BHP has entered into an earn-in agreement with Cobre to invest up to $25 million (A$39.6 million) in exploring copper-silver deposits at the Kitlanya East and Kitlanya West projects in Botswana’s Kalahari Copper Belt. This investment follows Cobre’s participation in the 2024 BHP Xplor programme, which funded a seismic survey at Kitlanya West.

Under the agreement, BHP will contribute a minimum of $5 million within the first two years, with an initial $7 million allocated for exploration, set to begin in April 2025. The exploration plan includes deep diamond drilling and 2D seismic surveys to assess the mineral system's potential for Tier 1 copper deposits. Mobilization for drilling will commence in April 2025, targeting areas identified during the 2024 seismic programme.

BHP has the option to earn a 75% stake in the Kitlanya projects by fully funding the $25 million investment, inclusive of the initial $5 million. During the earn-in phase, Cobre Botswana will serve as the project operator and will receive a management fee of at least $250,000 annually. The agreement does not cover Cobre’s Ngami and Okavango copper projects, which the company will continue developing independently.

Cobre CEO Adam Wooldridge emphasized the significance of this partnership, stating, “This transaction with BHP is a major milestone for Cobre and a testament to the success of the BHP Xplor programme. The collaboration provides us with the necessary funding and support to execute a technology-driven exploration program aimed at discovering Tier 1 deposits within our Kitlanya projects. Meanwhile, we will continue advancing our Ngami and Okavango copper projects, ensuring multiple avenues for discovery and development.”

Upon forming a 75:25 joint venture (JV), BHP may extend a loan to Cobre for its share of JV expenses until a final investment decision is made. Additionally, if a participant’s stake in the JV drops below 10%, the other party will have the right to acquire it at fair market value. If a JORC-compliant mineral resource is declared at the Kitlanya Projects, Cobre will receive an additional $10 million payment. Should BHP exit the agreement after investing at least $20 million, it will be entitled to a 2% net smelter royalty on the Kitlanya Projects, with Cobre retaining the option to repurchase 50% of the royalty under specific terms.

Tim O’Connor, BHP’s Group Exploration Officer, expressed enthusiasm about the partnership, stating, “We are excited to continue collaborating with Cobre, a distinguished alumnus of the BHP Xplor programme. This agreement underscores our confidence in Botswana’s exploration potential and highlights the strength of partnerships fostered through BHP Xplor. The Kitlanya projects represent a promising opportunity to uncover Tier 1 copper-silver deposits, and we are eager to contribute our expertise and resources to this venture.”