BHP has signed an agreement to increase its stake in SolGold, which is the majority owner and operator of the Cascabel porphyry copper-gold project in Ecuador, through the acquisition of additional shares.

Under the agreement, BHP will purchase 100 million shares in SolGold at a price of 45 pence per share for a total consideration of £45m ($59.12m) to increase its interest in the company to 11.2%.

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The move follows the company’s decision to buy Guyana Goldfields’ (GGI) 6.1% stake in SolGold for $35.2m in September.

BHP Minerals Americas president Danny Malchuk said: “Ecuador is a highly prospective region for the next generation of copper supply. This additional investment strengthens our strategic position in the Cascabel copper exploration project, and is consistent with BHP’s strategy to replenish our copper resource base and grow the business.”

The share subscription deal, which is set to be completed on 19 October, gives BHP the right to nominate one director to the SolGold board.

In addition, BHP has anti-dilution rights for a period of two years, which will allow it to maintain its shareholding at 10%.

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The additional stake will take the company’s shareholding closer to Newcrest Mining’s 14.5% interest in SolGold.

“This additional investment strengthens our strategic position in the Cascabel copper exploration project.”

The proceeds from the transaction will be used towards further expanding the Alpala resource, as well completion of the preliminary economic analysis and pre-feasibility studies. Alpala deposit is the main target within the Cascabel concession.

SolGold CEO Nick Mather said: “We believe that the Alpala project is one of the five best undeveloped copper projects in the world.”

The company expects to complete pre-feasibility studies for the project by the end of next year.