Barry FitzGerald: Copper is making its run and so is soon to be cashed up QMines

ASX junior QMines is ready to reap the rewards of a rising copper price as it restocks to explore its Mt Chalmers and Develin Creek projects.

As copper prices rise, Garimpeiro asks where the next junior success story will be found. Pic: Getty Images

“Garimpeiro” columnist Barry FitzGerald has covered the resources industry for 35 years. Now he’s sharing the benefits of his experience with Stockhead readers.

Run down the table of ASX-listed copper stocks with annual production of 10,000-40,000tpa and the market caps of those in the category range from $150 million up to $690 million, roughly speaking.

Actually, it is very roughly speaking, given the markets caps cover companies which also have pure gold operations and/or lead/zinc/silver production. So the copper production underpinning the market caps is often stated on a copper equivalent basis.

The bigger point today is that ASX copper stocks with 10,000tpa-plus production, be it on an equivalent basis or not, are being well supported by the market because copper has been on a tear early in 2025, rising some 13%.

The mass movement of copper into the US – just in case it too is hit by tariffs – has much to do with the more recent price strength. Comex copper futures in the US surged to US$4.80/lb on Friday, a major premium on LME metal.

Tentative signs of rising industrial production in the major economies comes as the supply side of the electrification metal does what it normally does – disappointing to the downside.

Further out, there is the promise of a supply deficit that BHP and others think is around the corner.

It means that just about everyone is bullish on the outlook for copper.

Looking for leverage

As highlighted previously, there are few options on the ASX for exposure to the copper bull thematic. BHP and Rio Tinto are the biggest producers, but Garimpeiro is more interested in leveraged plays in the sector.

It’s why he took a look during the week at the central Queensland focussed QMines (ASX:QML), which listed on the ASX back in May 2021 with an ambition to return the historic Mt Chalmers copper-gold mine near Rockhampton to production.

The standout thing about QMines for Garimpeiro is its modest market cap of $18 million on its mid-week closing price of 5.2c before going in to a trading halt while a placement is completed.

Terms seen by Stockhead suggest Canaccord Genuity is on the ticket, looking to raise $3.5m at 4.5c a share, with the capacity to accept oversubscriptions of up to $1.5m.

The current market cap is not a lot for a company on its way to becoming a 10,000-20,000tpa copper equivalent producer.

A re-rating seems to be in order, and it could be that 2025 will be the starting point.

That potential was pretty much captured in a preliminary feasibility study on Mt Chalmers in April last year. A 10.4 year project costing a comparatively low $191m was shown to have a 1.8 year payback and a net present value of $373m.

Consider that as a starting point as QMines’ footprint in the Rockhampton region has got bigger with the addition of new satellite ore sources. Metal prices have also swung higher, particularly for gold, with the yellow metal now $US550/oz more than the PFS assumption.

It means that there will be a lot of interest in an updated and revised mine plan for Mt Chalmers, expected in the third quarter. First up there will be a resource update for the satellite deposits at Develin Creek acquired last year.

The Develin Creek pickup delivered the Scorpion and Window deposits with QMines busy with the drill rig at Scorpion in the first instance. Recent results were impressive, firming the belief that Scorpion is on its way to becoming
an open-cut feed source to the Mt Chalmers mine plan.

The headline hit was 114m at 1.65% copper from 11m. QMines rightly noted that the hole was drilled down dip so the result did not represent the true-width of the mineralisation. But as a test of the continuity, dip and consistency of the orebody, the hole was a winner.

The company plans to drill another known deposit (Sulphide City) at Develin Creek in the second quarter. The historic name hints that the drilling program will be one to watch as the addition of a potential sulphur leg to the QMines story could be in the making.

For more on QMines, check out Garimpeiro’s Explorers Podcast with QMines executive chairman Andrew Sparke during the week. It is interesting stuff.

The views, information, or opinions expressed in  this article are solely those of the columnist and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.

At Stockhead, we tell it like it is. While QMines is a Stockhead advertiser, it did not sponsor this article.

Originally published as Barry FitzGerald: Copper is making its run and so is soon to be cashed up QMines