Freehill Commissions Second Processing Site, Boosts Customer Deliveries
Freehill Mining has overcome delays to commission a second processing site in Chile, initiating customer deliveries and signaling a turnaround in its aggregates business.
- Second processing site near La Serena commissioned after delays
- Customer deliveries and stockpiles building at new site
- Yerbas Buenas operations focus on sand and rock despite legal challenges
- Magnetite bulk sample testing completed; results pending
- Operational enhancements underway to boost sales and margins
New Processing Site Comes Online
Freehill Mining Limited (ASX, FHS) has announced the commissioning of its second processing site near the La Serena/Coquimbo metropolitan area in Chile, marking a significant milestone in its operational expansion. Although the setup faced delays due to water access issues, installation of new sand washing equipment, and extended customer testing periods, these hurdles have now been resolved. The company has begun regular customer deliveries from this site, with stockpiles steadily building, signaling a promising start to what management hopes will be a sustained sales recovery.
Strategic Shift to Local Construction Supply Chain
By establishing operations closer to the La Serena/Coquimbo region, Freehill is embedding itself more deeply into the local construction industry's supply chain. This strategic move reduces reliance on large, project-driven contracts and opens access to a broader customer base with ongoing material needs. The company reports that local demand currently outstrips its supply capacity, prompting considerations for additional processing equipment if sales momentum continues.
Yerbas Buenas Site Focuses on Sand and Rock
The Yerbas Buenas operations remain a core part of Freehill’s aggregates business, now concentrating exclusively on sand and rock production for construction customers. Despite ongoing legal challenges stemming from a tragic worker fatality in 2024, which has diverted management attention, the site maintains meaningful stockpiles and continues deliveries. Freehill asserts full compliance at the time of the incident, aiming to stabilize operations and restore focus on growth.
Magnetite Testing and Future Prospects
In addition to aggregates, Freehill is exploring higher-value commodities. The company recently completed bulk sample testing of magnetite material from Yerbas Buenas, crushed to 3 millimeters, following earlier tests at 6 millimeters that yielded a product grade of 65.75% iron. Results from the latest testing are pending, and their outcome could influence Freehill’s plans to expand into more lucrative mineral products, potentially enhancing near-term cash flow.
Operational Enhancements and Outlook
Freehill is actively implementing operational improvements at both processing sites to increase production volumes and margins. These efforts come after two quarters of declining sales, with a turnaround now underway. The company’s focus on optimizing plant performance and reducing operating costs reflects a pragmatic approach to strengthening its position within Chile’s competitive aggregates market.
Bottom Line?
Freehill’s operational strides in Chile set the stage for a critical test of its sales recovery and potential commodity diversification.
Questions in the middle?
- What will the magnetite test results reveal about Freehill’s potential in higher-value commodities?
- How will ongoing legal issues at Yerbas Buenas affect operational stability and investor confidence?
- Can Freehill scale its processing capacity quickly enough to meet growing local construction demand?
