QMines : Mt Chalmers Exploration Update

Mt Chalmers Exploration Update

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MT CHALMERS

Highlights

4 July 2022

74 diamond and RC holes for 10,157m drilled completed since listing;

Wider than expected mineralised intersections reported in several drillholes;

Multiple wide intersections in recently reported drillholes demonstrate potential for significant resource upgrade including¹;

• 61m @ 3.83 % CuEq (MCDD017)²
• 67m @ 1.51 % CuEq (MCDD044)³
• 69m @ 2.03 % CuEq (MCRC012)⁴

RC drilling scheduled to continue with 1,800 - 2,000m expected to be delivered each month;

Ten RC holes submitted for assay with results expected shortly.

¹ Individual grades presented in table 1.

• ASX Announcement -Multiple WideHigh-GradeIntersections Outside Known Resource, 6 October 2021

• ASX Announcement -Further BroadHigh-GradeCopper, Gold and Zinc Intersections at Mt Chalmers, 28 April 2022 ⁴ ASX Announcement -More Outstanding Copper & Gold Results at Mt Chalmers, 16 June 2022

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Overview

QMines Limited (ASX:QML) (QMines or Company) is pleased to provide the following update on recent diamond and RC drilling programs at its flagship Mt Chalmers copper and gold Project, located 17km north-east of Rockhampton in Queensland (Figure 1).

Infill and extensional drill holes in and around the Mt Chalmers resource have retuned several impressive mineralised zones since drilling commenced at the Mt Chalmers Project in March 2021. Outstanding results have been retuned in multiple diamond and RC drillholes with peak grades up to 38.8% CuEq in drill hole MCDD017. All CuEq results from QMines drill holes are now summarised in Table 1 with base and precious metal grades also shown.

Figure 1: Mt Chalmers Project, tenure, geology and infrastructure.

Management Comment

QMines Executive Chairman, Andrew Sparke, comments:

"The summary of our results to date clearly shows Mt Chalmers is the high quality copper and gold asset with strong growth potential. With over 10,000m drilled since listing we are now starting to see the upside potential of this asset.

The recent acquisition of the Company's RC drill rig is deliver significantly more metres drilled per month. We expect to deliver an additional 10,000 metres of RC results by November 2022 leading to our third resource upgrade and consistent new flow over this period."

Diamond and RC drilling has been ongoing at Mt Chalmers since drilling operations commenced in March 2021. The Company has completed approximately 5,900 metres of diamond and approximately 4,300 metres of RC drilling to date.

To accelerate RC drilling operations the Company made the decision to acquire an RC drill rig with support vehicles and equipment (Figure 2). Experienced drilling personnel were hired to manage, run and maintain the drilling equipment. QMines has also built a base of operations and workshops on site during January - March 2022 (Figure 3). The new RC rig commence drilling in April 2022 at the Mt Chalmers Project.

The Company is now reaping the benefits of this investment with an accelerated drill program and an increase in samples delivered to the laboratory for analysis. This has allowed the Company to move towards an upgraded resource at Mt Chalmers faster than would have otherwise been possible.

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Figure 2: QMines RC drilling rig operating at the Mt Chalmers Project, June 2022.

Figure 3: QMines operating base, biodiesel storage, core yard and workshops constructed between January - March 2022.

Recent analysis has shown that some of the historical drilling was not analysed for precious metals or zinc. All drilling by QMines has been analysed for a broad suite of economic minerals including copper, gold, silver, lead and zinc. The infill drilling will not only improve confidence categories in the planned Mineral Resource Estimate, but also allow for better estimation of gold and silver.

Additional work is being undertaken to better understand the distribution and controls on gold mineralisation within the system as recent drilling has highlighted the potential for a late gold overprint.

Both QMines and historical drillholes can be seen in Figures 4 and 5, with Sections AA' and BB' shown in plan in Figures 7 and 8. Sections AA' and BB' show historical and recent QMines drillhole intersections displayed as copper equivalents.

The Mt Chalmers drilling program will continue with the Company planning to deliver a further 20,000 metres of RC drilling in line with the projects planned 30,000 metres of drilling. Investors can expect consistent news flow with results to be reported to the market on a regular basis.

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Copper Equivalent Calculations

All Copper Equivalent (CuEq) figures included in this announcement are calculated based on the following formula:

CuEq (%) = (Cu grade x Cu recovery) + ((Pb grade x Pb recovery x Pb price)/Cu Price) + (Zn grade x Zn price x Zn recovery)/Cu price) + ((Au grade x Au price x Au recovery)/Cu price) + ((Ag grade x Ag price x Ag recovery)/Cu price).

• All grades are converted to % and prices converted to $/t prior to calculating CuEq.
• Commodity price used include: Au price of US$1,900/oz, Ag price of US$25/oz, Cu price of US$6,655/t, Pb price of US$2,450/t, and Zn price of US$3,450/t.
• The following metallurgical recoveries have been applied: 97.0% Cu, 87% Au, 70.5% Ag, 85.0% Pb and 77.0% Zn.

It is the company's opinion that all the elements included in the metal equivalents calculation have a reasonable potential to be recovered and sold. CuEq with all results for base and precious metals that make up the CuEq are also shown. The CuEq formula uses the same metal price assumptions and metallurgical recovery grades used in the Company's recent resource upgrade delivered to the market in December 2021¹.

Figure 4: QMines and historical drillhole locations used in Sections AA' and BB'.

¹ ASX Announcement - Mt Chalmers Resource Upgrade, 1 December 2021.

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Figure 5: Section AA' mineralised CuEq intersections with revised wireframe and interpreted geology, June 2022.

Figure 6. Section BB' mineralised CuEq intersections with revised wireframe and interpreted geology, June 2022.	5