Cobre Limited has secured an Earn-In Agreement with BHP Group for up to US$25 million to explore its Kitlanya Projects in Botswana, enabling BHP to earn a 75% interest. The deal includes a minimum funding commitment, management fees for Cobre, and potential for additional payments upon declaring mineral resources. This collaboration underscores confidence in discovering Tier 1 copper-silver deposits, with drilling scheduled to start in April 2025.
Cobre Limited (ASX: CBE) has entered into an Earn-In Agreement with BHP Group Ltd, under which BHP will invest up to US$25 million (approximately A$40 million) for exploring Cobre’s Kitlanya East and Kitlanya West Copper Projects in Botswana. In exchange, BHP can earn a 75% interest in these projects, situated on the Kalahari Copper Belt’s basin margins. This agreement stems from Cobre’s participation in the 2024 BHP Xplor program, which also financed a recent seismic survey on the Kitlanya West Project.
The key terms of the agreement include a minimum commitment of US$5 million within two years, with a planned budget of US$7 million for exploration starting in April 2025. Furthermore, BHP can earn its 75% interest by funding the total US$25 million for the project. Cobre Botswana will operate during this earn-in phase, collecting a management fee of no less than US$250,000 per annum.
An additional payment of up to US$10 million will be due to Cobre upon declaring a maiden JORC Compliant Mineral Resource at the Kitlanya Projects. If the Earn-In phase ends with BHP funding at least US$20 million, the company is entitled to a 2.0% net smelter royalty on the projects, with an option for Cobre to buy back 50% of this royalty.
The agreement does not extend to Cobre’s flagship Ngami and Okavango Copper Projects, which the company will continue to operate independently. Cobre expresses confidence in finding Tier 1 copper-silver deposits, affirming that BHP’s backing will enhance its exploration capabilities, while still retaining full ownership of its other projects.
The initial exploration plan involves deep diamond drilling and 2D seismic surveys aimed at understanding the geological systems necessary for Tier 1 deposit formation. Drilling is slated to commence in April 2025, targeting areas identified in the seismic program.
BHP’s Exploration Officer, Tim O’Connor, expressed enthusiasm for the potential of the Kitlanya Projects, emphasizing the partnership’s value in uncovering significant copper-silver deposits. Cobre’s CEO, Adam Wooldridge, highlighted the transaction as a major milestone for the company, ensuring that new technology-driven initiatives will be deployed throughout this exploration process, while continuing progress on other projects.
Cobre’s Chairman, Martin Holland, thanked BHP for their efforts and acknowledged the dedication of the Cobre team in successfully finalizing the agreement. The geological aspects of the Kalahari Copper Belt reveal that mineralization occurs at specific structural features, setting the stage for discovering major deposits. The upcoming exploration will specifically focus on testing buried anticline hinge zones and assessing the geological architecture essential for copper production.
Cobre Limited’s Earn-In Agreement with BHP signals a significant investment of up to US$25 million for exploring its Kitlanya Projects in Botswana. This partnership not only allows BHP to earn a 75% interest but also provides crucial funding to leverage Cobre’s exploration capabilities while maintaining ownership of other projects. The agreement reflects both companies’ commitment to exploring the potential of Tier 1 copper-silver deposits, with advanced exploration plans set to begin in April 2025.
Original Source: investingnews.com
