Structures and alteration associated with mineralizing, pre-anatectic hydrothermal alteration at the Challenger gold mine in South Australia strongly influenced and preferentially focused subsequent metamorphism, partial melting and deformation. This event resulted in efficient deformation-enhanced melt extraction from the host rocks immediately adjacent to mineralization, leaving restitic garnet, cordierite, K-feldspar rich mineral assemblages. Progressive reintegration of silicate melt into the highly restitic proximal gneiss bulk composition, using mineral equilibrium modelling in the system NCKFMASHTO, indicates that hydrothermal alteration stabilized a higher proportion of hydrous minerals leading to increased fertility and thus melting in the proximal gneiss. Further modelling at lower temperatures provides an insight into mineral assemblages that may have been associated with mineralization. Temperature–composition modelling provides evidence that composite gold–sulphide melts were armoured by quartz and as such were immobile during peak metamorphism. At Challenger, melt permeability of the mineralized zones was enhanced via the formation of a structural fabric, folding, boudinage, fracturing and the formation of shear zones. Giving consideration to the relationships and orientations of these structures, a model for preferential deformation and melt migration within the mineralized shear zone under transpression is developed, where melt is essentially pumped out of the system parallel to the maximum principal elongation direction.