ASX-listed Cobre Limited (Cobre) has executed an earn-in agreement with BHP, under which the latter Australian multinational mining and metals company will provide $25mn for exploration at the former's copper-silver projects in Botswana.

Cobre is a pure-play copper explorer across two Tier-1 mining jurisdictions, Australia and Botswana. In a release on March 10, the company said through the spend, BHP will earn a 75% interest in Cobre's Kitlanya East and Kitlanya West copper projects (Kitlanya) in the southern African nation's high-potential Kalahari Copper Belt.

BHP commits to providing a minimum of $5mn within two years of the commencement date with a planned budget of $7m for exploration expenditure for Kitlanya starting in April 2025.

Cobre Botswana will be appointed operator during the earn-in phase and will be entitled to a management fee of at least $250,000 per year.

"Upon commencement of the 75:25 joint venture, BHP may provide a loan to Cobre to fund Cobre's portion of joint venture expenditure up until the final investment decision," said the statement.

"An additional payment of up to $10mn, calculated at $5/tonne contained copper, is payable to Cobre upon the declaration of a maiden JORC Compliant Mineral Resource (JORC) at the Kitlanya Projects."

The planned work programme for the initial $7mn includes several diamond holes combined with active 2D seismic survey designed to assess key components of the mineral system required for Tier 1 copper deposit formation. 

Adam Wooldridge, Cobre’s CEO, said the "significant" transaction is a “major moment” and a testament to the success of BHP’s Xplor programme, under which the mining giant supports early-state, high-potential exploration projects globally.

"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.

Tim O’Connor, BHP Group Exploration Officer said the collaboration reflects the exploration potential in Botswana and the success of the BHP Xplor programme.

"The Kitlanya Projects in Botswana represent an exciting opportunity to uncover Tier 1 copper-silver deposits, and we are pleased to contribute our expertise and resources to this venture,” he said.