Global mining giant BHP (ASX:BHP) has entered into an exploration agreement with Australian-listed Cobre Limited, committing up to $25 million (approximately A$40 million) to assess the copper and silver potential of Botswana’s Kalahari Copper Belt. The agreement, announced on Monday, marks a significant investment into the region’s resource sector, targeting Cobre’s Kitlanya East and Kitlanya West copper projects.

Cobre CEO Adam Wooldridge described the agreement as a major milestone for the company, highlighting the importance of securing financial and technical support from a leading global mining firm.

“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,” Wooldridge said.

Strategic Exploration Investment

Under the terms of the earn-in agreement, BHP will finance exploration activities over multiple years in exchange for a 75% stake in the Kitlanya projects. The funding structure includes an initial commitment of $5 million within the first two years, with exploration activities scheduled to begin in April 2025. The first phase of the program has been allocated a budget of $7 million, which will be directed towards key exploratory activities such as deep diamond drilling and seismic surveys.

This investment follows Cobre’s successful participation in BHP’s 2024 Xplor programme, which previously provided funding for a seismic survey at Kitlanya West. The new agreement builds upon that collaboration, expanding the scope of exploration efforts in search of large-scale, high-grade copper and silver deposits.

Geological Potential of the Kalahari Copper Belt

The Kitlanya East and Kitlanya West projects are located along the northern and southern basin margins of the Kalahari Copper Belt, a region known for its rich sediment-hosted copper-silver mineralization. The geological setting of the area, characterized by structural folds and fault systems, provides favorable conditions for the formation of large-scale deposits.

The exploration campaign will focus on evaluating these geological structures, particularly tight, upright folds and anticline hinge zones, which are considered prime targets for high-grade mineralization. If successful, the program could significantly enhance the understanding of the region’s resource potential and lead to the discovery of Tier 1 copper-silver deposits.

Path to Discovery and Future Development

Beyond the immediate exploration investment, the agreement also includes additional financial provisions tied to key project milestones. These include further payments linked to the declaration of a maiden Joint Ore Reserve Committee (JORC)-compliant mineral resource. Additionally, BHP could receive a net smelter royalty if the project advances to commercial production.

The exploration initiative is expected to contribute to the broader understanding of the Kalahari Copper Belt’s mineral potential, a region that has drawn increasing interest from international mining firms in recent years. If successful, the discoveries made under this partnership could pave the way for future mining development, bringing economic benefits to Botswana’s mining sector.

With exploration activities set to commence in April 2025, the industry will be watching closely to see whether BHP and Cobre’s investment yields significant discoveries in one of Africa’s most prospective copper belts.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.