Sluggish start for miner
With copper prices surging to near record highs, you might have expected a Queensland-focused explorer hunting the precious metal to soar like a bottle rocket when it kicked off trading Thursday on the ASX.
But unfortunately that didn't happen, with QMines suffering a surprisingly sluggish start. Its shares edged down slightly below the IPO issue price of 30 cents and stayed there all day, closing at 27 cents.
Yet chairman and co-founder Andrew Sparke (illustrated) remains bullish on the outlook for the company, which raised $11.5m from investors, including a sizeable contingent of institutional and European-based backers. That exceeded their target of a $10m minimum.
He and his managing director, Dan Lanskey, will now turn their attention to reviving the long-dormant Mt Chalmers copper and gold mine, located about 17 km outside of Rockhampton.
They also intend to resuscitate three other mothballed copper and gold projects located near Warwick and Stanthorpe.
"It's really quite exciting and we're really pleased to be in Queensland,'' Sparke told City Beat this week from his Sydney base, where he also oversees investment group Olive Capital.
"We see Queensland as the pre-eminent place to be exploring for large copper deposits.''
QMines' flagship Mt Chalmers open-pit site was mined periodically between 1898 and 1982, when falling prices meant further work no longer stacked up financially.
That's hardly the case now, with copper fetching more than $US10,000 a tonne last week for the first time in a decade. That's just shy of the all-time high of $US10,100 reached in early 2011.
Prices have more than doubled since March last year, when copper sank to a recent low of just $US4371 a tonne. Some market analysts now tip it to reach $US15,000 a tonne by 2025.
Sparke attributes the rebound to a spike in demand as economies recover from the pandemic and government stimulus is targeted at infrastructure projects, including renewable power initiatives that need lots of copper.
Yet the stuff won't be coming out of the ground at Mt Chalmers quite yet.
Drilling and other exploratory work will take up the next two years even though plenty of historical data about the site still exists.
QMines will be deploying new technologies that have been developed since the mine was last active, including something known as an "aeromagnetic survey'' carried out by helicopter.
That data, gathered from electrical pulses scanning the earth, will help create 3D models to pinpoint the optimal spots to dig.
"What we're doing is coming in with a fresh approach and applying more modern day technology,'' Sparke said.
When Mt Chalmers and other sites are eventually up and running, the company has vowed to become "Australia's first zero carbon copper and gold developer''.
In a bid to reassure investors, Sparke and the other directors have plenty of skin in the game too.
They own about 30.7 million shares, or just over a quarter of the 110.5 million shares on offer.
Their holding was worth nearly $8.3m at the close of the first day of trade.
Originally published as Sluggish start for miner