity's additional 10% placement capacity under listing rule 7.1A?

65,480,156

7D.1c ( ii ) Please explain why the entity has chosen to do a placement rather than a +pro rata issue or an offer under a +security purchase plan in which existing ordinary +security holders would have been eligible to participate

The Company considered a pro rata issue or SPP would not achieve the desired outcome in as a timely manner as a Placement

7D.2 Is a party referred to in listing rule 10.11 participating in the proposed issue? No 7D.3 Will any of the +securities to be issued be +restricted securities for the purposes of the listing rules? No

7D.4 Will any of the +securities to be issued be subject to +voluntary escrow? No

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Part 7E - Fees and expenses

7E.1 Will there be a lead manager or broker to the proposed issue? Yes

7E.1a Who is the lead manager/broker?

Henslow Pty Ltd and Canaccord Genuity (Australia) Limited

7E.1b What fee, commission or other consideration is payable to them for acting as lead manager/broker?

6% of the funds raised pursuant to the placement

7E.2 Is the proposed issue to be underwritten?

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No

7E.4 Details of any other material fees or costs to be incurred by the entity in connection with the proposed issue No additional material costs, however there will be additional costs such as ASX listing fees and Share Registry Fees

Part 7F - Further Information

7F.01 The purpose(s) for which the entity is issuing the securities

Proceeds will be used to fund further exploration at the Company's Hualilan Project and El Guayabo / Colorado V Projects and provide additional working capital

7F.1 Will the entity be changing its dividend/distribution policy if the proposed issue proceeds? No

7F.2 Any other information the entity wishes to provide about the proposed issue

No

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