Chile focused explorer Freehill Mining (ASX: FHS) has begun a phase two drilling program at Yerbas Buenas, with its recently acquired tenements a priority target due to the new licences hosting a continuous magnetic structure.
Earlier this year, Freehill debuted a maiden resource for the project’s YB1 structure that significantly exceeded a previously outlined exploration target.
With a resource of 18.4 million tonnes at 15.1% iron and a concentrate grade of 68.4% iron, Freehill chief executive officer Peter Hinner said it vindicated the company’s belief the project could rapidly become an important revenue generator.
Meanwhile, drilling at the project’s much larger YB6 target returned 120m at 30% iron from near surface, including 16m at 61% iron.
At the beginning of September, Freehill revealed it had acquired 80 hectares of land adjoining YB6.
Mr Hinner explained the new tenements provided “considerable upside” and “significant opportunity” to expand the project’s YB6 magnetic structure, which extends about 1.1km.
He added the ground magnetics footprint on the newly acquired tenement was “exactly the same” as YB6 so the company anticipated it would get similar grades from the current drilling program.
Two diamond rigs are at Yerbas Buenas with a 4,500m program due to be completed by the end of December.
“Acquisition of the adjoining tenement to our south now puts us in a position to drill and verify a continuous 1.1km magnetic structure identified by geophysics that we hope will provide sufficient mineralised material to sustain a bulk magnetite mining operation for 15-20 years,” Mr Hinner explained.
“The complete structure more than trebles the footprint of the previous estimate and ground magnetics intensities suggest a continuation of high grades similar to those encountered at the northern end of the structure during last year’s drilling campaign.”
“With an offtake buyer situation down the road and what could shape up to be a high-quality magnetite supply,” he added.
In early morning trade, Freehill’s shares were steady at $0.014.