• St George Mining completes acquisition of potentially top-tier niobium-REE project in Brazil
  • Araxá is proven to host niobium-REE mineralisation next to the world’s largest niobium producer
  • $20m raised to fund drilling and mining development studies that have already begun

 

Special Report: St George Mining has leapt straight into mine development studies for its advanced, high-grade Araxá niobium and rare earth project in Brazil after wrapping up its acquisition.

Earlier this month, company shareholders had voted in favour of all motions relating to the acquisition of the project, which is adjacent to – and within the same Barreiro carbonatite complex as – CBMM’s flagship project that produces ~80% of the world’s niobium using conventional, low-cost processing.

This processing comprises wet grinding, magnetic-process separation and flotation to produce a concentrate of 60% Nb2O5 that is in turn used to produce final products such as ferroniobium, niobium oxide and pure metal niobium.

While this proximity to CBMM’s mine is certainly encouraging, St George Mining (ASX:SGQ) can also take heart in the proven presence of niobium and REE with historical drilling returning more than 500 intercepts of high-grade mineralisation starting from surface.

This drilling features grades of up to 8% Nb2O5, 33% total rare earth oxides and 32% phosphate with notable assays such as:

  • 43m grading 1.5% Nb2O5 from surface;
  • 20m at 2.4% Nb2O5 from surface including 10m at 3.2% Nb2O5 from 2m;
  • 60m at 11.1% TREO from surface including 30m at 16.9% TREO from 27.5m; and
  • 45m at 14.4% TREO from surface including 7.5m at 31.5% TREO from 40m.

Adding further interest, the mineralisation remains open in all directions with just 10% of the project area covered by close-spaced mining – highlighting the significant scale potential.

 

Landmark day

“Today is a landmark day for St George as we enter a new era. The high-grade niobium-REE Araxá project represents a tremendous opportunity for St George to potentially become a globally significant player in the niobium sector,” executive chairman John Prineas said.

“The project is positioned as a de-risked, world-class project with extensive high-grade niobium and REE mineralisation confirmed by historical drilling, a long history of commercial niobium production in the region, access to existing infrastructure and availability of an experienced workforce.

“We have assembled a first-rate, in-country management team – which counts decades of combined experience in niobium mining and mineral production at Araxá – to drive development work.

“We have also established a relationship with the state government to support expedited project approvals.

“And we have been working hard to build the foundations from which we can accelerate development of the Project and safely and sustainably unlock its world-class potential.”

Prineas also made note of the vendor of the Araxá project, welcoming Itafos Inc (TSX-V: IFOS), a global fertiliser company, “as a new and substantial shareholder of St George with a shareholding of 10%”.

To date, the company has paid Itafos US$6.97m in cash (with the balance of the first instalment of US$10m paid to the Brazilian tax authority on behalf of Itafos), 266.78 million shares, 86.1 million options exercisable at 4c within two years from the date of issue, and 11.1 million performance rights that convert into SGQ shares if it defines a JORC resource of at least 25Mt at 3.5% TREO within five years.

It is also required to make deferred cash payments of US$6m nine months after completion of the transaction and another US$5m in 18 months.

 

Charging ahead

SGQ has already signed a memorandum of understanding with its host state’s Invest Minas agency that offers fast-tracked approvals for the project.

A similar MoU with fellow ASX-listed play Latin Resources (ASX:LRS) had resulted in a preliminary licence being issued in just nine months rather than the typical 3-4 years.

Likewise, it has struck a deal with leading engineering firm Xinhai – a services provider to the mining industry – to negotiate and enter into a definitive strategic partnership agreement.

This will see Xinhai provide advice on various aspects of the project such as metallurgical testing, mineral processing options and plant design as well as provide a proposal for a fixed price engineering, procurement and construction contract.

SGQ has also reached an agreement with Brazilian science agencies EMBRAPII and SENAI to develop a new and sustainable process to maximise the recovery of niobium and REEs from the project in the mining state of Minas Gerais.

While 60% of the costs will be borne by the Brazilian agencies, the company will have the exclusive right to commercialise the intellectual property developed by the technical co-venture for 10 years with no royalty or other fee payable to the two agencies.

It also has a separate partnership with SENAI to collaborate on the production of rare earth magnets and has appointed Alger Consultoria e Assessoria Juridica to advise on socio-environmental and cultural heritage matters in connection with the licensing of proposed mining operations.

On the offtake front, the company has an MoU in place with major Chinese steelmaker Liaoning Fangda to consider commercial agreements that may include Fangda securing a minimum 20% of potential niobium products from Araxá as well as a similar arrangement with global trading house SKI Hong Kong.

 

Dollars for drilling and development studies

Funding for the company’s 2025 drilling and development studies at Araxá has also been locked in with the completion of a $20m capital raising that included a $8m investment from Xinhai.

This will fund a 5000m drill program in March, ongoing drilling for later this year and a maiden JORC resource estimate targeted for March 2025.

It will also fund metallurgical test work, the production of sample niobium and REE products for distribution to potential off-take parties, completion of environmental, heritage and geotechnical studies, and commencement of feasibility study work.

 

 

 

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.

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