BHP to Invest A$40M in Cobre for Copper-Silver Exploration in Botswana

BHP has signed an Earn-In Agreement with Cobre Limited, investing up to US$25 million for exploration on the Kitlanya Projects in Botswana. This partnership allows BHP to earn a 75% interest while Cobre retains independence over its Ngami and Okavango projects. The initial exploration program is set to begin in April 2025.

BHP Group Ltd. has entered into an Earn-In Agreement with Cobre Limited (ASX: CBE) to explore Tier 1 copper-silver deposits in Botswana. Under this agreement, BHP will invest up to US$25 million (approximately A$40 million) for exploration activities on Cobre’s Kitlanya East and Kitlanya West Projects, aiming to acquire a 75% interest in these projects. This step follows Cobre’s success in the 2024 BHP Xplor program that funded recent seismic surveys on the Kitlanya West Project.

The agreement outlines a minimum funding commitment of US$5 million within two years, with a total exploration budget of US$7 million earmarked for April 2025. BHP’s funding of US$25 million for exploration will include the initial amount, and Cobre Botswana will serve as the operator during this earn-in phase, receiving a fixed annual management fee.

Additionally, Cobre may receive up to US$10 million contingent on a maiden JORC Compliant Mineral Resource declaration at the Kitlanya Projects. If the agreement terminates after BHP invests at least US$20 million, the company will gain a 2.0% net smelter royalty entitlement, although Cobre may buy back part of this royalty under specific conditions. Notably, the agreement does not include Cobre’s flagship Ngami and Okavango Copper Projects, which will be advanced independently.

Cobre’s leadership expressed enthusiasm regarding the deal, emphasizing the confidence in exploring for copper-silver resources in Botswana. The initial exploration program will utilize both deep diamond drilling and seismic surveys to evaluate crucial elements of the mineral system necessary for the formation of Tier 1 copper deposits, with drilling expected to commence in April 2025.

Tim O’Connor, BHP Group Exploration Officer, reaffirmed the collaborative spirit of this partnership, highlighting the potential of the Kitlanya Projects. Cobre’s CEO, Adam Wooldridge, articulated the significance of the partnership, noting its provision of vital funding and technological support, while the company continues to focus on its other copper projects.

In conclusion, BHP Group’s strategic investment in Cobre Limited marks a significant development in the exploration of copper-silver resources in Botswana. The partnership aims to unlock the potential of the Kitlanya Projects while allowing Cobre to maintain independence over its other flagship projects. This collaboration is expected to enhance exploration capabilities and facilitate potential Tier 1 deposit discoveries, positioning both companies favorably in the growing copper market.

Original Source: investingnews.com