$8m investment fast-tracks St George Brazilian rare earths project

St George Mining has secured the backing of leading global mining engineering firm Shandong Xinhai Mining to fast-track the development of its high-grade Araxá niobium-rare earths project in Brazil. 

The company has formed a major strategic partnership with the engineering and construction services giant through an agreement which includes an engineering, procurement and construction (EPC) contract over Araxá and an $8 million investment by Xinhai into St George.

The $8m investment will contribute to St George’s $20m equity raising, supporting the completion of the 100 per cent acquisition of Araxá.

The companies’ collaboration marks a substantial milestone for St George in de-risking its flagship project and accelerating its now clear pathway to production.

Under the binding memorandum of understanding, Xinhai will provide St George with comprehensive mine development expertise, including metallurgical testing and mineral processing optimisation, plant design and construction, project development and non-dilutive funding procurement.

Xinhai has successfully delivered more than 500 EPC contracts in more than 100 countries. The company’s confidence in St George will see it retain exclusive distribution and marketing rights for 80 per cent of Araxá’s niobium supply in China.

The investment further aligns Xinhai’s interests with its own long-term success, ensuring both parties are committed to fast-tracking the project’s development.

St George Mining executive chairman John Prineas said: “Xinhai has an impressive track record of delivering high-quality processing plants in expedited timeframes and with competitive pricing. We also welcome Xinhai as a new shareholder in St George, which will further align our respective interests in advancing the Araxá project to a successful operating mine.”

Prineas said he could not overstate St George’s ability to attract industry-leading partners such as Xinhai and that the deal reflected Araxá’s potential to be the next leading rare earths producer out of Brazil.

The Araxá project, in the Brazilian State of Minas Gerais, lies in the renowned Barreiro carbonatite complex. The complex contains a world-class rare earths orebody that is operated by neighbour Companhia Brasileira de Metalurgia e Mineracao _ the world’s biggest producer of niobium.

St George’s project has niobium grades up to a staggering 8 per cent niobium oxide and total rare earth oxide grades up to 33pc. St George says it is an obvious candidate to be Brazil’s next rare earths developer owing to its low-cost, open pittable mineralisation and the possibility of expedited permitting approvals in the mining-friendly jurisdiction.

The company’s project has extensive near-surface niobium mineralisation already confirmed from historical drilling, including more than 500 intercepts of more than 1pc niobium. 

Niobium is registered on the critical mineral lists worldwide and is essential for producing high-strength steel. It is crucial in constructing infrastructure, bridges and vehicles, and renewable technologies such as lithium-ion batteries. 

With Xinhai now on board, St George is rapidly advancing towards finalising its acquisition of Araxá, expected by the end of this quarter. The partnership checks a major box in the project’s funding and provides a clear pathway to construction and production, which looked to be an uphill battle for the emerging developer towards the back half of 2024. 

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