Mining giant BHP (ASX: BHP) has inked an agreement to form a joint venture with Australia-based copper explorer Cobre to search for Tier One copper-silver deposits in Botswana.
Tier One deposits are “company making assets”, as they are large, have a low cost and a long productive mine-life. In the copper sector, such assets usually have a reserve potential of more than 5 million tonnes of contained copper and cash costs per pound in the lower half of the industry cost curve.
The partnership follows Cobre’s successful participation in the BHP Xplor program, which also provided funding for a recently completed seismic survey on the Kitlanya West project. The earn-in deal also includes Cobre’s East Copper project. Both are located in the Kalahari Copper Belt of Botswana.
A JV with BHP would provide Cobre with extensive exploration expertise and scale, increasing the likelihood of significant discoveries along the exploration area.
Cobre would retain full ownership of its Ngami and Okavango Copper projects, which would not be part of the proposed transaction.
“Successful negotiation and completion of this significant transaction with BHP, one of the world’s leading mining companies, will be a major moment in time for Cobre as a company,” chief executive Adam Wooldridge said in the statement.
Since Henry assumed the top post at BHP in 2020, the company has been looking for significant copper assets. The quest has seen the miner make its largest acquisition in a decade with the buy of Oz Minerals, and making a failed $49 billion bid for smaller rival Anglo American (LON: AAL).
BHP recently joined forces with Canada’s Lundin Mining (TSX: LUN) to acquire South America-focused Filo Corp. (TSX: FIL). The deal hands both buyer key copper assets in Chile and Argentina.
