Cobre Limited has signed an Earn-In Agreement with BHP to explore Kitlanya East and West Projects in Botswana, with BHP investing up to US$25 million to earn a 75% stake. The initial funding of US$5 million is scheduled within two years, with exploration commencing in April 2025. This partnership enhances Cobre’s exploration strategy while allowing independence in its other projects.
Cobre Limited (ASX: CBE) has entered into an Earn-In Agreement with a subsidiary of BHP Group Ltd, committing up to US$25 million (approximately A$40 million) towards exploring Cobre’s copper-silver projects in Botswana. Through this agreement, BHP aims to earn a 75% stake in the Kitlanya East and Kitlanya West Projects, situated in the Kalahari Copper Belt. This collaboration was initiated following Cobre’s successful involvement in the 2024 BHP Xplor program, which secured funding for recent seismic surveys in the Kitlanya West Project.
The Earn-In Agreement outlines critical funding provisions, including an initial commitment of US$5 million within two years and a total planned budget of US$7 million for exploration commencing in April 2025. BHP will assume operational responsibilities during the earn-in phase and is expected to provide a management fee to Cobre. Upon the joint venture’s establishment, BHP may offer Cobre a loan for its share of joint venture expenses until a final investment decision is made.
Additionally, Cobre is eligible for an extra payment of up to US$10 million contingent on the announcement of a maiden JORC Compliant Mineral Resource at the Kitlanya Projects. In the event of a termination during the Earn-In Phase where BHP has contributed at least US$20 million, BHP will acquire a 2% net smelter royalty on the Kitlanya Projects. Cobre retains the option to repurchase a portion of this royalty by covering BHP’s exploration expenditure.
Importantly, this transaction does not encompass Cobre’s flagship Ngami and Okavango Copper Projects. Cobre plans to further develop these independently while they continue to aim for discoveries within the Kitlanya Projects. The work program includes deep drilling and a 2D seismic survey to evaluate potential sites for copper deposit formation, with drilling activities scheduled to commence in April 2025.
Tim O’Connor, BHP Group Exploration Officer, expressed enthusiasm for the partnership, emphasizing the exploration potential in Botswana. Likewise, Cobre’s CEO Adam Wooldridge viewed the arrangement as a significant milestone affirming the efficacy of BHP’s Xplor program and enabling the implementation of a technology-enhanced exploration strategy. Cobre’s Chairman, Martin Holland, conveyed gratitude towards BHP and commended the dedication of Cobre’s team throughout the transaction’s development.
This Earn-In Agreement marks a pivotal moment for Cobre Limited, securing substantial investment for the exploration of the Kitlanya Projects in Botswana. BHP’s involvement is expected to enhance resource discovery potential while Cobre continues to independently advance its other projects. The anticipated exploration activities and funding represent an exciting opportunity for both companies in the growing copper market.
Original Source: investingnews.com
