Key Highlights

  • QMines has completed the sale of QDrilling Pty Ltd to Gas Field Services Pty Ltd for total consideration of $1.4 million.
  • The consideration is payable in five tranches, with the first $250,000 due on 31 December 2026 and a $400,000 payment due on 30 September 2027.
  • The company's planned Mt Chalmers programme comprises 129 holes totalling about 20,000 metres.

QMines Limited (ASX:QML) has completed the sale of its wholly owned drilling subsidiary, QDrilling Pty Ltd, to Gas Field Services Pty Ltd for total consideration of $1.4 million. The company said the buyer takes 100 per cent of QDrilling's issued capital. The price is payable in instalments rather than upfront.

According to the announcement, the $1.4 million is deferred across five tranches. Three payments of $250,000 are due on 31 December 2026, 31 March 2027 and 30 June 2027, and a payment of $400,000 is due on 30 September 2027. The fifth tranche, a further $250,000, has no stated due date and may be settled in cash or in drilling services, at QMines' election.

QMines said the obligations are supported by a security interest over the QDrilling shares and its drilling equipment. The company has not disclosed any upfront cash receipt, and the earliest payment it identifies is the end-December 2026 instalment.

Reasons for the sale

QMines describes QDrilling as a non-core business. It said the sale reduces the costs of owning and maintaining equipment and frees capital for exploration and development. Executive Chairman Andrew Sparke said the sale unlocks $1.4 million in value and allows the team to focus on the definitive feasibility study, project approvals and the drilling campaign.

The company said the existing drilling rig remains at Mt Chalmers under the new ownership, so drilling continues. The final Tranche may be taken as drilling services at QMines' election.

The exploration programme

QMines (ASX:QML) said its planned programme at Mt Chalmers comprises 129 holes totalling about 20,000 metres. Its stated objectives are to extend the existing mineral resource, test mineralised corridors and potentially add deposits to a future mine plan. The company is also working on a definitive feasibility study for Mt Chalmers, with a final Investment decision as its aim. No date for that decision is given.

Resource base

The announcement restates the company's Mt Chalmers ore reserve, estimated in its April 2024 pre-feasibility study at 9.6 million tonnes grading 0.65 per cent copper and 0.48 grams per tonne gold at a 0.3 per cent copper cut-off, split between 5.1 million tonnes Proved and 4.5 million tonnes Probable. The Mt Chalmers mineral resource is 11.3 million tonnes at 0.75 per cent copper and 0.42 grams per tonne gold, including 4.2 million tonnes Measured, 5.8 million tonnes Indicated and 1.3 million tonnes Inferred.

Other resources include Develin Creek, at 4.70 million tonnes at 0.94 per cent copper and 1.00 per cent zinc, and Mt Mackenzie, at 5.22 million tonnes at 1.01 grams per tonne gold. These are previously reported estimates, not new results. The company puts combined reserves and resources across its projects at 9.6 million tonnes and about 22 million tonnes respectively. All three projects are 100 per cent owned and lie within 90 kilometres of Rockhampton.

Conditions and dates

The announcement refers to collection of the deferred payments, the drilling programme, the feasibility study, and the funding and approvals needed before any investment decision. It does not give a timetable for the feasibility study or the approvals process. The next dated milestone it contains is the first $250,000 instalment due on 31 December 2026.