I would look into boring those holes (0.160"?). Also workholding will be tough with thin sheet. Your 4 probably won’t be able to do it but I’ve run carbide drills that size in the HDM, thicker stock though. With an HDM I would still probably bore that hole
I think it will depend on your spindle. I bet the machine will apply reasonable downward pressure, but a router is going rather fast for steel. According to this chart, you want a 3000RPM. Drill Press Speed Chart
If you had a spindle that could go that slow (not a router) you are probably in business. Some of the amazon 500W spindles claim to go that speed. In the end, you could just try it. Coated drill bits might help resist the heat. Oil or air spray could help lubricate/cool. At worst, you ruin a drill bit or two.
Andy - I’ve recently been working with sheet metal (cold rolled mild steel) in a variety of thicknesses (0.9, 1.2, 1.5, 2.0mm) - using my Shapeoko 3 to drill and cut out parts.
Firstly I use Estlcam to generate my gcode - for helical drilling and trochoidal milling. Highly recommended.
Typically I use 3mm and 4mm endmills - much like what Vince pictured - I just sourced them on Aliexpress nothing fancy.
I do have a spindle - and run it around 8000 RPM for milling, and as slow as 3500 RPM for drilling.
When drilling I give it a squirt of WD-40. When milling I don’t use anything - those endmills will cut all day sideways without coolant (it took a bit of experimenting to get the right speeds and feeds). I just cut full depth in one pass when trochoidal milling.
It’s not a speedy process - having access to a laser cutter would be much better for what I’m doing, but I don’t - so I use my Shapeoko and am quite delighted with what I can do.
Is it designed to do what I’m doing, probably not - but it works surprisingly well!
Here is a video showing one of the parts I’ve made from steel sheet - in this case 0.9mm thick.
The end mill is almost completely knackered at this point (used it for a couple of weeks), the tip flutes are getting rather dull, so I’ve plunged into the MDF below by a couple of mm so I can use the sharper flutes away from the tip.
That end mill has since been retired - but it served me well.
If just exact placement is the painful part, have you thought of using the machine to spot drill the holes and finish them by hand? It won’t automate the whole thing but would give you a starting placement for them
I’ve done some of this for larger drilling where I want the holes in the right place.
I cheat, I have a spindle, but I run it slow and use a small carbide spot drill and some cutting oil to make enough of a starter dent to put the spot drill and then big drill in. Basically using the CNC as a layout device. You could use an end mill and higher RPM if you only have a router.