Mining major BHP has committed to investing up to A$40-million for the exploration of potential Tier 1 copper/silver deposits in Botswana, in partnership with Australia-listed Cobre. 

The agreement, announced on Monday, outlines an exploration funding package aimed at advancing Cobre's Kitlanya East and Kitlanya West copper projects, located along the northern and southern basin margins of the Kalahari Copper Belt.

Under the terms of the earn-in agreement, BHP will provide up to $25-million (about A$40-million) in exploration expenditure, with the goal of earning a 75% interest in the two Kitlanya projects. The funding will be provided over a multiyear period, with an initial commitment of $5-million to be paid within two years of the deal’s commencement. Exploration activities are set to begin in April 2025, with a planned budget of $7-million for the first phase.

The agreement follows Cobre’s successful participation in BHP's 2024 Xplor programme, which also funded a recent seismic survey at the Kitlanya West project. BHP will fund key exploration activities, including deep diamond drilling and advanced seismic surveys, to evaluate the potential for large-scale copper/silver deposits in the region. The programme will focus on geological structures within the Kalahari Copper Belt, which is known for hosting high-grade mineralisation along its basin margins.

Tim O’Connor, BHP Group's exploration officer, said the collaboration reflected the group's excitement for the exploration potential in Botswana. "We are thrilled to continue our partnership with one of the BHP Xplor alumni, Cobre Limited, through this agreement," he added.

Cobre CEO Adam Wooldridge said the agreement marked a major milestone for the company. "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," he said. 

Wooldridge also pointed out that Cobre would continue to independently advance its flagship Ngami and Okavango copper projects.

The Kitlanya projects are located in an area with significant exploration potential owing to the unique geological features of the Kalahari Copper Basin. The region is known for sediment-hosted copper/silver mineralisation, often associated with structural folds and fault systems that create ideal conditions for large-scale deposit formation. The upcoming exploration programme will focus on testing these geological structures, including tight, upright folds and anticline hinge zones, which are considered prime targets for high-grade mineralisation.

Cobre remains optimistic that the exploration work funded by BHP will unlock the full potential of the Kitlanya projects, paving the way for future development and discovery. In addition to the exploration funding, the agreement includes provisions for further payments tied to the declaration of a maiden Joint Ore Reserve Committee-compliant mineral resource and a potential net smelter royalty for BHP if the project reaches certain milestones.