Developer focused on cleaner copper and gold production

28 July 21

Recently listed copper and gold hopeful QMines is targeting zero carbon operations at its Mount Chalmers project in Queensland, marking an Australian first for the base and precious metals sectors.

Zero carbon is not typically mentioned in the same sentence as gold and copper exploration.

But for Queensland-focused QMines (ASX:QML), developing more sustainable mining practices is a key focus.

QMines is aiming to become Australia’s first zero carbon copper and gold producer with its sights set initially on the flagship Mount Chalmers project.

The site was previously a high-grade gold and copper producer, first as an underground mine then as an open pit operation.

According to Executive Chairman Andrew Sparke, the site is already operating completely “off grid” with 50 solar panels, a wind turbine and battery backup used to power the small work camp and site office.

However, Andrew says the company has bigger ambitions as activity ramps up.

“There’s 710 million litres of water in the two old pits on site that contains a lot of hydrogen,” Andrew said.

“We’re investigating options to extract and monetise the hydrogen in the future, plus there’s the potential of using some of it to fuel the site.

“It’s also readily replenishable because there’s a relatively high water table, so it could provide an ongoing source of energy and revenue.”

QMines recently engaged a third party to carry out a carbon audit to determine emissions in the 2020 calendar year.

Because the company had also invested in carbon offsets, it received a carbon negative result.

Andrew says while there was minimal activity through last year, the carbon audit provides a useful benchmark ahead of more activity over coming months.

“The copper thematic is focused on greening the world, so by evolving the way it is mined and processed, we see a lot of opportunities to leverage synergies as that narrative evolves,” Andrew explains.

“We also believe there is an opportunity to attract a premium price for a ‘green’ copper product.

“So we want to see how we can develop this asset in a more sustainable way. We want to be good custodians of the land which means minimising any detrimental impacts on the environment.”

While some of the net zero thinking is still in the early stages, exploration activity is well and truly underway at Mount Chalmers.

“There’s quite a big resource under the two open pits, which we identified from digitising a lot of historical data,” Andrew said.

“We recently completed an 11-hole drilling program to about 1,500m, largely focused on validating the historical drilling data.

“That has allowed us to publish our maiden resource of 73,000 tonnes of contained copper at about 1.9 per cent copper equivalent.

“Our aim is to get to about 200,000 tonnes of contained copper, which is equivalent to appropriately 1.2 million ounces of gold.

“We’re about a third of the way there, but we’ve recently identified another three deposits around the Mount Chalmers pits and we’ve got an RC rig onsite at present drilling a 3,000m program which is focused on growing the existing resource.”

Andrew says while QMines is certainly forging a relatively untrodden path in terms of sustainable copper and gold production, the aim is to give the company an advantage as the landscape changes for business in Australia.

“As governments become more locked into carbon abatement targets, they’re going to start to shift the onus on to business to help deliver,” he said.

“There may not be a broader emissions tax in Australia for some time, but there’ll almost certainly be more focus on incentives for businesses that go down that path and more rigour around reporting by businesses to show what they’re doing to reduce their carbon footprints.

“Miners and energy producers are some of the biggest emitters of carbon so why not start there?”

It is also a shift that’s being driven by preferences from investment markets and while QMines has not made a lot of noise to date about its sustainability intentions, Andrew says the board expects no backlash from capital markets or shareholders.

“There is absolutely a move to ethical investment and its starting with the investment funds,” Andrew said.

“They’re increasingly looking at greener ways of investing and adjusting their portfolios in line with that.

“As a junior, you want to ensure you have access to the biggest pool of capital so you have to address their requirements.”

And that sentiment inevitably flows down to retail investment markets too. While some renewable initiatives are not economically viable at present, one thing Andrew notes is that some of the companies at the forefront of renewable and sustainable sources of energy are trading at quite a significant premium to their peers.

“There’s been a strong narrative around climate change and that’s starting to sink in,” Andrew said.

“People are thinking about how we can generate, store and use energy, and how we leave the land and water in a healthy state after we’ve used it.

“Increasingly, investors are prepared to invest at a premium if companies can show they’re doing those things.”