Luminex, BHP Seal Deal on Tarqui Copper Concessions

A subsidiary of major miner BHP (ASX:BHP,LSE:BHP,NYSE:BHP) has signed a binding earn-in and joint-venture (JV) agreement with Luminex Resources (TSXV:LR,OTC Pink:LUMIF) regarding the latter’s Tarqui and Tarqui 2 mining concessions in Ecuador.

The move comes after the two companies signed a non-binding letter of intent in March, with many of the agreement terms remaining the same. Should BHP invest US$25 million in exploration fees and pay Luminex US$2.4 million in cash over a four-year period, the company can earn a 51 percent stake in the JV company.

The company can earn an additional 9 percent in the JV by funding US$10 million in costs at the property and paying Luminex an extra US$4.6 million over a subsequent two-year period. Lastly, BHP can boost its ownership to 70 percent by paying for US$40 million of expenditures at the copper asset.

If BHP opts to take the necessary steps to 70 percent ownership, Luminex will retain a 30 percent stake in Tarqui and will fund 30 percent of any costs necessary for exploration, development or construction. As it currently stands, BHP will act as the JV company’s manager and operator with exploration work currently underway.

“Luminex is excited to advance Tarqui with an organization like BHP that has the opportunity and commitment to supplying future global copper demand and a strong focus on responsible development in Ecuador,” Luminex CEO Marshall Koval said in a previous statement.

As of July 12, copper was trading at US$5,949.5 per tonne on the London Metal Exchange.

BHP’s stock price inched ahead 0.073 percent on the ASX to close Monday (July 15) at AU$41 per share. Meanwhile, Luminex’s stock price remained unchanged from Friday’s (July 12) close of C$0.72 per share.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.