BHP has struck a deal with Cobre to invest $25 million in exploring copper-silver deposits at the Kitlanya projects in Botswana. This investment targets Cobre’s Kitlanya East and Kitlanya West copper projects on the Kalahari Copper Belt’s basin margins. The agreement stems from Cobre’s involvement in the 2024 BHP Xplor program, which funded a seismic survey at Kitlanya West.
Under this agreement, BHP commits to injecting a minimum of $5 million within two years, with an allocated budget of $7 million for exploration at the Kitlanya projects, commencing in April 2025. The exploration plan encompasses deep diamond drilling and 2D seismic surveys to assess the mineral system for potential Tier 1 copper deposits. Drilling activities are scheduled to kick off in April 2025, focusing on areas identified in the 2024 seismic initiative.
BHP also secures an option to acquire a 75% interest in the Kitlanya projects by investing $25 million, including the initial $5 million. During the earn-in phase, Cobre Botswana will act as the operator, receiving an annual management fee of at least $250,000. Notably, this agreement excludes Cobre’s Ngami and Okavango copper projects, which Cobre will continue to develop independently.
Cobre’s CEO, Adam Wooldridge, views the partnership with BHP as a pivotal moment for the company, underscoring the success of BHP’s Xplor program. He emphasizes that this collaboration will provide the necessary funding and support to implement a technology-driven work program aimed at uncovering potential Tier 1 deposits within the Kitlanya East and West projects. Meanwhile, Cobre will advance its Ngami and Okavango copper projects concurrently.
Upon establishing a 75:25 joint venture, BHP may extend a loan to Cobre for its share of JV expenses until the final investment decision. The JV agreement also outlines that if a participant’s interest in the venture falls below 10%, the other participant retains the right to purchase that party’s interest at fair market value.
Furthermore, an additional $10 million will be payable to Cobre once a JORC-compliant mineral resource is declared at the Kitlanya Projects. In case the agreement terminates during the earn-in phase, with BHP contributing at least $20 million, BHP will be entitled to a 2% net smelter royalty on the Kitlanya Projects. Cobre can potentially repurchase 50% of this royalty under specific conditions.
BHP Group’s exploration officer, Tim O’Connor, expresses enthusiasm about the continued partnership with Cobre Limited through this agreement. He highlights the significant exploration potential in Botswana’s Kitlanya projects, emphasizing BHP’s commitment to leveraging its expertise and resources for this venture.
This collaboration signifies a promising opportunity to unearth Tier 1 copper-silver deposits, reflecting the high caliber of partnerships emerging from the BHP Xplor program. The joint efforts between BHP and Cobre are poised to drive exploration and potentially lead to significant discoveries in the copper sector.
📰 Related Articles
- BHP Invests AU$40 Million in Cobre’s Botswana Copper Projects
- BHP Invests $10.8 Billion in Chile’s Escondida Copper Mine
- Antofagasta Invests $200 Million in Cachorro Copper Project Expansion
- JCHX Mining Invests $230 Million in Alacran Copper-Gold-Silver Mine
- BHP Boosts Copper Production in Chile Amid Rising Demand