Freehill Mining links record sales to A$1.2 million Chile expansion raise

A$1.2 million capital raising targets Chilean growth

Freehill Mining Limited (ASX:FHS) is seeking roughly A$1.2 million to push its Chilean operating and development plans forward, pairing a completed A$600,000 placement with a proposed A$606,943 entitlement offer. The placement will issue 600 million shares at 0.1 cents each to a single sophisticated and professional investor, while eligible Australian and New Zealand shareholders are being offered one new share for every 6.7 held at the same price.

The entitlement offer is non-renounceable and not underwritten, leaving the final amount dependent on shareholder participation. Freehill’s directors Benjamin Jarvis and Paul Davies intend to take up their full entitlements. If fully subscribed, including the placement, the company’s shares on issue would rise from about 4.07 billion to 5.27 billion, a potential increase of almost 30% for shareholders who do not participate.

Record sales give the raise an operating anchor

The fundraising arrives alongside a stronger operating update than the company’s recent funding disclosures might suggest. Freehill reported September gross sales of A$506,121 from its Islón and Yerbas Buenas aggregates operations, its highest monthly result to date. The figure was achieved despite a less favourable currency conversion than in July and August, although the announcement does not provide net revenue, profit or operating cash flow.

The result marks a recovery from the extreme weather disruption reported in July, with the company also pointing to lower input costs, improved logistics and a broader customer base. The update follows record quarterly aggregates sales, which had previously been reported alongside a material uncertainty over Freehill’s ability to continue as a going concern. That qualification remains an important counterweight to the latest sales momentum: gross sales growth is not the same as a demonstrated surplus of cash.

Islón upgrades are the next operating test

Freehill plans to direct part of the new capital towards trucks, plant, land purchase and electricity connection. The entitlement offer specifically allocates A$300,000 to trucks and plant, A$70,000 to a land purchase deposit and electrification, and A$61,943 to working capital, after A$25,000 of offer costs.

At Islón, the company is installing a second vertical shaft impact crusher, a three-deck screen, conveyors and a larger feed hopper. The equipment is intended to restore 13-millimetre gravel production, add 20-millimetre gravel and dry industrial sand, and increase processing volumes. Freehill expects the upgrade to be completed by the end of October, with benefits from November onwards; whether those benefits appear in margins and cash generation will matter more than the headline capacity increase.

Blanco y Negro moves towards mine-plan submission

The raise also gives Freehill room to advance Blanco y Negro, where A$150,000 of entitlement proceeds is earmarked for an option payment. The company holds options over the Chilean copper-gold deposit, which has a reported JORC 2012 mineral resource of about 1.5 million tonnes grading 1.4% copper and 0.5 grams per tonne gold, containing approximately 20,000 tonnes of copper and 24,000 ounces of gold.

Engineer Marco Meneses is progressing the mine-plan submission, including access, infrastructure and tunnelling documentation, with submission to SERNAGEOMIN scheduled by the end of October. The milestone follows Blanco y Negro engineer appointment, which was announced as proposed changes to Chilean small-scale mining limits were expected to improve the project’s development potential. Submission is not approval, however, and the company’s offer document continues to flag permitting, operating, funding and going-concern risks.