Professional investor Gavin Ross backs Freehill Mining further in latest placement
Professional and sophisticated investor Gavin Ross has backed Freehill Mining (ASX: FHS) by taking up a $700,000 placement telling Small Caps that he was “very impressed” with the company’s board and magnetite asset.
Under the placement, Freehill issued Mr Ross with 14 million fully paid shares at $0.05 each.
Today’s placement follows one back in February when Mr Ross scooped up $750,000-worth of shares at $0.018 each.
The February placement came after Mr Ross paid a visit to Freehill’s flagship Yerbas Buenas magnetite project in Chile.
Commenting on his investment in Freehill, Mr Ross said the company had “huge potential”.
He said that after securing an interest in iron ore miner Fortescue Metals Group (ASX: FMG), his investment company Gavin Ross & Co had learned a lot about the commodity.
After evaluating numerous ASX stocks, Mr Ross said Freehill caught his eye.
“So much so that I flew to Chile earlier in the year to inspect their Yerbas Buenas project.”
He said he concluded the Yerbas Buenas ore body was “unique” and “extremely valuable” with its ability to produce “ultra-high grade” 67-69% iron pellet feed, with low impurities – even for magnetite.
“It is just a question of how much ore is there – the indication from the recently published mineral resource estimate is that there is a lot.”
Mr Ross added that Chile was also a “favourable” mining jurisdiction with a long history.
Following his visit to the project, Mr Ross said he approached Freehill about investing money in the company, adding he was “very impressed” with the board.
“[The Freehill board] is incredibly intuitive to acquire these leases in Chile, and now the drilling results are proving them right.”
In addition to possessing unique and valuable ore, Mr Ross pointed out Yerbas Buenas had “exceptional cost logistics and location”.
He noted the project was “510km north of Santiago (several flights a day), 40km north of the 400,000 population seaside town of La Serena with all modern commercial services, and 2km on a public road to the four lane Pan-American highway”.
“A new dedicated iron ore port is being built at Chungungo, only 18km away on a public sealed road that runs past Yerbas Buenas’ gate.”
“Mine labour is plentiful with more than a dozen magnetite operations within 30-400km of the project.”
He added the region’s electricity power grid passes the project’s gate – making power easily accessible.
Advancing Yerbas Buenas with strong outside endorsement
Freehill said the funds from Mr Ross’ latest placement would provide “further financial flexibility” to advance Yerbas Buenas, with the company focused on delivering its current feasibility study.
Earlier this week, Freehill revealed a fourfold increase to its Yerbas Buenas magnetite resource.
The resource upgrade is underpinned by drilling at the YB6 structure within the project’s Arenas XI concession.
Global resources at the project now total 67 million tonnes at 19.1% iron, with YB6 contributing 49Mt at 20.4% iron and the YB1 structure accounting for the remainder.
“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,” Freehill chief executive officer Peter Hinner pointed out.
In addition to the resource upside potential, Davis Tube Recovery test work on YB6 ore has produced concentrate grades exceeding 70% iron, with results indicating YB6 could generate a “premium high-quality” pellet feed grading 67-69% iron.
Freehill anticipates it can develop its resources in a “relatively short period of time”, due to the project’s proximity to the abovementioned infrastructure.
The company also pointed out it has been carrying out trial mining at YB1 between 2017 and 2019, with the operation involving a demonstration plant.
Magnetite concentrates from the project were transported to Chile’s largest iron ore miner and pellet producer Compania Minera De Pacifico S.A Romeral pellet feed plant.
With Compania Minera already familiar with Yerbas Buenas ore, Freehill anticipates it may be open to a commercial offtake agreement in the future. However, Freehill is also looking at other offtake options with the ability to export product out of nearby ports Coquimbo, Guyacan and Cruz Grande.