St George Mining secures $20m to fund Brazilian niobium and REE acquisition

SGQ secures $20m placement to fund Araxá niobium-REE project acquisition
The project is next to the world’s largest niobium mine in Brazil
St George plans to complete up to 5000m of diamond drilling in near term

Special Report: St George Mining has confirmed funding in the form of a $20m placement for its acquisition of the high-grade Araxá niobium-rare earth element (REE) project in Brazil.

The project is in Minas Gerais, Brazil, adjacent to and in the same carbonatite complex as the world’s largest niobium mine owned by CBMM, which produces around 80% of the world’s niobium.

There’s also a long history of commercial niobium production in the region, access to infrastructure and workforce, first-rate in-country management and government support for expedited project approvals.

Araxá is significantly de-risked, with extensive high-grade niobium and REE mineralisation from surface confirmed by drilling.

More than 500 intercepts of high-grade niobium (>1% Nb2O5) and rare earths with grades up to 8% Nb2O5 and 33% TREO have been reported, including:

43m at 1.5% Nb2O5 from surface;
20m at 2.4% Nb2O5 from surface including 10m at 2.4% Nb2O5 from 2m; and
33m @ 2.1% Nb2O5 from 4m.

It’s a world-leading niobium address and the company is keen to get cracking at the project, with firm commitments from investors for a placement at 2c per share to raise the $20m – subject to shareholder approval – to replace the proposed equity raising announced in August.

St George Mining (ASX:SGQ) and the seller have also extended the binding agreement signed back in August to 15 March 2025 to allow additional time to complete the acquisition.

Fast tracking approvals

Part of the project’s strength is in its location in an established mining district with potential to access infrastructure and labour – factors that are favourable for near-term development potential.

Plus, the company has signed a cooperation agreement with the State of Minas Gerais for acceleration of regulatory approvals for the project.

“St George has been very active in laying the platform to leverage the advanced status of the project,” SGQ executive chairman John Prineas said.

“[This includes] the signing of a cooperation agreement with the State of Minas Gerais to expedite project approvals, the signing of partnership agreements for potential downstream processing of the Araxá mineralisation, the appointment of industry leading environmental consultants and, of course, establishing our own high-quality, in-country team with more than 40 years’ combined experience in the niobium business.

“The successful capital raise recognises the de-risked nature of the Araxá project – with extensive high-grade niobium and rare earths mineralisation already confirmed by drilling – at a time when these critical metals are highly sought after globally by industry and governments alike.

“Work programs have already been planned for 2025 including drilling at Araxá that will start once we take ownership of the project.

“We look forward to finalising the acquisition of the project in Q1 2025 and advancing initiatives at Araxá to unlock the full potential value of this world-class asset.”

The key terms of the agreement have not changed – including the cash purchase price of US$10m and deferred payments of US$6m and US$5m nine and 18 months after closing respectively to acquire all the issued capital of Itafos Araxá Mineracao E Fertilizantes S.A (Itafos Araxá), which owns the project.

On completion of the acquisition, the company intends to undertake up to 5000m of diamond drilling, which, in conjunction with historical results, will be used to complete a resource estimate for 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.