QMines Limited: Drilling Intersects New Mineralisation Outside Resource Envelope at Mt Chalmers

HIGHLIGHTS

- Drilling intersects new mineralisation outside resource envelope;

- Visible chalcopyrite in stringer veins intersected in all new holes drilled;

- New diamond core to be despatched to ALS for assay by end of week;

- Assays from the recent RC drilling are currently at ALS and are expected shortly; and

- Two drill rigs at Mt Chalmers expected to accelerate the companies planned 30,000m drill program.

OVERVIEW

QMines Limited (ASX:QML)(FSE:81V)(QMines or Company) wishes to provide the following update relating to its current operations at it’s flagship project, Mt Chalmers, which is located 17km North East of Rockhampton in Queensland (Figure 6).

Mt Chalmers is a high-grade historic copper and gold mine that operated between 1898-1982. Total production of 1,244,618t @ 2.0% Cu, 3.6 g/t Au and 19 g/t Ag was mined during this period. Mt Chalmers has an Inferred Resource (JORC 2012) of 3.9Mt @ 1.15% Cu, 0.81g/t Au and 8.4g/t Ag.¹

The system contains copper, gold, zinc, lead and silver mineralisation and is recognised as one of the highest grade gold VHMS mineral systems in the world.²

Figure 1: Drill Hole MCDD015 Showing Semi Massive Chalcopyrite Stringer

¹ The Mt Chalmers JORC Resource can be found in the QMines Prospectus (Annexure A) – Independent Geologists Report, https://qmines.com.au/prospectus-2/

² The Gold Content of VMS Deposits, Patrick M Langevin, 11 May 2010

NEW MINERALISATION

QMines recent Reverse Circulation (RC) and diamond drilling programs have drilled several holes outside the current resource envelope. The new drill holes have been designed to grow the and provide a better understanding of the geological interpretation of the Mt Chalmers ore body. Collar locations can be seen in Figure 2 and Table 1.

The Company is pleased to report that all diamond holes outside the existing resource envelope have intersected visible chalcopyrite mineralisation in stringer zones. Examples of the chalcopyrite mineralisation are shown in Figures 1, 3 and 4. The new diamond core will be dispatched to ALS Laboratories by the end of the week, with results to be reported to the market when they become available.

Figure 2: Mt Chalmers drilling plan view including the mineralised wireframe projected to surface.

Figure 3: Drill hole MCDD014 showing chalcopyrite stringer veins.

Figure 4: Drill hole MCDD015 showing semi massive chalcopyrite stringer veins.

DISCUSSION

The Kuroko style of mineralisation usually occurs as clusters of mineralised zones, which appears to be the case at Mt Chalmers, which may be only one of several deposits. In addition, the interpreted structural dislocation for the mine area may have caused the break-up of larger mineral bodies structurally, dispersing lenses within the general Mt Chalmers area.

Recent soil sampling data digitised by the Company and announced on 3rd August 2021¹ indicates the potential for the discovery of additional preserved VHMS systems in the region. These soil anomalies appear to have geochemical and lithological similarities to Mt Chalmers.

QMines has recently exchanged on two contracts to acquire 43 acres of land² adjacent to the Mt Chalmers mine site where historical soil sampling display anomalous copper in soil results. This will enable the Company to expand exploration drilling, testing these anomalies in the near future.

¹ https://wcsecure.weblink.com.au/pdf/QML/02402944.pdf,

² https://wcsecure.weblink.com.au/pdf/QML/02405341.pdf

DRILLING STRATEGY

The Company has revised its drilling strategy to now encompass both RC and diamond drilling with the current programs delivering RC drilling for shallow holes, RC pre-collars and diamond tails in the deeper holes and through the Mt Chalmers ore zones. Drilling operations have been varied to suit the Mt Chalmers ground conditions. The drilling conditions experienced, and the updated drilling method at Mt Chalmers, have now enabled more cost effective exploration, delivering better drilling efficiencies and outcomes. The Mt Chalmers ground in and around the existing open pits is fractured and contains fill from the historical mining cycle.

Figure 5: Diamond Drill Rig Operating at the Mt Chalmers Project.

GEOLOGY

The geology of the Mt Chalmers area is relatively well-known with the Mt Chalmers mineralisation being identified as a well-preserved, volcanic-hosted massive-sulphide (VHMS) deposit containing copper, gold, zinc, lead and silver. Mineral deposits of this type are deemed syngenetic and formed contemporaneously on, or in close proximity to, the sea floor during the deposition of the host-rock units. The mineralisation is believed to have been deposited from hydrothermal fumaroles, or direct chemical sediments or sub-seafloor massive sulphide replacement zones and layers, together with footwall disseminated and stringer zones within the host volcanic and sedimentary rocks.

The mineralisation system at Mt Chalmers displays some similarities to Australian VHMS deposits of Cambro-Ordovician and Silurian age, however closer comparison can be made with the Kuroko-style of VHMS of Tertiary age in Japan (Taube 1990).

The Mt Chalmers mineralisation is situated in the early Permian Berserker Beds, which occur in the fault- bounded Berserker Graben, a structure 120km long and up to 15km wide. The graben is juxtaposed along its eastern margin with the Tungamull Fault and in the west with the Parkhurst Fault (Figure 6). The Berserker Beds lithologies consist mainly of acid to intermediate volcanics, tuffaceous sandstone and mudstone (Kirkegaard and Murray 1970). The strata are generally flat lying, but locally folded. Most common lithotypes are rhyolitic and andesitic lavas, ignimbrites or ash flow tuffs with numerous breccia zones.

Rocks of the Berserker Beds are weakly metamorphosed and, for the most part, have not been subjected to major tectonic disturbance, except for normal faults and localised high strain zones that are interpreted to have developed during and after basin formation.

Recent geological work by the Queensland Department of Natural Resources and Mines places volcanic and sedimentary units of the prospective Chalmers Formation, the host unit to the Mt Chalmers copper- gold mineralisation, at the base of the Berserker Beds. The Ellrott Rhyolite and the Sleipner member andesite were emplaced synchronously with the deposition of the Chalmers Formation.

Late Permian to early Triassic gabbroic and dioritic intrusions occur parallel to the Parkhurst Fault. Smaller dolerite sills and dykes are common throughout the region and in the Berserker Beds.

Figure 6: Location of the Mt Chalmers Project, granted tenure, geology and related infrastructure.

WHAT’S NEXT?

- Ongoing drilling results from the planned 30,000m drilling program with two rigs currenlty in operation;

- Settlement of a further 43 acres of land adjacent to the mine site allowing for a number of new soil anomalies to be drill tested;

- Expanded soil testing utilising Niton Portable PAS XRF to deliver real-time soil geochemical data for future drill targeting;

- 1,092-line kilometer Heli-EM survey planned to commence in Q4-2021 to identify further drill targets; and

- Resource upgrade planned to be released to market in Q4-2021.

COVID SAFE PLAN

The Company has managed to continue its drilling operations at Mt Chalmers under the increasingly restrictive COVID cross border conditions imposed by the New South Wales and Queensland state governments. The Company has established a COVID Safe Work Plan which will be uploaded to the Company website shortly.

A number of QMines geological staff have elected to relocate to Queensland to ensure the continuity of the Company’s drill programmes at Mt Chalmers, with staff now located onsite.

Table 1: Mt Chalmers RC and diamond drill hole collar location from drilling completed from July-August 2021.

HOLE ID

HOLE TYPE

LEASE

UTM EAST

UTM NORTH

UTM RL

UTM GRID

PRE COLLAR (M)

TOTAL (M)

EOH (M)

MCDD012

EPM 25935

259728

7421174

MGA94_56

14.3

51.3

MCDD013

EPM 25935

259830

7421299

108

MGA94_56

26.7

82.1

108.8

MCDD014

EPM 25935

259768

7421311

104

MGA94_56

51.9

74.4

126.3

MCDD015

EPM 25935

259735

7421315

100

MGA94_56

35.8

125.8

MCDD016

EPM 25935

259783

7421376

120

MGA94_56

123

150

MCRC001

EPM 25935

260069

7421245

137.64

MGA94_56

142

MCRC002

EPM 25935

259742

7421279

100.2

MGA94_56

131

MCRC003

EPM 25935

259726

7421283

98.5

MGA94_56

131

MCRC004

EPM 25935

259710

7421254.7

97.5

MGA94_56

101

MCRC005

EPM 25935

259733.9

7421231.7

91.5

MGA94_56

MCRC006

EPM 25935

259908

7421109

102.7

MGA94_56

MCRC007

EPM 25935

259887

7421111

102.3

MGA94_56

MCRC008

EPM 25935

259877

7421113

102.5

MGA94_56

* Note Collar Locations in MGA 94_56

* The Mt Chalmers JORC Resource can be found in the QMines Prospectus (Annexure A) – Independent Geologists Report, https://qmines.com.au/prospectus-2/

COMPETENT PERSON’S STATEMENT

The information in this announcement that relates to exploration results is based on information compiled by Hamish Grant, a competent person who is a member of the Australian Institute of Geoscientists (AIG). Hamish Grant is contracted by QMines Limited as Project Geologist. Hamish has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the JORC Code. Hamish Grant consents to the inclusion in this announcement of the matters based on his work in the form and context in which it appears.

ABOUT QMINES

QMines Limited (ASX:QML) (FSE:81V) is a Queensland based copper and gold exploration and development company. QMines is seeking to become Australia’s first zero carbon copper and gold developer. The Company owns 100% of four advanced projects with a total area of 1,096km². The Company’s flagship project, Mt Chalmers, is located 17km North East of Rockhampton. The Project is a high-grade historic mine that produced 1.2Mt @ 3.6g/t Au, 2.0% Cu and 19g/t Ag between 1898-1982. Mt Chalmers has an Inferred Resource (JORC 2012) of 3.9Mt @ 1.15% Cu, 0.81g/t Au and 8.4g/t Ag.¹

QMines’ objective is to grow its resource base, consolidate assets in the region and assess commercialisation options. The Company has commenced an aggressive exploration program (+30,000m) providing shareholders with significant leverage to a growing resource and exploration success.

This announcement has been approved and authorised by the Board of QMines Limited.

PROJECTS

MT CHALMERS (100%)

SILVERWOOD (100%)

WARROO (100%)

HERRIES RANGE (100%)

QMINES LIMITED

ACN 643 212 104

SHARES ON ISSUE:

111,372,748

UNLISTED OPTIONS:

4,200,000 ($0.375 strike, 3 year term)

ASX CODE: QML

FSE CODE: 81V

DIRECTORS AND MANAGEMENT

ANDREW SPARKE

Executive Chairman

DANIEL LANSKEY

Managing Director

ELISSA HANSEN

Non-Executive Director & Company Secretary

JAMES ANDERSON

General Manager Operations

HAMISH GRANT

Project Geologist

QMINES LIMITED (ASX: QML)

Registered Address: Suite J, 34 Suakin Drive, Mosman NSW 2088

Postal Address: PO BOX 36 Mosman NSW 2088

Website: www.qmines.com.au

Email: info@qmines.com.au

Telephone: +61 (2) 8915 6241

Daniel Lanskey, Managing Director

Email: dan@qmines.com.au

Peter Nesveda, Investor Relations

Email: peter@qmines.com.au

Investor Relations, Deutschland

Email: investoren@qmines.com.au

¹The Mt Chalmers JORC Resource can be found in the QMines Prospectus (Annexure A) – Independent Geologists Report, https://qmines.com.au/prospectus-2/