QMines Ltd (ASX:QML) (FRA:81V) released highly encouraging results from its maiden diamond drilling at the Mt Chalmers Copper Project in Queensland this week and has immediately moved to a 3,000-metre reverse circulation (RC) drilling campaign.
The newly listed company, which aims to be Queensland’s next copper and gold developer, has an extensive drilling program planned, funded by its recent IPO which raised $11.5 million.
Its exploration goal is to establish a strong copper development story over the next 18-24 months and to demonstrate that there is more copper and gold mineralisation underneath and around the historical high-grade mine.
And QMines looks on track to achieve this, with results from seven out of 11 diamond holes returning grades of up to 13.4% copper and 6.11 g/t gold.
Expanding existing resource
The company picked up this project and the Silverwood, Warroo and Herries Range assets in the region last year and along with this came a JORC inferred resource of 3.9 million tonnes at 1.15% copper, 0.81 g/t gold and 8.4 g/t silver.
Mt Chalmers was last mined between 1908 and 1982 with two large open pits around which the company believes there are several additional deposits that have not been mined.
QMines chairman Andrew Sparke said the company was open to consolidating additional assets around the project.
He said: “We are open to anything we think is complementary, hopefully with existing resources that add to our current resource.
“We’ve got already a JORC inferred resource underneath the two pits of a lot of copper and gold mineralisation, but we’re a little bit impartial in that we don't mind how we grow the resource - whether it's through acquisition or whether it's organically through exploration drilling - as long as we do it as cheaply as cost-effectively as we can.”
Historic mine reduces risk
Sparke is confident that the historic mine will be key to reducing investors risk in the project.
He said: “There's a lot of infrastructure on-site and you know that the metallurgy worked at some point as it’s already been mined successfully.
“And you know that at some point in the cycle, the copper and gold grades were obviously economic enough to mine.
“So [the project] ticks a lot of those risk boxes, which is always a good thing to do.”
Locations of QMines’ projects and other major mines.
Prospective for VMS clusters
The Mt Chalmers project is a VMS deposit, which generally occurs in clusters of between 5 and 40.
Sparke said: “We've got one deposit of a cluster at the Mt Chalmers pit, but we've also now identified three exploration targets which we believe are individually separate deposits as well - all within a kilometre of the pits.
“So, I think there's a lot more scale here, that we're on a journey of identifying and unlocking.
“We think that this deposit has a lot more growth potential and effectively, through good exploration, there's a really strong chance of adding to that resource and so we're quite excited about it.
“And I think that's what's going to generate a lot value for investors over time.”
European ESG focused investors
The company is building a European investor base, having listed on the Frankfurt Stock Exchange and securing three large European investors that took up around 40% or $4.5 million of the IPO.
QMines is also focused on becoming Australia’s first zero-carbon copper and gold explorer – with many German and European investors having a deep understanding of the green, decarbonisation trends and transitions occurring in the energy space.
Sparke said: “They really understand what that's going to mean for energy metals like copper.
“They've got lots of renewable power over there, they're really leading the world in this transition to new ways of consuming energy.
“When we started to see these bigger investors participating, we thought it made sense to start to do some more marketing over there and also to give those European investors a platform for buying or selling the stock.”
Strong development potential
Sparke said: “We believe we've got an asset with fantastic development potential. We think Mt Chalmers has potential to become a mine. If we can grow this resource over the next 18-24 months, we're going to be in a really good position to add value for shareholders - because there is a scarcity of quality Australian copper development stories.
“That scarcity factor, in quality Australian copper development stories, puts us in a great position going forward.
“And I think that will bode well for our valuation and for the return for our investors over time.”