BHP is betting big on this explorer’s NT copper aspirations
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Shares in copper explorer Encounter Resources (ASX: ENR) hit the accelerator this morning on news BHP (ASX: BHP) would start a $22 million farm-in to its Elliott copper project in the Northern Territory.
The ASX-listed explorer was up 22.2 per cent, or 3 cents, to 16.5 cents at 11.30am AEST, with more than 1.5 million shares changing hands.
It has claimed ‘first-mover’ status on sedimentary hosted copper in the NT, drawing the world’s biggest miner in via an option agreement on the 4500km2 Elliott in September last year.
BHP has now exercised that option, giving it the right to earn up to 75 per cent of Elliott over the next 10 years by spending $22m on exploration.
Encounter managing director Will Robinson pointed to sedimentary-hosted deposits as “one of the fastest growing sources of high grade copper in the world.”
“Encounter controls an extensive first mover portfolio of copper projects in the Greater McArthur Superbasin in the NT,” he said.
“The potential for this region to host large sedimentary-hosted copper deposits is rapidly emerging and we are delighted to be teaming up with BHP to apply leading edge technologies in the search for Tier 1 copper deposits at Elliott.
“The outcomes of the jointly designed validation program at Elliott have been illuminating and bolstered the potential for the discovery of large sedimentary-hosted copper deposits under shallow cover in the NT.”
On top of Elliott, Encounter boasts another 17,000 km2 of tenements around the Greater McArthur Superbasin, which plays host to Glencore’s giant sediment hosted McArthur River base metals mine.
Branded in some quarters as ‘the new oil’, identifying new sources of copper has emerged as a major growth priority for the world’s biggest miners due to its expected role in the green energy transition.
It hit record levels this month and is trading above $US10,000/t, doubling in value in the past year.
There are no operating copper mines in the Northern Territory, despite historic production of almost 2 million tonnes.
The most advanced player is $280 million-capped KGL Resources (ASX: KGL), which owns the high grade Jervois project for which it received mining approvals from the Territory Government in January.
A host of other juniors and majors hold exploration tenure in the region, including Tennant Creek focused Emmerson Resources (ASX: ERM) and WA gold explorer Middle Island Resources (ASX: MDI), among others.