Newcrest Mining has reached an agreement to increase its shareholding in Australian gold and copper mining company SolGold.

SolGold owns the Cascabel porphyry copper-gold deposit in northwest Ecuador.

Through its Newcrest International subsidiary, the company will purchase 27.87 million ordinary shares of SolGold at a price of £0.40 per share.

Newcrest will acquire the shares for a total consideration of £11.14m ($14.03m), taking its total holding to 283.46 million shares.

The acquisition will raise Newcrest’s interest in SolGold from 13.83% to 15.33%.

It comes amid increasing demand for copper. BHP owns an 11.2% stake in SolGold and focuses on copper exploration to boost its portfolio.

UBS analyst Daniel Morgan was quoted by Reuters as saying: “Clearly, Newcrest is maintaining its interest in SolGold and its potential as a Tier 1 orebody.

“Both BHP and Newcrest see a lot of potential in the orebody. Newcrest did say at their strategy day that they are not averse to looking at or developing mines in joint ventures.”

In September, BHP agreed to buy Guyana Goldfields’ 6.1% stake in SolGold for $35.2m. The company reached an agreement in the following month to increase its interest to 11.2%.

“Newcrest is maintaining its interest in SolGold and its potential as a Tier 1 orebody.”

The move led to speculation of a potential takeover battle between BHP and Newcrest.

Under the agreement in October, BHP agreed not to buy additional shares in SolGold for a period of two years without SolGold’s consent.

Last week, Newcrest and its partner Harmony Gold Mining signed an agreement with the Papua New Guinea Government to expedite approval for a mining lease for Wafi Golpu copper-gold project in the country by the end of next June.

After EMR Capital failed to meet financing conditions, BHP called off the $320m sale of its Cerro Colorado copper mine in northern Chile.