BHP Billiton Limited (ASX:BHP) just grabbed a slice of a highly coveted mining company

The BHP Billiton Limited (ASX:BHP) share price has drifted lower despite grabbing a slice of the highly coveted mining company, SolGold.

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In morning trade the BHP Billiton Limited (ASX: BHP) share price has drifted lower despite announcing the acquisition of a stake in a highly coveted copper and gold operation.

At the time of writing the mining giant's shares are down almost 1% to $32.83.

What has happened?

This morning BHP announced that it has entered into an agreement with Guyana Goldfields Inc. to acquire its 6.1% interest in SolGold Plc, the majority owner and operator of the Cascabel porphyry copper-gold project in Ecuador.

This isn't the first time that BHP has been interested in acquiring a stake in London-listed SolGold. In 2016 BHP made a conditional, non-binding offer to acquire a 10% stake in SolGold for US$30 million. But SolGold's management rebuffed the proposal and later accepted a bid from gold mining giant Newcrest Mining Limited (ASX: NCM).

BHP may regret not increasing its bid for the stake. The 6.1% stake it has agreed to buy today will come at a cost of £27.4 million (US$35.2 million).

Why are miners interested in SolGold?

The main attraction to SolGold is its Cascabel porphyry copper-gold project in Ecuador which has been compared to the world class Oyu Tolgoi copper mine in Mongolia owned by Rio Tinto Limited (ASX: RIO).

BHP chief executive officer, Andrew Mackenzie, stated that the investment in SolGold would give the company exposure to a high-quality copper exploration project in Ecuador, which is a highly prospective location for BHP.

He said that: "Consistent with our positive long-term outlook, copper is a key exploration focus for BHP as we seek to replenish our resource base and grow this important business."

Should you invest?

While the purchase of this small stake isn't necessarily a game-changer at this stage, I wouldn't be surprised if BHP has its eyes on acquiring the whole of SolGold in the future. If the Cascabel porphyry copper-gold project lives up to the hype, that could be a smart way for the miner to invest a portion of its mountain of cash.

In light of this, I feel BHP remains a good investment option, just as long as a trade war doesn't hurt global economic growth and demand for commodities.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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