Thick high grade copper: Scorpion packs a major sting at QMines’ Develin Creek

A hit of 114m at 1.64% copper with zinc, gold and silver demonstrates the potential of QMines’ Develin Creek copper project
Resource upgrade due this quarter for Scorpion and Window deposits, where ~5000m of RC drilling has been completed by QML in a maiden campaign
Develin Creek and larger Mt Chalmers project to benefit from improving copper market dynamics

Special Report: QMines has reported a string of stunning high grade copper intercepts at its Develin Creek project near Rockhampton in Queensland as the emerging player looks to capitalise on the coming boom for the red metal.

They include a strike of 114m at 1.64% copper, 0.86% zinc, 0.3g/t gold and 13g/t silver from 11m in hole DCRC040 at the Scorpion deposit, completed down dip of known open pit resources as QMines (ASX:QML) looks to validate historical results with modern RC drilling.

That strike included higher grade intervals of 23m at 4.04% copper, 1.12% zinc, 0.61g/t gold and 26.1g/t silver from 55m, and 13m at 3.15% copper, 1.37% zinc, 0.52g/t gold and 20g/t silver from 94m.

Other standout results clocked in at:

88m @ 1.06% copper, 0.93% zinc, 0.26g/t gold and 8.6g/t silver from 3m (DCRC041) including:
- 5m @ 3.56% copper, 1.23% zinc, 0.58g/t gold, and 19.2g/t silver from 86m; and
- 7m @ 3.45% copper, 1.6% zinc, 0.73g/t gold, and 24g/t silver from 98m.
35m @ 1.32% copper, 2.25% zinc, 0.35g/t gold and 14.8g/t silver from 56m (DCRC037).

Several holes completed in the maiden drill program at Develin Creek by QML ended in mineralisation, demonstrating the potential of the Scorpion deposit to keep growing at depth.

They already host a resource of 3.2Mt at 1.05% copper, 1.22% zinc, 0.17g/t gold and 5.9g/t silver, with 53% of that inferred and 47% in the higher confidence indicated category.

Results from the 5064m maiden RC program will contribute to an updated resource estimate due in the current March quarter.

QML executive chairman Andrew Sparke says the results suggest Scorpion will be a compelling open pit mining addition to its nearby Mt Chalmers operation.

“Our maiden drilling program at Scorpion has been very productive, confirming and extending the mineral envelope at our Develin Creek project,” he said.

“We focussed on the Scorpion deposit first due to its shallow and high-grade nature. This makes Scorpion a compelling open pit mining addition to the Mt Chalmers mine plan.

“Drilling has delivered some excellent results, with hole DCRC040, whilst being down dip, shows consistent high-grade base and precious metal mineralisation over 114 metres, whilst still ending in mineralisation. It also shows the deposit’s predictability for future open pit mining operations.”

Develin Creek is shaping up nicely for a resource update. Pic: QML

Copper boom

Mt Chalmers has a history as a high-grade producer, delivering 1.2Mt of ore at a grade of 2% copper, 3.6g/t gold and 19g/t silver between 1898-1982.

Positioned for a revival with copper prices running at historically high levels of over US$9000/t, QML has accumulated significantly more than that across Mt Chalmers and Develin Creek, with a combined inventory of 15.1Mt at 1.3% CuEq for 195,800t of copper equivalent metal.

The recent drill program at Develin Creek validated the historical drilling database confirming both the tenor and continuity of high-grade massive sulphide mineralisation at Scorpion, while infill and step out drilling at the Window deposit also posted consistent and comparable results to historical drilling.

QML is planning to drill a further two to three diamond holes to test down-dip extensions and for metallurgical testwork at Scorpion.

While not as high in grade, results from Window also delivered consistent mineralisation, with the final two RC holes punched into the deposit returning intercepts of 50m at 0.81% copper from 45m and 34m at 0.53% from 55m. Window delivered a result in November of 61m at 0.75% from 49m, including 5m at 2.33%.

QMines is aiming to be a major player in the Queensland copper industry. Pic: QML

Historic drilling was carried out on a nominal spacing of 50m, but QML has tightened that significantly to 25m – likely dense enough to upgrade resource classification from inferred to indicated and measured categories.

That is generally considered a high enough confidence level to underpin the establishment of a reserve, a key step in the establishment of a sustainable mining operation.

There is a dearth of those available for ASX investors, especially in Australian jurisdictions, putting a premium on assets like QML’s.

While deposits like Mt Chalmers and Develin Creek won’t make a dent in supply shortages expected in copper by the end of this decade, they will be the first to profit as prices rise due to their lower capital costs compared to bulk, low grade porphyries.

Studies on the way

A PFS on the Mt Chalmers project released in April last year showed it would produce 65,000t copper, 160,000oz gold, 30,600t zinc, 1.8Moz silver and 583,000t pyrite over an initial 10.4 year mine life.

Even at those rates it boasted an IRR of 54%, NPV of $373.4m and free cash flow forecast of $636m, paying back a $192m construction bill in 1.84 years.

The addition of the upscaled Develin Creek to that will no doubt enhance the attractiveness of the Sunshine State development.

Among other planned milestones, this year QML is expected to start RC drilling at Develin Creek’s Sulphide City deposit in the June quarter, open pit optimisation and mine scheduling in the September quarter and commence environmental studies for Mt Chalmers.

Regional mapping and drill target prioritisation at Mt Chalmers will be followed in Q3 by exploration RC drilling of the highest priority regional prospects, while in the same quarter the big one – an updated Mt Chalmers mine plan, PFS ore reserve and financial model – is due.