BHP Group has committed up to $25m in partnership with Cobre for the development of the Kitlanya East and West Copper Projects, located along the Kalahari Copper Belt in Botswana.
This earn-in agreement permits BHP to secure a 75% stake in the projects, which are positioned on the belt’s northern and southern margins.
The collaboration emerged from Cobre’s recent success in the 2024 BHP Xplor programme, which also funded a seismic survey at Kitlanya West.
BHP Group exploration officer Tim O’Connor said: “This collaboration reflects our excitement for the exploration potential in Botswana and underscores the high standard of partnerships we see coming out of the BHP Xplor programme. The Kitlanya Projects in Botswana represent an exciting opportunity to uncover Tier 1 copper-silver deposits, and we are pleased to contribute our expertise and resources to this venture.”
Under the agreement, BHP will initially invest $5m within two years, with exploration activities commencing in April 2025, supported by a planned budget of $7m.
Cobre Botswana will act as the project operator throughout the earn-in phase, receiving an annual management fee of no less than $250,000. Once a 75:25 joint venture framework is established, BHP might extend financial assistance to cover Cobre’s portion of joint venture costs until a final investment decision is reached.
An additional contingent payment of up to $10m is set for Cobre upon announcing a maiden JORC Compliant Mineral Resource at the Kitlanya sites.
If the partnership ends during the earn-in phase and BHP has allocated at least $20m towards exploration, the mining major will receive a 2% net smelter royalty on outputs from Kitlanya projects. Cobre retains the option to buy back half of this royalty under specific conditions.
The agreement does not encompass Cobre’s Ngami and Okavango Copper Projects, which will continue under Cobre’s independent management. This partnership with BHP is anticipated to enhance exploration efforts with financial support and expertise while allowing Cobre to maintain full ownership of its key copper projects.
Cobre CEO Adam Wooldridge said: “This significant transaction with BHP, one of the world’s leading mining companies, is a major moment in time for Cobre as a company as well as a testament to the success of BHP’s Xplor programme.
“The partnership with BHP will provide us with the funding and support necessary to implement a technology-driven work programme designed to discover the Tier 1 deposits we believe may be hosted in our Kitlanya East and West Projects.”
The initial work programme involves deep diamond drilling and active 2D seismic surveys designed to evaluate essential components for Tier 1 copper deposit formation. Drilling is scheduled for next month, targeting areas identified by the 2024 seismic assessments at Kitlanya West.
