QMines takes key step towards Mt Chalmers development with mining lease application

QMines has submitted a mining lease application for its Mt Chalmers copper-gold project
Project already has an ore reserve and PFS outlining attractive economics
Drilling to start at nearby Develin Creek project that can grow the scale of a potential mining operation at Mt Chalmers

Special Report: QMines has taken another step towards developing its long life, low cost and high margin Mt Chalmers copper-gold project with the submission of a mining lease application to the Queensland Government.

The application for the project, which sits just 17km northeast of Rockhampton, was made after the Department of Resources provided feedback on the application and expressed its satisfaction that it could be made.

A Mining Lease number of ML 100403 has now been allocated to the project.

In April this year, QMines (ASX:QML) delivered 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.

It also unveiled an attractive pre-feasibility study that outlined a >10 year mine development with cashflow of $636m to power NPV and IRR of $373m and 54% respectively.

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

The company noted that getting to the position of being able to apply for a mining lease in just over three years was a tremendous achievement.

Just the beginning

QML added that while the recent PFS on the Mt Chalmers deposit had demonstrated its potential to be a long life, low cost and high margin mining operation. The project also has plenty of immediate and known upside, with five additional deposits at the Mt Chalmers and Develin Creek projects that fall outside of the current mine plan.

Highlighting the potential for more finds, a recent review of historical rock chips at the underexplored Cawarral and Mt Wheeler goldfield about 6km north-northeast of the historical Mt Chalmers mine returned bonanza grades of up to 256g/t gold.

This search for forgotten, but not lost, treasure uncovered by previous explorers also yielded a stunning 3m intersection grading 154g/t gold in RC hole MWC07 at Cawarral.

QML believes that these areas, which saw little modern exploration, were inadequately tested by previous explorers and there is potential to find an economic gold deposit with further exploration drilling.

Meanwhile, the Develin Creek project about 90km west of Rockhampton currently has a resource of 3.2Mt at 1.05% copper, 1.22% zinc, 0.17 g/t gold and 5.9 g/t silver, 47% of which is in the higher confidence indicated category.

The project, which the company picked up a 51% interest in from Zenith Minerals (ASX:ZNC) in August 2023 and has the right to acquire the remaining 49%, contains two high-grade copper-zinc deposits.

Plan ahead

QML is now preparing to start a maiden program of up to 10,000m of drilling at Develin Creek 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 has the potential to grow the scale of a future mining operation at Mt Chalmers.

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.