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Gaborone, Botswana: Global mining giant BHP has made a significant move in Botswana’s burgeoning copper sector, inking a $25m (A$39.6m) earn-in agreement with Cobre Limited to explore the promising Kitlanya East and Kitlanya West copper-silver projects. This investment marks a major vote of confidence in the Kalahari Copper Belt’s potential to yield world-class deposits.
The agreement, born from Cobre’s successful participation in BHP’s Xplor programme, will see BHP initially commit a minimum of $5m over two years, with a planned exploration budget of $7m commencing in April 2025. This will fund deep diamond drilling and 2D seismic surveys, aimed at unlocking the geological secrets of the Kitlanya projects.
“This significant transaction with BHP is a major moment in time for Cobre,” declared Cobre CEO Adam Wooldridge. “The partnership with BHP will provide us with the funding and support necessary to discover the Tier 1 deposits we believe may be hosted in our Kitlanya East and West projects.”
BHP’s interest in the Kitlanya projects stems from their strategic location on the Kalahari Copper Belt’s basin margins, an area ripe for discovery. By investing the full $25m, including the initial $5m, BHP will have the option to acquire a 75% stake in the projects.
“We are thrilled to continue our partnership with one of the BHP Xplor alumni, Cobre Limited,” said Tim O’Connor, BHP Group Exploration Officer. “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.”
Cobre Botswana will remain the operator during the earn-in phase, receiving an annual management fee. Notably, the agreement excludes Cobre’s Ngami and Okavango copper projects, which the company will continue to develop independently.
The potential for a 75:25 joint venture (JV) between BHP and Cobre opens up further possibilities. BHP may offer Cobre a loan for its share of JV expenses until a final investment decision is reached. Furthermore, Cobre stands to gain an additional $10m if a JORC-compliant mineral resource is declared at the Kitlanya Projects.
Should the agreement terminate during the earn-in phase, with BHP having invested at least $20m, the mining giant will secure a 2% net smelter royalty on the Kitlanya Projects, a provision that Cobre can partially buy back under certain conditions.
This strategic partnership underscores the growing interest in Botswana’s copper sector, with BHP’s investment serving as a testament to the region’s potential to become a significant player in the global copper market.
