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Following successful completion of a jointly designed validation program, BHP has exercised its option to enter a farm-in and joint venture agreement with Australia’s Encounter Resources covering the Elliott copper project in the Northern Territory.

The farm-in and JV deal follows last September’s option agreement between the companies, pursuant to which BHP may earn up to a 75% interest in the project by spending up to A$22 million ($17 million) over 10 years.

According to Encounter, the Elliott project represents a “compelling exploration opportunity” in the vastly underexplored Greater McArthur Superbasin that contains the key ingredients for the formation of large sedimentary copper deposits.

“Copper sourced from sedimentary-hosted deposits is one of the fastest growing sources of high-grade copper in the world. Encounter controls an extensive first-mover portfolio of copper projects in the Greater McArthur Superbasin in the NT,” Encounter managing director Will Robinson said in a statement on Friday.

“The potential for this region to host large sedimentary-hosted copper deposits is rapidly emerging, and we are delighted to be teaming up with BHP to apply leading edge technologies in the search for Tier 1 copper deposits at Elliott,” Robinson added.

Elliott was the first project secured by Encounter in the NT and comprises seven tenements covering more than 4,500 km².

The property is located at a major structural intersection on the southwestern margin of the Beetaloo Basin, which is part of the Greater McArthur Superbasin that hosts the giant sediment-hosted base metal deposit at McArthur River.

The upcoming exploration program at Elliott will be focused on the deployment of leading-edge technologies, initially applying the expertise and knowledge developed during oil and gas exploration of similar basins.