Cobre Limited has partnered with BHP Group Ltd for up to A$40 million to explore copper-silver deposits in Botswana’s Kitlanya Projects. The agreement allows BHP to earn a 75% interest in the projects through exploration funding, with specific terms outlined for both parties. This collaboration highlights confidence in the Kalahari Copper Belt and aims for significant mineral discoveries while Cobre retains control over its other projects.
Cobre Limited (ASX: CBE) has announced a partnership with BHP Group Ltd (BHP) through an Earn-In Agreement, where BHP will invest up to A$40 million for exploration activities at Cobre’s Kitlanya Projects located within the Kalahari Copper Belt in Botswana. This agreement follows Cobre’s engagement in the 2024 BHP Xplor program and aims for BHP to earn a 75% interest in the projects by funding US$25 million for exploration.
The funding agreement includes a minimum of US$5 million, committed within two years following the commencement of the project, with an exploration budget of US$7 million beginning in April 2025. Cobre Botswana will serve as the operator for the duration of the earn-in phase, collecting a management fee of a minimum of US$250,000 per annum. BHP may also provide loans for Cobre’s share of joint venture expenditures until a final investment decision is reached.
Additional provisions of the agreement state that Cobre could receive up to US$10 million once a maiden JORC Compliant Mineral Resource is declared at the Kitlanya Projects, based on a defined copper content metric. If the agreement is terminated after BHP has funded at least US$20 million, BHP will gain a 2% net smelter royalty unless Cobre elects to buy back half of that royalty.
The partnership highlights Cobre’s confidence in the potential for significant copper-silver deposits within its projects. The work program will focus on a series of deep drilling initiatives and seismic surveys targeted at identifying critical geological conditions for Tier 1 deposit formation, with drilling commencing as scheduled in April 2025.
Key executives from both companies have expressed enthusiasm for the partnership. Tim O’Connor from BHP stated, “This collaboration reflects our excitement for the exploration potential in Botswana.” Adam Wooldridge, CEO of Cobre, emphasized the importance of the partnership for pursuing the identified opportunities, while Martin Holland, Chairman of Cobre’s board, expressed gratitude towards BHP and his internal team for their contributions.
The Kalahari Copper Belt’s geological setting is favorable for copper-silver mineralization due to the interaction of sedimentary rock formations, providing ideal conditions for the formation of large deposits, particularly in areas exhibiting structural folding. The upcoming exploration aims to test these identified areas for potential copper-rich accumulation, aligning with the strategic exploration goals of both Cobre and BHP.
In summary, Cobre Limited has secured a significant partnership with BHP, which will invest up to A$40 million to explore copper-silver deposits at Cobre’s Kitlanya Projects in Botswana. This arrangement underscores the potential of the Kalahari Copper Belt and aims to facilitate substantial discoveries, while Cobre maintains independent control over its other projects. This collaboration brings together the financial backing and expertise of BHP, positioning Cobre favorably in the mining sector.
Original Source: investingnews.com
