• First Australian farm-in deal for BHP with an ASX explorer for some time
  • BHP new chief technical officer tasked with ‘securing options in future-facing commodities’
  • Encounter Resources’ stock leaps 31 per cent on BHP deal news

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.

Shares in Encounter Resources (ASX:ENR) soared 31 per cent in Thursday trade to 19c after details of the deal with BHP (ASX:BHP) hit the ASX boards.

“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.

ASX share price for Encounter Resources


BHP can earn up to 75 per cent interest in Elliott copper project

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.

The Elliott copper project is the focus for BHP’s deal with Encounter Resources

Encounter’s Elliott copper project covers 4,500 square km in the Northern Territory. Source: Encounter

Geoscience Australia’s datasets shine spotlight on potential discoveries

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.

Rio Tinto and Newcrest Mining have been active in junior exploration space

Other majors like Rio Tinto (ASX:RIO) and Newcrest have been active in the junior exploration space.

Rio Tinto has an exploration tie-up with Antipa Minerals (ASX:AZY), as does Newcrest Mining, and another with Sipa Resources (ASX:SRI) for its Paterson North copper-gold project in WA.

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.

ASX share prices for Antipa Minerals and Canterbury Resources