Mining conglomerate BHP will have a farm-in agreement and joint venture (JV) with Encounter Resources over the Elliot copper project in Northern Territory, Australia.
BHP exercised the option following the closure of their validation program that began in September last year.
The JV calls for a farm-in at the Elliot mine in phases where BHP will earn up to a 75pc interest by sole funding of up to A$22mn within 10 years. Upon BHP completing the earn-in agreement it will form a 75:25 joint venture with Encounter with investments equivalent to their stake in the mine. During the farm-in phase, BHP may take lead in the project.
Both companies will continue to explore the Elliot mine in phases including surveys and drilling programs.
Encounter will also focus its resources on its remaining copper projects where it has 100pc ownership, it noted in a statement on Friday.