BHP Group's (ASX:BHP) BHP Metals Exploration unit struck an agreement with Kobrea Exploration to jointly advance exploration across Kobrea's Western Malargüe copper projects in Argentina, according to a late Wednesday statement.
BHP Metals will make an advance one-time cash payment of $3 million to Kobrea at the launch of the deal and will fund a minimum of $5 million in exploration expenditures over an initial two-year project-generation program.
During the project generation phase, BHP Metals may designate up to four separate projects for advancement into individual earn-in phases. For each designated project, the company will have the option to earn a 75% interest by sole funding a minimum of $40 million in exploration expenditures over eight years.
Kobrea will be the operator during the two-year generation phase, after which BHP Metals may decide to assume operatorship.
Once the earn-in for a designated project is completed, the parties will establish a joint venture in which BHP Metals and Kobrea will hold stakes of 75% and 25%, respectively.