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.
Kobrea will operate the opening phase, after which BHP may assume operatorship.
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BHP may designate up to four projects for separate earn-ins. For each project selected, it can earn a 75% interest by solely funding at least US$40 million over eight years, leaving Kobrea with 25% through a joint venture.
That creates a potential aggregate minimum of US$160 million if BHP exercises and completes all four earn-ins.
The alliance covers seven projects spanning more than 733 square kilometres, but Kobrea currently holds the right to acquire them rather than outright ownership. 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.
BHP’s upfront payment and funded exploration reduce Kobrea’s need to raise capital directly for project work. The trade-off is that successful projects selected for earn-in would ultimately be majority-controlled by BHP.
Exploration will be overseen by a committee containing representatives from both companies. Kobrea retains control during the initial project-generation stage, but BHP can take over operations after that period and secure majority ownership by completing the required spending.
