BHP Group Ltd has agreed to invest A$40 million (US$25 million) in Cobre Limited’s Kitlanya Projects in Botswana, allowing BHP to earn a 75% interest. This agreement is part of Cobre’s strategy to explore for Tier 1 copper-silver deposits while continuing its independent operations in other projects.
BHP Group Ltd has entered into an Earn-In Agreement with Cobre Limited (ASX: CBE) to explore for copper-silver deposits on Cobre’s Kitlanya Projects in Botswana. This agreement will see BHP committing up to A$40 million (approximately US$25 million) for exploration initiatives, granting them the option to earn a 75% interest in these projects situated within the Kalahari Copper Belt. This initiative comes after Cobre’s successful involvement in the 2024 BHP Xplor program.
The key terms of the agreement include a guaranteed US$5 million in funding within two years and a planned exploration budget of US$7 million for Kitlanya starting in April 2025. If BHP funds the total of US$25 million, they will secure an interest in the projects. Cobre Botswana is to take on the operator role, receiving a management fee and potential loans from BHP to assist with joint venture expenditures.
Additional payment incentives include a maximum of US$10 million contingent on the declaration of a maiden JORC Compliant Mineral Resource at Kitlanya. If the agreement is terminated but BHP has invested at least US$20 million, they will receive a 2.0% net smelter royalty. Importantly, the agreement does not impact Cobre’s flagship Ngami and Okavango Copper Projects, which will continue to be managed independently.
Cobre has expressed strong confidence in the potential of its projects to yield Tier 1 copper-silver deposits, with the partnership providing necessary funding and expertise. The initial exploration program will include deep diamond drilling and seismic surveys aimed at validating key mineral system components necessary for discovering significant copper deposits. The first phase of drilling is set to commence in April 2025.
Prominent figures including Tim O’Connor from BHP and Adam Wooldridge, CEO of Cobre, have expressed enthusiasm about the exploratory opportunities arising from this agreement. They emphasized the importance of collaboration in pushing forward exploration efforts in Botswana, highlighting the region’s potential for significant copper-silver resources. Moreover, Cobre’s strategic approach involves advancing its existing projects while cultivating new discoveries in partnership with BHP.
BHP’s significant investment in Cobre Limited’s projects marks a pivotal moment in the exploration for Tier 1 copper-silver deposits in Botswana. The Earn-In Agreement not only provides substantial funding but also facilitates a collaborative exploration strategy that aims to leverage the expertise of both companies. By maintaining independent operations of its flagship projects, Cobre is poised to explore new opportunities while ensuring stability in its existing ventures.
Original Source: investingnews.com
