Gavin McDonnell unsuccessful in bid to become WBC champion
McDonnell showed incredible heart and bottle throughout a tough 12 rounds against a quality fighter in Vargas.
The Mexican claimed 117-111 and 116-112 points decisions from two of the judges, while British judge scored a controversial 114-114 draw.
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Hide AdThough it was always an uphill struggle, McDonnell's night never looked like being ended early and he actually stepped up his workrate as the fight wore on.
McDonnell looked to keep things tight in the early stages, wary of Vargas' power which had stopped 22 of his 28 previous opponents.
Vargas himself threw plenty but found mainly gloves and arms in the early rounds. He struggled to find the range of his body shots, and would be warned about low blows on three occasions.
The Mexican did begin to show good accuracy and fast hands, beginning to find some success.
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Hide AdHis occasionally erratic approach did leave him open for counterpunches and McDonnell obliged on numerous occasions.
Vargas looked to be finding his rhythm in the middle rounds and it appeared likely he would coast to victory with McDonnell struggling to mount consistent offence.
But the Doncaster man found his second wind and rallied.
Perhaps in the knowledge he had nothing to lose, McDonnell produced a brilliant effort over the final three rounds.
He landed consistently and with purpose to force Vargas backwards.
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Hide AdBut it was too late to tip the balance, which McDonnell's corner clearly knew at the final bell.
McDonnell slipped to his first defeat but can be incredibly proud of his effort.
Earlier in the night, Conisbrough's David Allen earned a brutal first round stoppage against Lukasz Rusiewicz.
Allen walked down the Polish fighter from the start and landed a trio of clubbing right hooks.
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Hide AdRusiewicz quite literally went on the run but Allen met him with a couple of big left hooks on the ropes and referee Michael Alexander had seen enough with just 31 seconds on the clock.
The result improves Allen to 10-2-1 and was his seventh stoppage victory.