Cobre Limited has entered an Earn-In Agreement with BHP Group, where BHP will invest up to US$25 million for exploration at Kitlanya Projects in Botswana. This partnership aims for BHP to acquire a 75% interest in the projects, focusing on potential Tier 1 copper-silver deposits, with exploration activities scheduled to begin in April 2025.
Cobre Limited (ASX: CBE) recently announced a significant Earn-In Agreement with BHP Group Ltd, wherein BHP will allocate up to US$25 million (approximately A$40 million) for exploration on Cobre’s Kitlanya East and Kitlanya West Copper Projects in Botswana. This partnership focuses on exploring the Kalahari Copper Belt and enables BHP to acquire a 75% interest in the projects upon fulfilling the investment criteria, following their successful participation in the 2024 BHP Xplor program.
Funding for the exploration expenditure includes an initial commitment of US$5 million to be provided within two years. BHP’s total investment for the Kitlanya Projects is planned at US$25 million, which encompasses the initial funding. Cobre Botswana will operate during the earn-in phase, receiving a minimum management fee of US$250,000 annually, while BHP has provisions to offer a loan to Cobre for joint venture expenses.
An additional contingent payment of up to US$10 million will be given to Cobre upon declaring a maiden JORC Compliant Mineral Resource at the Kitlanya Projects. If the Earn-In Phase concludes prematurely, BHP may retain a 2.0% net smelter royalty, with options for Cobre to repurchase half of this royalty.
The agreement signifies Cobre’s confidence in the potential of its projects to yield Tier 1 copper and silver deposits. BHP’s investment not only funds exploration but also enhances Cobre’s capabilities with scale and expertise in the mining sector. Upcoming exploration work entails drilling and a 2D seismic survey set to commence in April 2025 to assess critical mineral system components.
Tim O’Connor, BHP Group Exploration Officer, expressed enthusiasm for the collaboration, emphasizing the potential for significant discoveries in Botswana. Similarly, Adam Wooldridge, Cobre CEO, highlighted the importance of this partnership, its funding capabilities, and its focus on discovering new deposits. The ongoing advancements on Cobre’s independent projects, Ngami and Okavango Copper Projects, will continue as part of a balanced strategy for potential Tier 1 discoveries.
In summary, Cobre Limited has secured a transformative agreement with BHP that outlines a substantial investment aimed at exploring promising copper-silver deposits in Botswana. The partnership facilitates significant funding, enhances operational capacity, and aims to maximize mineral discovery potential while allowing Cobre to maintain independent operations on other projects. The upcoming exploration endeavors are set to commence in April 2025, marking a pivotal moment for both companies in the mining sector.
Original Source: investingnews.com
