Under the deal, BHP will pay SolGold 45 million pounds for 100 million new shares in the company at a 28 percent premium to the stock's last close, taking its total spend on the developer to $85 million.

The move drove SolGold's London-listed shares almost 30 percent higher at one point. At 1100 GMT, the stock was up 17 percent, with BHP's shares down 1.3 percent.

BHP, which bought into SolGold just six weeks ago, has increased its holding to 11.2 percent, nearing the 14.5 percent stake held by Newcrest, Australia's biggest listed gold miner.

Under the latest deal, which analysts said was a big vote of confidence in the quality of SolGold's assets, BHP has the right to appoint a director.

For a two-year period, it agreed it cannot acquire a further stake in SolGold above a threshold of 246,634,271 shares, which would take it to around 13.5 percent, without SolGold consent.

"This additional investment in SolGold strengthens our strategic position in the Cascabel copper exploration project," BHP President Minerals Americas Danny Malchuk said in a statement.

Newcrest declined to comment.

SolGold's CEO Nick Mather said in a statement BHP's investment was welcome and would help the company take "an aggressive path to the development of this exciting project".

"The strong premium paid and the $59.2 million in funds raised means we can get on with the task of getting to feasibility," he said.

SolGold rejected an offer by BHP to take a 10 percent stake in the company in October 2016 for $30 million. At the time, BHP also offered to spend a further $275 million for up to 70 percent of Cascabel, an offer SolGold rejected because it did not want to lose control.

In common with other miners that have recovered from the price crash of 2015-16, BHP is seeking to expand its copper portfolio.

The highly conductive metal is in demand for use in renewable energy and electric vehicles, but new deposits are rare and increasingly difficult to recover.

BHP says it prefers to build its own projects to maximise profitability, rather than to expand through acquisitions, but buying a small stake in an early-stage project gives it a chance to influence development.

Analyst Paul Gait of Bernstein said the Cascabel project would suit BHP's business model perfectly.

"It's a copper porphyry (a large formation where copper can be accompanied by gold) suited to bulk mining in a safe-ish location," he said.

While BHP has deeper pockets, Newcrest has technical skills, known as block-caving, linked to large-scale bulk underground mining.

Block-caving involves hollowing out an ore body and allowing it to collapse under its own weight.

It has a smaller environmental footprint than open pit mining. Newcrest is one of a handful of miners that has block-cave experience.

(Reporting by Melanie Burton; Additional reporting by Devika Syamnath in Bengaluru; Editing by Richard Pullin, Keith Weir and Mark Potter)

By Melanie Burton and Barbara Lewis