Cobre (ASX:CBE) signed an earn-in agreement with a wholly-owned unit of BHP Group (ASX:BHP) for its Kitlanya East and Kitlanya West copper projects in Botswana, according to a Monday filing with the Australian bourse.
Under the agreement, BHP will fund up to $25 million for exploration costs for a right to earn a 75% interest in the projects, the filing said. The deal includes an initial commitment of $5 million within two years, with exploration set to start in April.
The copper and base metals explorer will remain the operator during the earn-in phase, receiving an annual management fee of no less than $250,000 and could receive up to $10 million upon declaring a maiden Joint Ore Reserves Committee-compliant resource at Kitlanya, per the filing.
Upon forming a joint venture, BHP may also provide a loan to fund Cobre's share of joint venture expenditures. If the transaction is terminated after BHP funds at least $20 million, BHP will receive a 2% net smelter royalty.
Cobre may buy back 50% of the royalty for the amount BHP has spent on exploration, the filing said.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.