Freehill Mining Limited confirmed an initial off-take agreement from its 100%-owned Yerbas Buenas magnetite project in Chile. The agreement is for the supply of magnetite ore to Compania Minera Del Pacifico S.A. (CMP), a subsidiary of Chilean conglomerate CAP S.A. ­ Chile's largest iron ore producer. Deal terms comprise the receipt of an initial total of 24,000 tonnes of magnetite ore, grading at 53% Fe.

Existing inventory of ~5,000 tonnes is now being transported to CMP with the balance of the maiden order targeted for delivery shortly thereafter. Processing operations on the ground at Yerbas Buenas continue to operate efficiently, following the replacement of plant equipment (including all electrical systems) in first quarter. Freehill also completed the acquisition and installation of an impact crusher to further optimise its forecast production quotas.

Along with the existing off-take agreement at -7mm, the impact crusher has the capacity to produce a final product of -3mm iron ore associated with benchmark 62% fines. Ongoing production milestones leave the Company well-placed to secure additional sales in the domestic market, given the proximity of its YB operations to the CAP Romeral Pellet feed plant along with arterial highway routes. The advantageous location of YB provides the company with an obvious benefit with new sales leads via land-borne transport logistics, as opposed to airborne or seaborne channels.

Separate negotiations are underway with a number of domestic customers in the Chilean market with respect to the supply of aggregate fines. These discussions offer Freehill an opportunity to explore additional revenue streams as a direct by-product of its efficient production operations.