St George Mining Ltd has taken steps to forge a strategic partnership with Shandong Xinhai Mining Technology & Equipment Inc (Xinhai), a global service provider to the mining sector, to advance development of the advanced, high-grade Araxá Niobium-REE Project in Minas Gerais, Brazil.
The two companies have signed a binding Memorandum of Understanding (MoU) that provides a framework for collaboration and includes an A$8 million equity investment and engineering, procurement and construction (EPC) deal.
Pathway to development
This groundbreaking engineering and construction services deal underpins the pathway for Araxá Project development plans.
St George Mining’s executive chairman John Prineas said: “We are delighted to be partnering with Xinhai, a truly global mining services provider focused on providing clients with integrated construction and operation solutions for modern, efficient and energy saving mines.
“Xinhai has an impressive track record of delivering high-quality processing plants in expedited timeframes and with competitive pricing.”
EPC contract
Components of the MoU with Xinhai, which has performed work at more than 2,000 mines in more than 100 countries, includes an EPC contract in which Xinhai will:
- provide advice on metallurgical testing, mineral processing options, plant design and project construction;
- provide a proposal for a fixed-price EPC (engineering, procurement and construction) contract for the development of the Araxá Project; and
- assist St George to arrange optimal, non-dilutive funding for the EPC contract.
A$8 million investment
The MoU also includes a commitment from Xinhai to invest a total of A$8 million in the A$20 million equity fundraising being completed by St George in support of the Araxá Project acquisition.
“Xinhai’s global depth of expertise across the entire spectrum of mine development disciplines – metallurgy, mineral processing, plant engineering, equipment manufacture, plant construction and mine operation management – ensures that it can design and deliver optimal project solutions,” Prineas said.
“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.
“St George’s ability to attract industry-leading partners like Xinhai reflects the near-term development potential of the Araxá Project and the favourable mining jurisdiction of Minas Gerais which offers potential for expedited permitting approvals.
“Led by our experienced in-country management, St George is establishing a highly credentialled team to drive project delivery.”
De-risks Araxá project
The engagement of Xinhai further boosts St George’s in-country project delivery team dedicated to the fast-tracked development of the advanced, world-class Araxá Project. It also further de-risks the project.
Under the terms of the binding MoU, St George and Xinhai will use their best efforts to negotiate and enter into a definitive Strategic Partnership Agreement within nine months of the date of execution of the MoU, February 11, 2025.
MoU terms
The MoU has been signed by HongKong Xinhai Mining Services Limited, wholly owned by Shandong Xinhai Mining Technology & Equipment Inc, on behalf of the Xinhai Group. It has the following key terms:
- Xinhai will have a first and last right of refusal for an EPCM+O contract for the Araxá Project;
- The EPCM+O contract will be based on the project development strategy agreed by St George and Xinhai; and
- St George and Xinhai will form a project committee to supervise and advise on metallurgical testing, mineral processing options, plant design and project assessment leading up to the issue of an EPC contract.
Xinhai is a leading global process engineering and contracting company that specialises in providing engineering design, procurement and construction services to the mining industry.
It has completed more than 500 EPC contracts globally, many including mine construction and mine operation management services.