QMines upbeat about latest resource estimate for flagship Mt Chalmers project

A recently listed junior miner has revealed a second “resource estimate’’ for its flagship copper and gold project in Queensland is substantially higher than its previous estimate.

Shares in QMines closed down 1.3 per cent at 38c on Wednesday.

The company aiming to revive a long-dormant Queensland copper and gold mine has uncovered further evidence the site is primed for fresh digging.

QMines announced Wednesday that its second “resource estimate’’ for its flagship Mt Chalmers project outside Rockhampton was 38 per cent higher than its previous estimate completed in February.

It comes just six months after the Sydney-based firm floated on the ASX after raising $11.5 million from investors, including a substantial number of institutional and European backers who are betting copper prices will remain high.

Chairman Andrew Sparke hailed the result as a “fantastic achievement’’ and said a 30,000sq m drilling program would yield additional data in the first half of next year.

“It is very pleasing to see that the upgraded resource has substantially grown in both size and confidence level, with the measured and indicated categories now comprising 78 per cent of the overall resource,’’ Mr Sparke said.

QMines chairman Andrew Sparke

The company last week revealed further evidence of the “high-grade nature of the deposit’’ and, in October, it found what it called “bonanza-grade copper, gold, silver, lead and zinc intercepts’’.

The mothballed Mt Chalmers open-pit site was mined periodically between 1898 and 1982, when falling prices meant further work became uneconomical.

Copper sank to a recent low of just $US4371 a tonne in March last year but has rebounded strongly since then and now trades at more than twice that amount.

Some market analysts tip it to reach $US15,000 a tonne by 2025, as demand spikes in economies recovering from the pandemic.

Notably, copper is a key component in many of the renewable power projects expected to come online as the world transitions away from fossil fuels.

QMines, which itself vows to go carbon-neutral by 2030, has been carrying out an “aeromagnetic survey’’ by helicopter of the Mt Chalmers site that will help it create 3D models to identify the key areas for drilling.

The company, which suffered a $1.58m net loss in the last financial year, also has control of three other currently inactive copper and gold projects in south east Queensland.

Shares in QMines were issued at 30c and have traded as high as 48c.

They closed down slightly on Wednesday at 38c.

Stockbroking firm Shaw and Partners recently initiated coverage of QMines with a “buy’’ recommendation and has lifted its price target from 69 cent to 72 cents.

Analysts Andrew Hines and Michael Clark describe the recent exploration results as “highly encouraging’’.

“The IPO of QMines appears well timed. There are very few ways for investors on the ASX to gain exposure to copper outside of the major diversified miners and larger companies such as Oz Minerals and Sandfire,’’ their latest client note said.