A wholly owned subsidiary of BHP has signed a $82m earn-in and joint venture (JV) agreement with Luminex Resources for the latter’s Tarqui 1 & 2 mining concessions in Ecuador.

Luminex and BHP have entered into a non-binding letter of intent (LoI) for the proposed agreement.

Under the agreement terms, BHP will have the right to earn up to a 70% ownership interest in Tarqui by investing an aggregate amount up to $75m in exploration and paying up to $7m in cash to Luminex.

Luminex will work exclusively with BHP to negotiate and complete a binding agreement for the partnership at the Tarqui project over the next three months.

Luminex Resources CEO Marshall Koval: “Luminex is excited to advance Tarqui with an organisation like BHP that has the opportunity and commitment to supplying future global copper demand and a strong focus on responsible development in Ecuador.

“Tarqui is an exciting copper prospect that BHP and Luminex will pursue over the coming years.”

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Under the LoI, BHP will have the right to earn a 51% interest on completion of $25m of exploration expenditures and $2.4m of cash payments to Luminex within the fourth year of the signing of the agreement.

“Tarqui is an exciting copper prospect that BHP and Luminex will pursue over the coming years.”

The company will also earn an additional 9% interest if it contriubutes $35m towards an exploration project and makes $7m of cash payments to Luminex within the sixth year of the signing of the agreement.

BHP will earn the final 10% after it invests $75m in exploration.

The company will have the right to assume management of the JV company and the exploration programme for Tarqui.

Entering into the JV agreement and completing the transactions are subject to customary conditions, approval by Luminex’s board of directors and receipt of all governmental and regulatory approvals.