BHP Group signed a nonbinding letter of intent to acquire up to a 70% stake in Luminex Resources Corp.'s Tarqui 1 and 2 copper mining concessions in Ecuador.
Luminex said March 19 that BHP will pay up to US$7 million in cash and invest as much as US$75 million in the early-stage property in three stages. The companies are targeting a binding deal within three months.
BHP can earn an initial 51% interest by spending US$25 million on exploration and paying US$2.4 million in cash by the fourth anniversary of the agreement.
It can increase its interest by 9% by spending US$35 million on exploration and paying US$7 million in cash on a cumulative basis by the sixth anniversary of the deal.
The company can then earn a further 10% interest by spending a cumulative US$75 million on exploration.
BHP will manage the joint venture company and related exploration efforts and will also have the right to accelerate its earn-in.
Luminex expects its deals with BHP, First Quantum Minerals Ltd. and Anglo American PLC to provide up to US$178 million in funding, including US$157 million in exploration costs.
First Quantum is earning up to a 70% interest in Luminex's Orquideas and Cascas copper-gold concessions under a 2017 agreement. Anglo American is earning up to a 70% interest in three mineral concessions known as Pegasus A, Pegasus B and Luz under a 2018 agreement.