Cobre (ASX:CBE) has signed an investment agreement with Sinomine International Exploration (SZSE:002738), enabling the latter to purchase a 70% interest in the Okavango Project in the Kalahari Copper Belt of Botswana for a total consideration of $7 million.
Under the funding terms, Sinomine will pay an initial fee of $1.5 million in exchange for Cobre shares valued at $0.06 per share, funding phase one exploration activities including initial drilling.
Sinomine will also be offered to invest an additional $1.5 million through subscriptions for further exploration and additional drilling, as well as the option to acquire 70% interest in the project by acquiring shares in Cobre’s entity NewCo.
Minmetals Capital Holdings wholly owned subsidiary Minmetals Securities acted as the financial advisor for this agreement.
Technical and operational work programs and budgets will be developed by both companies for Cobre to streamline phase one of exploration.
Sinomine will also provide NewCo with an interest-bearing loan to fund its joint venture expenditure ahead of the return of a Prefeasibility Study.
Both Sinomine and Cobre will be granted the opportunity to convert the remaining portions of the outstanding loans into NewCo shares after reaching a “positive” Prefeasibility Study.
Cobre CEO Adam Wooldridge says this agreement will provide shareholders with exposure to new potential discoveries in the Kalahari Copper Belt.
“This significant transaction with Sinomine provides Cobre with the capital to complete its strategic target drill program on the OCP Project with the potential to sell a stake in the project at a multiple of exploration spend while maintaining a 30% carry to the Prefeasibility Study,” Wooldridge says.
Initial exploration includes a targeted diamond drilling campaign across the Okavango Project to follow up on mineralisation uncovered in a 2024 program and test extensions.
Cobre is an explorer and developer focused on unearthing copper discoveries in the Kalahari Copper Belt in Botswana.
Write to Maddison Elliott at Mining.com.au
Images: Cobre
