Freehill Mining has started Phase One mining operations at its 100%-owned Yerbas Buenas magnetite project in Chile.

Local contractor MTN Gold has been selected to provide turnkey mining, crushing and ore processing services for the mine.

The firm will be responsible for the supply of all necessary mining, crushing and processing equipment.

Freehill Mining CEO Paul Davies said: “The appointment of an experienced and proven contractor is an excellent outcome for Freehill and consistent with our strategy of establishing a low CAPEX, low OPEX, sustainable mining operation at Yerbas Buenas.

“Our immediate focus is to ensure the consistent delivery of ~5,000 tonnes of saleable product per month using third-party infrastructure and support. Building a steady revenue base from the Phase One operations is our key objective so we can self-fund our near-term growth and limit shareholder dilution.”

With plans to start first ore sales in January 2022, the mine will have a production rate of around 5,000t/m of magnetite, under the current permit.

According to a report by DD Consulting, the ore from the Yerbas Buenas mine is suitable for the production of 68%+ Fe grade pellet feed, 53% Fe grade LG fines and 63% Fe grade HG fines.

MTN will now undertake site preparation work, with plans to start operation at the mine within the next 90 days.

Davies continued: “We can also confirm that there is considerable demand for the Yerbas Buenas ore and we are assessing a number of sales channels.”

Freehill Mining said that the magnetite product from Yerbas Buenas would be suitable for sinter feed and for sale as feed to a pellet feed production facility.

Moreover, the ore is expected to provide very high-grade magnetite concentrate that could be suitable for feeding direct reduced (DR) ironmaking.