BHP Group will invest up to $25 million in Cobre to develop the Kitlanya East and West Copper Projects in Botswana. These projects lie along the Kalahari Copper Belt, one of the world’s most promising mining regions, marking a significant BHP investment in the region.
Key Details of the Partnership
Under the earn-in agreement, BHP can acquire a 75% stake in the Kitlanya projects. These projects are located on the northern and southern edges of the Kalahari Copper Belt. This collaboration follows Cobre’s success in the 2024 BHP Xplor programme, which funded a seismic survey at Kitlanya West.
BHP Group’s exploration officer, Tim O’Connor, expressed excitement about the partnership. He stated, “This collaboration highlights the exploration potential in Botswana. The Kitlanya Projects present an excellent opportunity to uncover Tier 1 copper-silver deposits. We are eager to contribute our expertise and resources to this venture.”
Investment and Exploration Plans
BHP will initially invest $5 million over the next two years. Exploration will begin in April 2025, with a planned budget of $7 million for the first phase. Cobre Botswana will manage the project during the earn-in phase. They will receive an annual management fee of at least $250,000.
Once a 75:25 joint venture is established, BHP may help cover Cobre’s share of costs until a final investment decision is made. Cobre may also receive up to $10 million once a maiden JORC Compliant Mineral Resource is announced at Kitlanya.
Contingent Payments and Future Royalties
If the partnership ends during the earn-in phase and BHP has allocated at least $20 million, BHP will receive a 2% net smelter royalty on the Kitlanya projects’ output. Under specific conditions, Cobre can buy back half of this royalty.
The agreement does not include Cobre’s Ngami and Okavango Copper Projects. These will continue under Cobre’s independent management, allowing the company to retain full ownership.
Cobre’s Technology-Driven Exploration Programme
Cobre CEO Adam Wooldridge praised the partnership with BHP. He noted, “This deal marks a major milestone for Cobre. It’s a testament to the success of BHP’s Xplor programme. The funding and support will allow us to implement a technology-driven programme to discover Tier 1 deposits.”
The work programme will include deep diamond drilling and 2D seismic surveys to assess key factors for copper deposit formation. Drilling is scheduled for next month and will target areas identified in the 2024 seismic assessments at Kitlanya West.
Conclusion
The BHP-Cobre partnership is a major step forward in copper exploration in Botswana. BHP’s initial $5 million investment and a $7 million exploration budget will enhance Cobre’s ability to develop the Kitlanya East and West Copper Projects. This collaboration has the potential to uncover significant copper-silver deposits in one of the world’s most promising mining regions.
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