Magnetite explorer Freehill Mining (ASX: FHS) has cemented its acquisition of the El Dorado project in Chile after signing a formal binding agreement.
The 750 hectare project adjoins Freehill’s flagship Yerbas Buenas project in the region and is prospective for magnetite, copper and gold.
Freehill can now exercise its option to purchase El Dorado via the issue of 75 million shares to the asset’s vendors.
“While we have been busy advancing our Yerbas Buenas project that saw the company significantly increase the magnetite resource and improve the overall grade, we have also been diligently progressing the El Dorado transaction, which adds significant scale to our asset base in Chile,” Freehill chief executive officer Peter Hinner explained.
“The strategic rationale for this acquisition has been well documented and we are pleased to be kicking off a planned preliminary schedule of works so we can immediately commence exploration activities the moment shareholders approve the transaction.”
He added initial exploration at El Dorado will comprise ground magnetic and induced polarisation surveys to gain a better understanding of the “hot spots” and firm up drill targets.
“There is much to look forward to as we unlock El Dorado’s significant value.”
Freehill noted recent reconnaissance rock chip sampling at El Dorado had uncovered in excess of 45% iron, 4.85% copper and 22.8 grams per tonne gold.
Yerbas Buenas project
It is expected El Dorado will grow Freehill’s landholding in the region to 1,250ha.
Earlier this month, Freehill revealed a fourfold increase to resources at Yerbas Buenas with the project now hosting 67 million tonnes at 19.1% iron.
The updated resource was from drilling at the YB6 structure within the Arenas XI concession that was acquired last year.
Alone, YB6 hosts 49Mt at 20.4% iron, which adds to the maiden indicated and inferred resource for YB1 of 18Mt at 15.1% iron.
“It should also not be lost on shareholders that the mineral resource estimate is based on drilling of only two of the seven structures identified by geophysics across the project,” Mr Hinner pointed out.
Additionally, Davis Tube Recovery test work on YB6 ore revealed concentrate grades exceeding 70% iron with low impurities.
It is expected that the target can produce “premium high-quality” pellet feed grading 67-69% iron over many years.
Sophisticated investor Gavin Ross backs Freehill
As well as revealing a resource upgrade, Freehill announced last week that professional and sophisticated investor Gavin Ross had taken up a second placement in the company.
Last week’s placement was for $700,000 – equating to 14 million fully paid Freehill shares at $0.05 each.
Prior to that, Mr Ross subscribed for $750,000-worth of shares back in February after he had visited the project.
After inspecting the project, Mr Ross concluded its was “unique” and “extremely valuable” and in a favourable mining jurisdiction with access to all requisite infrastructure.
Mr Ross added he was also “very impressed” with the Freehill board and its intuitiveness in acquiring the Chilean tenements.