QMines has agreed to acquire the Develin Creek copper-zinc project 80km north-west of Rockhampton in central Queensland, Australia, from Zenith Minerals.

The Develin Creek project is located 90km west of QMines’s Mt Chalmers copper and gold project.

QMines expects the acquisition to be ‘very complementary’ to its Mt Chalmers project due to the proximity and high-grade nature of the copper and zinc resource, and ‘bodes well’ for the potential development of the combined resources.

The transaction has a total consideration of A$4.5m ($2.89m) in cash and shares, and additional work commitments.

Under the term sheet, QMines will acquire the Develin Creek project in a two-staged transaction.

The company will initially acquire a 51% stake in the copper-zinc project by paying A$1.2m in cash and issuing A$1m worth of QMines shares to Zenith.

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QMines will acquire the additional 49% stake in the project for a further A$1.3m in cash and A$1m worth of QMines shares within a 12-month period.  

Furthermore, QMines is required to complete 500m of diamond drilling and a detailed metallurgical study on the existing inferred mineral resource of the Develin Creek project within 12 months.

QMines managing director Andrew Sparke said: “Since listing in only May 2021, the QMines team has rapidly grown its copper resources at the Mt Chalmers project. We always believed that the Develin Creek asset was very complementary and would provide the scale required to progress the Mt Chalmers project towards sustainable copper production.”

Proceeds from the sale will be used by Zenith to fund its lithium and gold project portfolio and for working capital.

Zenith executive chair David Ledger said: “The divestment provides Zenith with immediate cash but more importantly allows us to continue our focus on our lithium assets. We will continue to review the asset base and monetise projects at the appropriate times.”