QMines is the newest copper play to light up the ASX boards, with the Queensland-focused explorer making its debut today.
The investor appetite for quality copper stocks continues unabated as the price of the red metal edges ever closer to its all-time high of over $US10,100 ($13,099) a tonne set back in February 2011.
QMines is making its debut following an IPO that saw it attract over $12m worth of subscriptions, beating its minimum target of $10m. The company will add just over $11.5m to the coffers after scaling.
There was strong participation from institutional and high net worth investors in Europe including Germany’s Deutsche Rohstoff. The three European investors collectively injected $4.6m.
It is the perfect time for QMines to join the ASX. The copper bulls are out in force, and not just on the near-term potential. The longer term is looking just as good.
Market commentators like Goldman Sachs see copper hitting $US15,000 a tonne by 2025.
Back in January, when QMines’ IPO was priced, copper was just reaching around $US8,000 per tonne.
According to Hong Kong-based Orior Capital analyst Simon Francis, the market was valuing a group of QMines’ copper and gold explorer and developer peers at around $350 per tonne of copper equivalent resources.
Since then, both copper and company valuations have soared. Copper has risen 25 per cent on the London Metal Exchange, and peer valuations are now around $620 per tonne, up 77 per cent in the first four months of the year, according to Francis.
QMines has 100 per cent ownership of four advanced copper-gold projects in Queensland, spanning 978sqkm, which includes the high-grade historic Mt Chalmers copper-gold mine. It will be one of only a handful of listed copper companies on the ASX with a brownfield copper asset in a Tier 1 jurisdiction like Australia.
The company has its sights firmly set on reviving the Mt Chalmers mine, which was mined sporadically between 1898 and 1982, producing 1.24 million tonnes at 2 per cent copper, 3.6 grams per tonne (g/t) gold and 19g/t silver.
No mining has been undertaken since 1982, but there’s still plenty of exploration upside.
QMines has already delivered an initial JORC 2012-compliant inferred resource of 3.9 million tonnes at 1.15 per cent copper, 0.81g/t gold and 8.4g/t silver (which combined is 1.87 per cent copper equivalent). With a copper grade over 1.87 per cent, interest in the outcome of the company’s ambitious drill program to increase tonnage is likely to be high.
The cash raised from the IPO will be used to expand the resource and assess the development potential of Mt Chalmers.
QMines has mapped out a large drilling program of 32,000m to 62,000m over the next two years and is expected to kick off the drill campaign immediately.
This article was developed in collaboration with QMines, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.