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BHP Backs Kobrea’s Argentina Copper Portfolio In Earn-In Agreement Up To $160M
['Er Velasco']
the deep dive
Kobrea Exploration has secured an initial US$8 million package from BHP without issuing equity, but the agreement gives the mining major a route to own 75% of as many as four copper projects in Argentina.
BHP Metals Exploration will pay Kobrea US$3 million upfront and fund at least US$5 million of exploration during an initial two-year program covering Kobrea’s Western Malargüe portfolio in Mendoza province.
That creates a potential aggregate minimum of US$160 million if BHP exercises and completes all four earn-ins.
Its 2024 option agreement requires aggregate payments of US$6.76 million in cash and 3.5 million Kobrea shares over five years, while the original owners retain a 1.5% net smelter return royalty.
The trade-off is that successful projects selected for earn-in would ultimately be majority-controlled by BHP.