Sinomine’s A$7m Option Could Shift Ownership of Cobre’s Okavango Project

Strategic Partnership in Botswana’s Copper Belt

Cobre Limited (ASX, CBE) has announced a significant investment agreement with Sinomine International Exploration, a major Chinese resource group. The deal involves Sinomine injecting up to A$3 million into Cobre through share subscriptions, alongside an option to acquire a 70% interest in Cobre’s Okavango Copper Project (OCP) in Botswana for A$7 million. This partnership marks a pivotal step in advancing exploration activities within one of the world’s most prospective sedimentary copper belts.

Funding the Next Phase of Exploration

The initial A$1.5 million investment will fund targeted diamond drilling and other exploration activities designed to test extensions of mineralisation identified in Cobre’s 2024 drilling campaign. Sinomine holds an option to invest an additional A$1.5 million, maintaining the same share price, to support further drilling following the initial phase. These funds will enable Cobre to aggressively pursue high-value targets along strike from established deposits operated by MMG, a significant player in the region.

Joint Venture Structure and Future Commitments

Upon completion of Phase 1 exploration and subject to positive assay results, Sinomine may exercise its option to acquire a 70% stake in the project by purchasing shares in a newly incorporated Botswana entity holding the project assets. The resulting joint venture will see Sinomine fund up to A$20 million in expenditures through an interest-bearing loan to the joint venture company, convertible into equity upon a positive pre-feasibility study. This arrangement not only provides Cobre with substantial financial backing but also aligns incentives for both parties to advance the project efficiently.

Geological Promise in the Kalahari Copper Belt

The Okavango Project covers over 1,300 square kilometers of highly prospective stratigraphy within the Kalahari Copper Belt, adjacent to MMG’s Zone 5 production hub. The region’s copper-silver mineralisation is structurally controlled and occurs along key redox contacts in sedimentary formations. The project’s strategic location and geological setting underpin the optimism surrounding the potential for significant new discoveries, which could elevate the project’s value substantially.

Implications for Cobre and Shareholders

CEO Adam Wooldridge highlighted that this transaction not only provides the capital necessary to complete a strategic drilling program but also offers shareholders exposure to potential discoveries with a relatively modest exploration spend. Maintaining a 30% carried interest through to the pre-feasibility study stage means Cobre shareholders retain meaningful upside while benefiting from Sinomine’s financial and operational support.