QMines raises $5m to boost exploration at its copper and gold projects in Queensland

QMines raises $5m through two-tranche private placement priced at 4.7c per share
Strong response prompted increase in size of raising from $2m to $5m
Proceeds will be used to accelerate exploration and development of the Mt Chalmers and Develin Creek projects

Special Report: Investors have chimed in with their support for QMines’ plan to accelerate exploration and development of its Mt Chalmers and Develin Creek projects by backing a $5m placement.

While the company had originally sought to raise $2m, the strong demand from new and existing shareholders led to the raising growing into a two-tranche placement of almost 106.4 million shares priced at 4.7c to raise $5m.

QMines (ASX:QML) executive chairman Andrew Sparke and chief operating officer James Anderson are also putting their money where their mouths are by subscribing for $420,000 worth of shares.

The first tranche of 48.9 million shares will be issued within the company’s existing 15% placement capacity under ASX Listing Rule 7.1 and 10% placement capacity under ASX Listing Rule 7.1A.

The remaining 57.4 million shares – including the shares that Sparke and Anderson are subscribing for – will be issued subject to shareholder approval at a general meeting to be held in mid-September.

Proceeds will be used to fund exploration and development plans at the Mt Chalmers and Develin Creek projects and pay for the remaining 49% stake in the Develin Creek project.QML’s management said it was pleasing to see strong demand for the placement as it demonstrates the quality of its copper and gold projects.

Progressing projects

The company recently submitted a mining lease application for its Mt Chalmers copper-gold project just 17km northeast of Rockhampton.

It follows the April delivery of a maiden ore reserve of 9.6Mt grading 0.65% copper, 0.48g/t gold, 0.27% zinc, 5.2g/t silver and 4.3% sulphur – for contained resources of 62,600t copper, 147,600oz gold, 25,700t zinc, 1.55Moz silver and 418,300t sulphur.

Mt Chalmers is also the subject of an attractive pre-feasibility study that outlined a >10 year mine development with cashflow of $636m to power a NPV and IRR of $373m and 54%, respectively.

Capex is estimated at just $191.9m with payback expected in just 1.84 years.

There is also plenty of upside with five additional deposits at the Mt Chalmers and Develin Creek projects that fall outside of the current mine plan.

Looking ahead, QML is currently preparing to start a maiden program of up to 10,000m of drilling at Develin Creek (which is 80km north-west of Rockhampton) to improve confidence at the Sulphide City and Scorpion deposits.

Step-out and infill exploration drilling will be carried out using a company-owned drill rig with geological understanding expected to be improved as a result.

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.