St George Mining Ltd (ASX:SGQ, FRA:S0G, OTC:SGQMF) earlier this week said it had delivered its thickest mineralised intercept to date at the 100%-owned Araxá Rare Earths and Niobium Project in Minas Gerais, Brazil, as executive chairman John Prineas outlined the company’s development pathway in an interview with Proactive.
Prineas said St George Mining Ltd (ASX:SGQ, OTC:SGQMF) had raised A$60 million to top up its cash reserves and accelerate development workstreams at the rare earths and niobium project. Hancock Prospecting contributed A$20 million to the placement, increasing its stake in the company from 6% to 10%.
Prineas said Hancock’s increased investment was “quite a strong validation” of St George Mining Ltd (ASX:SGQ, OTC:SGQMF)’s potential, noting Hancock’s position as a shareholder in MP Materials and Lynas, which he described as the two biggest rare earths producers outside China.
The company’s latest drill result from the main deposit included 199.5 metres of high-grade mineralisation continuous from surface. Prineas said the result was St George Mining Ltd’s biggest intercept to date at the deposit and highlighted the significance of the mineralisation beginning at surface.
“That is a real point of difference for our deposit,” Prineas said. “The mineralisation starts from surface. It is not 50 metres underground. It is not 100 metres underground.”
Prineas said the result provided a strong platform for development studies, with mineralisation continuing down to 200 metres so far and showing consistency across the deposit.
St George Mining Ltd has also appointed Worley as feasibility technical manager, with Prineas saying the company was now pivoting toward accelerated workstreams. He said initial metallurgical test results had been strong, with the company producing an industry-standard niobium concentrate and upgrading rare earths to 15.7% TREO as part of the process.
Near-term catalysts include further drilling updates, final metallurgical test results and a scoping study expected over the next six months. Prineas also said St George Mining Ltd was targeting a potential final investment decision within 12 to 18 months.
On development requirements, Prineas said the project benefited from being in an established mining region with existing infrastructure. He said the company did not need to build major supporting infrastructure such as power plants, roads or railways, and that the main task ahead was working through Brazil’s permitting process.
He said the company would need to secure a preliminary licence, an installation licence and, after plant construction, an operating licence before production could begin.
Interview highlights
- St George Mining raised A$60 million to strengthen its cash position and accelerate development workstreams at the Araxá Rare Earths and Niobium Project in Minas Gerais, Brazil.
- Hancock Prospecting contributed A$20 million to the placement, increasing its stake in St George from 6% to 10%.
- Prineas said Hancock’s further investment was “quite a strong validation” of St George’s potential.
- The company reported its thickest mineralised intercept to date at the main deposit, with 199.5 metres of high-grade mineralisation continuous from surface.
- Prineas highlighted the near-surface nature of the mineralisation as “a real point of difference” for the project.
- St George has appointed Worley as feasibility technical manager and is moving into development studies.
- The company has published initial metallurgical test results, including production of an industry-standard niobium concentrate and rare earths upgraded to 15.7% TREO.
- Expected news flow over the next six months includes a scoping study and final metallurgical test results.
- Prineas said a final investment decision could potentially be reached within 12 to 18 months.
- The company will work through Brazil’s permitting process, including preliminary, installation and operating licences.
Proactive: Welcome back to Proactive Investors. I’m your host, Kerry Stevenson, and I’ve asked John Prineas, executive chairman of St George Mining Ltd, ASX code SGQ, to join us. The company has the Araxá Rare Earths and Niobium Project in Minas Gerais, Brazil. Since I last spoke to John, St George Mining Ltd has raised A$60 million from strong institutional investors, including its largest shareholder Hancock Prospecting, which took a placement of A$20 million. That was 200 million shares issued at A$0.10. John is also going to talk to us about the company’s latest results, so there is a lot to discuss today. John, welcome back, and congratulations on the steps you are taking to create shareholder value with the project in Brazil.
John Prineas: Thank you, Kerry. It’s nice to be back. It’s good to see some recognition for all the hard work we are doing.
Proactive: You are doing some hard work. As I said, St George Mining Ltd raised A$60 million, with Hancock Prospecting taking A$20 million of that. Can you explain the placement and what the funds will be used for?
John Prineas: We went out to raise about A$60 million to top up our cash reserves so we can accelerate all the workstreams for development. We know that we have a world-class resource. It is getting bigger, but we now really want to step-change and get on the development pathway, so that money will help us accelerate some of those workstreams.
We are very happy that Hancock Prospecting came in for another large contribution. Hancock has increased its stake in St George Mining Ltd from 6% to 10%, so it is quite a strong validation of what our potential could be. Everyone knows Hancock is a big shareholder in MP Materials and Lynas, the two biggest producers of rare earths outside China, so hopefully Hancock thinks we have that kind of potential as well and is following its money by contributing more to us.
It was a very good capital raise. A number of other high-quality institutions came in on that raise, so we have good sticky money and are positioned well now to accelerate development.
Proactive: For me, it validates that this is a large project in the right jurisdiction in Minas Gerais, Brazil. You mentioned accelerating towards development. I would like a timeline around that and also potentially a final investment decision.
John Prineas: We are still drilling. We have nearly finished our drilling program at the main deposit. Today we announced some fantastic results. It was our biggest intercept to date at that main deposit: 199.5 metres of high-grade mineralisation, continuous from surface.
That is a real point of difference for our deposit. The mineralisation starts from surface. It is not 50 metres underground or 100 metres underground. It starts from surface and continues down to 200 metres so far. It is very consistent, high-grade, extensive mineralisation across the whole deposit, and it is a great platform now to start our development studies.
We appointed Worley as feasibility technical manager in May, so we are really now pivoting to getting these workstreams accelerated. We have already published our first round of metallurgical test results, which were very strong. The company produced industry-standard niobium concentrate and also upgraded the rare earths as part of that process to 15.7% TREO.
All of that is continuing. Investors will see a lot more news flow in the next six months in terms of a scoping study, final metallurgical test results and, hopefully, a final investment decision within the next 12 to 18 months.
Proactive: A final investment decision in 12 to 18 months. What is the biggest challenge right now? St George Mining Ltd has the money and is getting the drill results. What do you see as the biggest challenge, and what is the market potentially not recognising?
John Prineas: It is a big project. It has the potential to be as big as the other main producers in rare earths in the world, so it is one of significant scale.
Having said that, the logistics are really easy. Again, the mineralisation starts from surface. We are in an established mining region, so we do not have to create our own infrastructure. We do not have to spend billions of dollars building power plants, roads and railways. It is already there.
That is not the challenge. We just have to go through the routine permitting process, and that takes time. We have to get our preliminary licence, which could take another six months. We then have to get our installation licence, which could take another six months. Then we construct the plant, which could be another 12-month period, and then we get our operating licence and we are ready to go.
There are no real challenges. It is just going through those motions now, which we are very confident we can satisfy.
Proactive: There you have it. Investors may want to start taking notice of St George Mining Ltd. The company continues to get the work done, the drill results are strong, and it has the funding. There is plenty of news to come. John, I am sure you will be back to give us an update in the near future. Thanks so much for joining me today on Proactive Investors.
John Prineas: Thank you very much. Cheers.