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Key terms of the agreement include Mundoro retaining a 2% Net Smelter Return (NSR) royalty upon exercise, escalating annual option payments starting at US$323,000, and milestone payments potentially totaling up to US$10,000,000. Mundoro will initially operate the project and receive operator fees, allowing the company to maintain a degree of control and benefit from its deep local knowledge. The aggregated cost for BHP to fully exercise the option is estimated at approximately US$48.54 million. The project encompasses around 418 km2 and includes advanced exploration targets such as Skorusa and Tilva Rosh.
Positive
US$35.0M committed to exploration over 10 years
Mundoro retains a 2% NSR royalty upon exercise
Project covers 418 km2 in Timok magmatic complex
Cumulative spend to date on project: C$15.4M
Negative
Total aggregated cost to exercise ~US$48.54M (dilutive timeline risk)
BHP may replace Mundoro as operator after US$20.0M spend or 40,000m drilling
Potential royalty buyback could halve Mundoro royalty to 1%
10/13/2025 – 01:00 PM
Mundoro Capital Inc. (TSXV: MUN, OTCQB: MUNMF) has announced a definitive option agreement with a subsidiary of BHP Group Limited, granting BHP the opportunity to earn 100% of seven of Mundoro’s exploration licenses within the Central Timok Project, located in the Timok Magmatic Complex in Serbia. This agreement represents a significant endorsement of the Timok region’s potential for copper porphyry systems and a strategic partnership for both companies.
Highlights:
* BHP can earn 100% ownership over 10 years by funding US$35,000,000 (C$48,877,500) in exploration expenditures.
* Mundoro retains a 2% NSR royalty upon exercise.
* BHP commits to escalating annual option payments, starting at US$323,000 (C$451,070).
* Mundoro will operate the project initially and earn annual operator fees.
“We are pleased to expand our strategic partnership with BHP, a world leader in the resources industry,” stated Teo Dechev, CEO of Mundoro. “This collaboration focuses on exploring additional exploration licenses in the highly prospective Timok region of eastern Serbia for copper porphyry systems. It combines Mundoro’s local and operational expertise with BHP’s global geoscience team and porphyry exploration specialization, leveraging the strengths of each company to systematically explore this mineral district.”
Agreement Terms
The agreement grants BHP an option to earn a 100% interest in the BHP-Mundoro Central Timok Project over a 10-year Option Period. To exercise the option, BHP must:
* Fund cumulative exploration expenditures up to US$35,000,000 (C$48,877,500) according to the following schedule:
| Anniversary | Cumulative Exploration Expenditures |
|————-|—————————————|
| 2nd | US$2,500,000 |
| 4th | US$7,000,000 |
| 6th | US$14,500,000 |
| 8th | US$27,000,000 |
| 10th | US$35,000,000 |
* Make annual option payments starting at US$323,000 (C$451,070), increasing by 2% per year.
* Make milestone payments of US$2,000,000 (C$2,793,000) each when certain resource estimates are declared, up to a total of US$10,000,000 (C$13,965,000), or US$10,000,000 (C$13,965,000) upon exercise of the option if no resource is declared.
Additional Terms:
* Operating Fees: Mundoro is the initial operator, responsible for overall project operations and will receive operating fees. BHP may replace Mundoro as operator if it has funded at least US$20,000,000 in exploration expenditures, or if at least 40,000 meters of cumulative drilling has been completed. This provision allows BHP to assume control of the project as exploration advances and its investment increases.
* Advanced Royalty Payments: Upon exercise of the option, BHP will begin making annual advanced royalty payments to Mundoro, equal to the dollar amount of the last option payment, increasing by 2% per year.
* Royalty: Upon exercise, Mundoro will retain a 2% Net Smelter Return Royalty. BHP has the right to purchase 50% of the Royalty before production commencement, with the buy-back price based on a specific copper tonnage multiplied by the one-year average copper price on the London Metal Exchange. This provides BHP with a potential avenue to further consolidate its economic interest in the project.
The aggregated sum of exploration expenditures, milestone payments, and option payments to exercise the option is approximately US$48,536,759 (C$67,781,511) if BHP completes the earn-in over the Option Period. This substantial investment underscores BHP’s commitment to the project’s potential.
Property Overview
The BHP-Mundoro Central Timok Project encompasses approximately 418 square kilometers within the Timok Magmatic Complex in Serbia, a highly prospective metallogenic domain. Timok hosts several significant deposits and major producing mines, including the Cukaru-Peki Deposit, the Malka Golaja Copper-Gold Deposit, and the Bor copper porphyry mine. This established mining district provides valuable infrastructure and geological context for the BHP-Mundoro project.
(A total of C$15.4 million has been invested in the Project by Mundoro and previous partners. Extensive work has been completed across the licenses in the Project area, including comprehensive geophysical surveys (AMT, IP, and Ground Magnetics), systematic geochemical surveys (stream sampling, soil sampling, rock sampling, and trenching), and targeted diamond drilling campaigns.)
The Project contains numerous exploration targets including the advanced targets of the Skorusa Porphyry System, a defined 2 km x 3 km copper-gold porphyry system where drilling confirmed mineralization with an intercept of 201.2 meters at 0.11% Cu and 0.11 g/t Au; and the Tilva Rosh Prospect, which features a large 16 km² lithocap structure with a high-grade epithermal target at Tilva Rosh South where trenching returned 12 meters at 30.39 g/t Au and 171.27 g/t Ag.
Additional prospective targets include Markov Kamen, Orlovo, D-vein, Prekostenski, Zlot 1-3, Bukova, Tilva Mare, Glavica, Bacevica North, Gorunov, Oblez SE and Branik. These targets exhibit geological features, mineralization styles, and alteration patterns characteristic of porphyry and related high-sulphidation epithermal systems.
Strategic Implications
This agreement highlights the growing interest in the Timok region as a key area for copper exploration and development. BHP’s involvement brings significant financial resources and technical expertise to accelerate the exploration and potential development of the Central Timok Project. For Mundoro, this partnership allows the company to advance its projects without significant capital outlay, while retaining a valuable royalty interest. The initial operator role also allows Mundoro to capitalize on its expertise in the area.
Qualified Persons
The scientific and technical information contained in this news release was reviewed and approved by R. Jemielita, PhD, MIMMM, a Qualified Person as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and Chief Geologist to the Company.
About Mundoro Capital Inc.
Mundoro is a publicly listed company on the TSX-V in Canada and OTCQB in the USA with a portfolio of mineral properties focused primarily on base and precious metals. To drive value for shareholders, Mundoro’s asset portfolio generates near-term cash payments to Mundoro and creates royalties attached to each mineral property optioned to partners. The portfolio of mineral properties is currently focused on predominantly copper in two mineral districts: Western Tethyan Belt in Eastern Europe and the Laramide Belt in the southwest USA.
What are the key financial terms of the BHP option for MUNMF announced October 13, 2025?
BHP can earn 100% by funding US$35,000,000 in exploration, paying escalating annual option fees starting at US$323,000, and milestone payments up to US$10,000,000.
How much royalty will Mundoro keep if BHP exercises the option on MUNMF’s Central Timok project?
Mundoro will retain a 2% NSR royalty on exercise, with BHP having the right to buy 50% of the royalty under a formula.
What is the aggregated cost to BHP to fully earn the Central Timok Project (MUNMF)?
The press release states an aggregated sum of approximately US$48,536,759 to complete the earn-in over the option period.
Which advanced targets are included in the BHP-Mundoro Central Timok Project (MUNMF)?
Advanced targets include the Skorusa porphyry (201.2m at 0.11% Cu, 0.11 g/t Au intercept) and the Tilva Rosh lithocap with high-grade trench results.
Will Mundoro operate the Central Timok project after the BHP option agreement for MUNMF?
Mundoro is the initial operator and will receive operating fees; BHP may replace Mundoro as operator after funding US$20,000,000 or completing 40,000m drilling.
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