QMines Limited (ASX: QML) - A Boutique Copper Producer.

Samso Insight Episode 119 is with Andrew Sparke, Executive Chair of QMines Limited (ASX: QML)

As the copper price continue to reach all time high status (Figure 1), compnaies such as QMines Limited suddenly comes as an interesting proposition. The resource is small but a recent Pre-Feasibility study is showing that the number could work. In this episode of Samso Insights, we have Andrew Sparke giving us a run down on what could be a copper producer in Queensland, Australia.

Figure 1: Copper price chart. (Source: Trading Economics)

The supply issue for copper has long been talked about and the market seem to have finally caught onto the nearing desperate nature of supply. The aging copper mines are facing rising cost and some of the major mines are also facing sovereign issues. To add to the supply issue, several developing mines are facing question on jurisdiction.

I like companies like QMines as they are always undervalued and are constantly facing funding issues. As the market tightens, these stories begin to get noticed and their valuation begin to move. This is not an endorsement of QMines in any way, as there are still hurdles that could be deal breakers for the company. My comment is merely an observation that has stood the test of time historically.

Check out the Samso Insight conversation with Andrew and make your own decision.

Samso's Conclusion

QMines is a company that may offer investors an opportunity to get in on the copper run.

A rising commodity story that is still early in its journey with many unknowns of trivial hurdles or deal breaker hurdles. Andrew has explained how the story should work but as we know, he is the Executive Chair and his thoughts would deemed to be slightly biased.

That being said, my view is that one has to look at the options out there in the market place for a story that will fit the current narrative of "Need More Copper". QMines, assuming that the numbers continue to stack up will be one of the ones on my watchlist. Fortunately for us punters, the low valuation of companies due to a bearish sentiment in commodities has somewhat naturally reduced our risk.

As for the copper price, if it is to be believed, has a lot of legs to go. Some narratives have gone further and put the copper price at level much higher than Figure 1. I agree that it will go higher but I don't have an understanding on how high.

There are no doubts that the old copper mines are facing rising costs and this is not a small margin. One must remember that if household living expenses are stated to have increased be in the 30% mark, the increase of 30% or more in a mine will make a big difference. I would say that the cost of mining any commodity at the depths that these old copper mines are at will be significant.

At the end of the day, DYOR is the key to any decision making and one has to keep a keen eye on the copper space. When you think about what the implication will mean, the opportunity for shareholder value adding is enormous.

Chapters:

00:00 Start

00:20 Introduction

00:57 Andrew introduce QMines

02:45 Going through the details of PFS

07:05 The upside of Mt Chalmers.

09:36 Any Metallurgical Issues?

11:25 The Products

11:37 The Pyrite Value Story

12:57 Where is the disconnect with value and share price?

15:19 The issue of using Copper Equivalent number.

17:30 The Pros and Cons of taking a position in QMines.

23:17 The Copper Market

26:06 Why QMines?

20:57 Timing for Investors Exit?

27:43 THE CAPEX Advantage

28:45 Conclusion