BHP awakens from slumber on Australian farm-in deals with Encounter copper tie-up
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BHP has struck its first farm-in deal in Australia after a lengthy period of time, entering into an option agreement with Encounter Resources for its Elliott copper project in the Northern Territory.
“We are delighted to be teaming up with BHP in the search for tier-one copper deposits at Elliott,” said Encounter in a statement.
The low-key announcement was seen as significant by investors and market watchers alike, who said it had been quite a while since BHP had paired up with a junior ASX exploration company.
They said it may signal that BHP was about to start a more active phase of exploration joint ventures in Australia, possibly targeting battery type metals such as copper and nickel used in EVs.
Market watchers pointed to the appointment of BHP’s chief of geoscience and asset president for the company’s Olympic Dam asset, Laura Tyler, to the new role of chief technical officer, September 1.
“Ms Tyler will be tasked with securing options in future-facing commodities through exploration, and for improving safety, sustainability, reliability and productivity,” BHP said in a statement.
BHP was contacted for comment, but had yet to respond at the time of publishing.
Elliott comprises seven tenements over 4,500sqkm and the Stuart highway runs along the western edge of the project zone.
The project area is at a major structural intersection on the southwestern margin of the Beetaloo basin targeting sedimentary hosted copper.
The option agreement with Encounter provides BHP with the right to enter an earn-in and joint venture agreement for Elliott after a jointly designed and funded validation program.
On the program’s completion, BHP has the right to earn up to a 75 per cent interest in Elliott through a staged earn-in by providing up to $22m of exploration spending within 10 years.
BHP has the right to become the manager of the Elliott project for which a 75:25 joint venture will be formed, although Encounter’s interest can be converted into a smelter royalty if its share dips below 10 per cent.
Encounter said it had moved early to secure opportunities in the Northern Territory, after new data had put a spotlight on potential copper discoveries under shallow cover there.
The new datasets were put together by Geoscience Australia as part of the government’s Exploring for the Future Program in the relatively underexplored Northern Territory.
The company meanwhile will complete data validation for its Jessica, Brunchilly, Carrara, Playford and Sandover projects that are also in the Northern Territory.
Encounter has existing partnerships with IGO (ASX:IGO) and Newcrest Mining (ASX:NCM) for its Paterson province copper-cobalt project, and Tanami and West Arunta gold project, both in WA, respectively.
Antipa’s Citadel joint venture with Rio is just 45km from its Winu copper-gold prospect in WA’s Paterson goldfield.
Rio Tinto has also teamed up with Canterbury Resources (ASX:CBY) for its Bismark copper-gold discovery in Papua New Guinea’s Manus Island.