** Shares of Challenger Gold CEL.AX rise as much as 11.1% to A$0.050, their biggest intraday pct gain since late-October

** Co signs a processing agreement with gold and silver miner Austral Gold's AGD.AX subsidiary Casposo Argentina Mining

** Under the deal, Casposo will process gold from CEL's Hualilan project in Argentina for three years

** CEL says base processing fee is $8.80 per tonne and an upfront payment of $2 mln, with additional $1 mln to be paid in the second year

** AGD shares jump 14.3% to A$0.024

** More than 2 mln CEL shares change hands, vs the 30-day average of 1.8 mln shares

** CEL trims YTD losses to 33.8%, while AGD shares down 17.2%

($1 = 1.5550 Australian dollars)

(Reporting by Namrata Verma in Bengaluru)

((Namrata.Verma@thomsonreuters.com;))