St George Mining Ltd (ASX:SGQ) has raised $5 million through a strategic placement, enabling an upscaled drilling campaign at its 100%-owned Araxá Project in Brazil. The funding, secured at a 13.1% premium to the 30-day volume-weighted average price (VWAP), will support the rapid expansion of the company’s rare earths and niobium resource.
With the capital injection, St George plans to accelerate exploration and development efforts, bolstering the project’s potential to become a key player in the global rare earths supply chain. The placement involves the issuance of 131,578,948 new shares at A$0.038 each, which will be allocated to both existing and new strategic investors.
The additional funding will allow St George to mobilise three diamond drill rigs — two more than initially planned — at the Araxá site. The drilling program, set to begin within two weeks, will cover over at least 9,000 metres of diamond drilling, targeting new expansion zones while also upgrading existing resources from Inferred to Indicated status.
Expanding a world-class resource
The Araxá Project is home to a globally significant resource of rare earths and niobium, with a Mineral Resource Estimate (MRE) of 40.64 million tonnes at 4.13% Total Rare Earth Oxide (TREO). The resource remains open in all directions, and the newly scaled-up drilling program will test expansion targets along strike and at depth.
“We are delighted to secure additional funds at a premium to SGQ’s 30-day volume-weighted average price, ensuring that we are fully funded for an upscaled diamond drill program with minimum dilution to existing shareholders,” said executive chairman John Prineas.
“This successful placement is recognition of the world-class rare earths and niobium resource we have already confirmed for Araxá and the value-creating workstreams currently under way — including a major drill program to expand the resource, metallurgical test work to confirm processing flowsheets and development studies to fast-track permitting approvals.”
Attracting strategic partnerships
St George is also eyeing potential partnerships in the US to support rare earths processing and magnet production.
With demand for rare earths surging, especially in light of US government initiatives to secure non-China supply chains, the company sees strong opportunities for downstream partnerships. St George’s efforts align with the US Department of Defense’s investment in MP Materials and Apple’s significant backing of MP’s rare earths initiatives, it noted.
The private placement is aimed at furthering St George Mining’s strategy for the Araxá Project to meet the growing demand for rare earths, with its high-grade mineralisation starting from surface and its proximity to established mining infrastructure. As it progresses with its drilling program and development studies, St George aims to provide a reliable and independent source of rare earths to global markets.