Araxá’s niobium shine draws global metal trader into MoU with St George Mining

• St George Mining signs MoU with SKI Hong Kong for collaboration on the development of Araxá niobium-REE project
• SKI will also consider offtaking at least 20% of the niobium products the project might produce
• The leading speciality steel materials trader may provide funding through an investment and/or prepayment for offtake

Special Report: St George Mining has signed a non-binding memorandum of understanding with global trading house SKI Hong Kong to support the development of its Araxá niobium-REE project in Brazil.

The MoU establishes the framework for collaboration on marketing, offtake and financing aspects of the project with the goal of progressing feasibility studies for a mine development.

St George Mining (ASX:SGQ) and SKI will also negotiate and consider potentially entering into a range of commercial transactions and offtake opportunities relating to Araxá’s niobium content.

SKI – one of the world’s leading traders in specialty steel materials and ferro alloys with a focus on niobium, manganese and chrome products – may secure at least 20% of the project’s potential niobium products, provide funding support through an investment in the company and/or pre-payment for offtake, and secure marketing rights for niobium products.

Araxá sits within a well-established mining district of Minas Gerais, Brazil’s leading State for mining. The project has access to infrastructure and labour, and has already seen the discovery of extensive high-grade niobium and REE mineralisation.

This is highlighted by historical drilling returning >500 intercepts of +1% niobium with ultra-high grades of up to 8% niobium and 33% total rare earth oxides.

Mineralisation starts at surface and is open in all directions, providing plenty of room for expansion given that less than 10% of Araxá has been effectively drilled and drilling beyond 50m from surface has been limited.

Immediately adjacent to St George’s Araxa landholding is the niobium project of CBMM, the world’s largest producer of niobium.

A long-term partnership

“We are delighted to have executed the MoU with SKI, which we believe can be the start of a productive and successful, long-term relationship,” SGQ executive chairman John Prineas said.

“SKI’s decision to partner with St George highlights the longer-term strategic significance of the Araxá project as a potential globally significant supplier of niobium products.

“SKI is an impressive strategic partner for St George, based on its substantial trading track record in steel materials and its particular industry leading expertise in niobium products.

“SKI’s objective is to secure a long-term reliable supply of high-quality niobium products against the market background of fast-growing global demand for niobium as well as geo-political issues that may restrict access to this highly rated critical metal.

“The MoU provides a framework for collaboration on technical and financial matters to advance development of the project. The support of SKI is a major milestone in de-risking the project by further enabling opportunities to expedite development.”

Partnership negotiations

Under the MoU, both parties will consider and negotiate a potential binding partnership agreement within nine months of its signing.

During this period, SQG and SKI will consult closely on key project development parameters including product mix and global marketing arrangements.

As part of this, the company will seek to use the pilot plant at the project to produce sample niobium products in H1 2025 that are in line with specifications to be agreed with SKI.

The MoU allows SGQ to pursue additional partnerships with other strategic investors and does not prevent the company from entering into any other transaction involving the project.

This article was developed in collaboration with St George Mining, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.