80% of the global niobium supply is controlled by one company CBMM. Niobium sits as the second highest risk metal on the critical materials list for both the EU and the US for supply concentration.
$0.130
Opened: 06-Aug-2024
Shares Held at Open: 24,900,000
What does SGQ do?
St George Mining (ASX: SGQ) is a Brazilian niobium & rare earths developer in the state of Minas Gerais.
What is the macro theme?
80% of the global supply for niobium is controlled by one company and one mine in Brazil.
This commodity is considered the second highest commodity for both the US and the EU in terms of supply chain risk.
Although the market for niobium is still relatively niche, it may grow as metal of the future in things like ultrafast charging batteries.
Rare earths are also considered critical minerals with production and processing capacity concentrated in China.
Our Big Bet for SGQ
“SGQ defines a niobium/rare earths deposit large enough to take into development or attract corporate interest via a takeover at a market cap of >$500M”
NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is a lot of work to be done, many risks involved - just some of which we list in our SGQ Investment Memo. Success will require a significant amount of luck. There is no guarantee that our Big Bet will ever come true
Why did we invest in SGQ?
Niobium is a critical mineral. Governments want it, SGQ has it.
80% of the global niobium supply is controlled by one company CBMM. Niobium sits as the second highest risk metal on the critical materials list for both the EU and the US for supply concentration.
SGQ is capped at $55M post acquisition, much smaller than listed peers.
Post acquisition SGQ will be capped at A$55M (at 2.5c/share). Peers that have made niobium discoveries include WA1 Resources ($842M) and Encounter Resources ($249M). SGQ can also be compared to peers that have defined Rare Earth Element projects including Brazilian Rare Earths ($550M) and Meteoric Resources ($210M).
Existing discovery with 500 intercepts above 1% niobium.
Compared to other companies that are in the exploration stage, SGQ already has a niobium discovery. This provides a strong foundation for SGQ to quickly progress towards a JORC resource through more drilling of its own.
Money flowing into companies developing niobium projects.
Because of the importance of niobium, and its concentrated supply chain, large swathes of capital is pouring into other companies that are developing niobium projects. WA1 and Encounter Resources are two of the most successful stories on the ASX, both discovering niobium in WA.
Project sits next door to the largest niobium producer in the world.
SGQ is next door to CBMM, which supplies 80% of the global niobium market. SGQ’s project sits on the same geology as CBMM.
Only 10% of the project has been drilled (exploration upside).
To date, only 10% of SGQ’s project has been drilled with most of the drilling only down to ~50m depths. The high-grade mineralisation commences at surface and is open in all directions, leaving open the possibility for this discovery to grow even bigger.
Rare earths, with high grade TREO.
SGQ’s project also contains ultra high grade rare earths with TREO grades >10% in 10-60m intercepts. SGQ’s project sits on the same type of geology (carbonatites) as Lynas’ giant Mount Weld rare earths mine.
Project located in the same state in Brazil as Latin Resources.
The project is located in the Minas Gerais state of Brazil, a state that we have visited and home to one of our best ever Investments, Latin Resources. Latin Resources grew from $0.03 to over $0.40 off the back of a giant lithium discovery. The region is very mining friendly with good access to infrastructure and power.
Project acquired from a forced seller.
The vendor of the asset (Itafos) is a TSX listed phosphate producer and is currently going through a de-leveraging process trying to reduce debt. SGQ is picking up an asset that Itafos likely sees as non-core because of the business’ phosphate focus and a lack of bandwidth to bring another mine into production.
What do we expect SGQ to deliver?
Objective #1: Acquisition completion
We want to see SGQ satisfy the conditions for the acquisition and complete the deal.
Milestones
Shareholder approvals
Upfront cash payment completed
Deferred consideration #1 Paid
Deferred consideration #2 Paid
Objective #2: Drilling to increase size of discovery
We want to see SGQ drill out its existing discovery at depth and in all directions to increase the footprint of the deposit.
Milestones
Drilling permits granted
Land access agreements
Drilling commenced
Drilling results
Objective #3: Maiden JORC resource estimate & met testwork
We want to see SGQ define a maiden JORC resource for its project. As part of the resource estimate we also want to see SGQ run some metallurgical testwork and confirm its project sits on similar geology to CBMM’s project next door AND that it can be processed using similar processing techniques.
Milestones
Metwork updates
Maiden JORC resource estimate
Objective #4: Enter feasibility studies
We want to see SGQ take its project into economic studies either via a scoping study, Preliminary Economic Assessment (PEA) or a Pre Feasibility Study (PFS).
Milestones
Scoping study/preliminary economic assessment commenced
Scoping study/preliminary economic assessment completed
What could go wrong?
Exploration risk
A big part of our Investment is in seeing SGQ extend mineralisation at its project at depth and along strike.
There is no guarantee that drilling will return anything of significant commercial value for SGQ (either through weak grades or thin intercepts).
There is also some risk associated with metwork for later stage projects like SGQ’s - SGQ will be focusing on understanding the metwork over the coming months in parallel to drilling.
Commodity price risk
The niobium market is very small, which means that there can be big swings in commodity prices based on supply out of CBMM (who controls 80% of the market).
There are also a number of substitute commodities to niobium such as tantalum and vanadium.
If the price of niobium accelerates, then buyers may look for substitutes, pushing the price of the commodity down.
Deal Risk
The acquisition by SGQ is still subject to a certain number of conditions being met.
SGQ will need to get shareholder approvals for the deal - and there is a chance the vendor will need to get approvals for the transaction also.
SGQ expects the conditions of the deal to be satisfied by late September/early October 2024 but there is always a risk that these do not happen. If the deal falls through then our Investment Thesis wouldnt be applicable anymore.
Deferred payments risk
To pay for the acquisition SGQ will need to make three separate payments totaling US$21M. The first US$10M instalment is due on closing of the deal with the remainder due over the next 18 months.
IF SGQ is unable to raise funds to pay for the deferred milestone payments then it risks losing the asset. It is possible that SGQ fails to make these payments in which case we would expect the company’s share price to be re-rated significantly lower.
Market risk
Broader market sentiment could deteriorate, and shares as an investment class trade lower, taking SGQ’s share price with it. Alternatively, there could be further sector specific pain ahead where junior explorers suffer a lot more than the broader market.
Development/delay risk
Should any or all of the above risks materialise, SGQ could wind up stuck in “development purgatory” where newsflow dries up and the project remains stagnant for a prolonged period of time, hurting the share price. Additionally, if delays occur in terms of material newsflow, the market could turn on SGQ.
What is our investment plan?
We are Invested in SGQ to see it progress its project into development.
Our plan is to hold the majority of our position in SGQ for 3 to 5 years which we hope is enough time to see SGQ to move towards development (see “our long term bet” above).
After 12 months we will apply our standard de-risking strategy.
We may also look to sell up to 20% of our holding if the company delivers on one or more of our Investment Memo objectives and/or the share price materially re-rates.
Any sell downs will be in accordance with our trading and hold policy disclosure.
Disclosure: Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 24,900,000 SGQ shares at the time of publishing this Investment Memo. The Company has been engaged by SGQ to share our commentary on the progress of our Investment in SGQ over time. Some shares are subject to shareholder approval.
SGQ: Rare earth and niobium in Brazil - USA deal to secure control over Brazil rare earth production.
Apr 2, 2026
Apr 2, 2026 |
12 min
Two minerals that keep coming up in every US-Brazil discussion: Rare earths and niobium. Our Investment St George Mining (ASX: SGQ) has both rare earths and niobium in the same asset. The big news this week - SGQ signed two strategic alliances to process its rare earths and niobium with companies in the US and EU.
SGQ: New upgraded resource: 75% bigger at 70.91Mt @ 4.06% TREO (and 0.62% niobium) - with drilling ongoing…
Mar 3, 2026
Mar 3, 2026 |
11 min
The largest and highest-grade carbonatite-hosted rare earths deposit in South America. The highest grade undeveloped rare earths asset in the Western world. And it just got 75% bigger… Today our Investment St George Mining (ASX: SGQ) significantly increased the size of its rare earths-niobium project in Brazil.
SGQ: Giant rare earths deposit in the USA’s “neighborhood” - how about these drill results…
Jan 19, 2026
Jan 19, 2026 |
11 min
This morning our Brazil rare earths & niobium Investment St George Mining (ASX: SGQ) hit more high grade rare earths mineralisation. Up to 99.1m at 5.62% rare earth grades, all from surface
SGQ: 87.7m high grade rare earths drill hit - 150m step out from existing JORC resource. Gina Rinehart invests $22.5M.
Oct 23, 2025
Oct 23, 2025 |
12 min
St George Mining (ASX: SGQ) already has the largest and highest-grade carbonatite-hosted rare earths resource in South America - in Brazil. It’s the second-highest grade rare earths resource in the Western world. (it also has a big niobium resource, which we think the market is not pricing in while rare earths take all the attention)
SGQ signs strategic rare earths alliance with US defence industry magnet maker
Sep 10, 2025
Sep 10, 2025 |
12 min
It’s happening. The USA is banning its domestic defence contractors from using Chinese-sourced rare earth magnets and metals in any weapons system. The US has set a date for when rare earth import bans come into effect - 31 December 2026
SGQ - record hit from South America's largest, highest grade hard rock rare earth project
Apr 7, 2026
Apr 7, 2026 |
4 min
St George Mining (ASX: SGQ) has hit its biggest intercept yet from its rare earth and niobium project in Brazil - 178.7m at 4.34% TREO and 0.75% niobium from surface. A new record from what is already South America's largest, highest-grade carbonatite-hosted rare earth deposit.
SGQ partners with Boston Metal to trial next-generation niobium processing
Apr 1, 2026
Apr 1, 2026 |
3 min
Our rare earths and niobium Investment St George Mining (ASX: SGQ) just signed a second processing deal for niobium production from its project in Brazil.
SGQ signs processing alliance for European rare earths markets
Mar 31, 2026
Mar 31, 2026 |
2 min
Our rare earths and niobium Investment St George Mining (ASX: SGQ) just signed an MOU to test its rare earths on processing tech - as part of an EU funded permanent magnets program…
SGQ signs downstream deal to upgrade magnet rare earths
Mar 12, 2026
Mar 12, 2026 |
4 min
Our rare earths and niobium Investment St George Mining (ASX: SGQ) just signed a strategic alliance with Brazilian nano materials company Nanum Nanotecnologia.
SGQ keeps hitting 100m+ rare earth intercepts from surface
Mar 11, 2026
Mar 11, 2026 |
4 min
Our rare earths and niobium Investment St George Mining (ASX: SGQ) just released more 100m+ fully mineralised intercepts from its rare earth project in Brazil.
Oil & Gas Is Back on the Market's Radar
Apr 18, 2026
Apr 18, 2026 |
15 min
I've always had a soft spot for frontier, “swing for the fences”, ultra high risk-reward oil & gas exploration stocks in Africa. And over the last couple of years it feels like there hasn’t been a major drill campaign that has properly caught the markets undivided attention. With thousands of punters eagerly following updates on rig mobilisation, spud date, drill depth updates and trying to understand technical oil & gas mambo jumbo in drilling progress reports. And if you are extremely lucky - oil & gas shows, a new discovery... and (not even the norm anymore these days) a big share price pop
Sunday Edition: 12th April
Apr 12, 2026
Apr 12, 2026 |
14 min
Here you can find short overviews of all of the content we wrote last week, plus links to each complete note. Lower down, some links to other interesting stuff we came across on our travels around the internet for the week.
Sunday Edition: 5th April
Apr 5, 2026
Apr 5, 2026 |
17 min
Here you can find quick overviews of all the content we wrote last week, plus links to each full note. Further down the article, some links to other interesting stuff we came across on our travels around the internet.
Broken or Sprained? What the Market's Telling Us Right Now
Mar 28, 2026
Mar 28, 2026 |
20 min
Is the market broken again? What could be different this time? Maybe this Iran conflict market freak out of the last few weeks is just a “tweaked hammy” or “dead leg” and recovery will only take a couple of weeks…
Sunday Edition: 22nd March
Mar 22, 2026
Mar 22, 2026 |
22 min
Here you can find links to everything we wrote last week, plus some interesting stuff we came across on our travels.
