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.
$0.093
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: 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: USA signals interest in Brazil rare earths and niobium in potential new trade deal
Jul 28, 2025
Jul 28, 2025 |
9 min
The US has made it clear that the first critical mineral market it wants to beef up is rare earths. 48 hours ago we saw this article saying that the “United States has begun signalling interest in a trade agreement with Brazil focused on access to critical and strategic minerals, including niobium and rare earth elements”. (Source) We think our Investment St George Mining (ASX: SGQ) could be one of the few winners with an asset outside of the US from the big flow of US capital into the critical minerals sector.
SGQ: First rare earths and niobium drill results due any day now… directly next door to ~80% of global niobium production.
Jun 26, 2025
Jun 26, 2025 |
11 min
St George Mining (ASX: SGQ) is drilling right now for rare earths and niobium in Brazil. …and first assays could be announced any day now?
China bans rare earth exports. SGQ has one of the largest and highest grade hard rock, rare earths resources in the world
Apr 15, 2025
Apr 15, 2025 |
14 min
Critical industries in the US rely on imports from China for rare earths and all of their downstream applications, including permanent magnets. Our Investment St George Mining (ASX: SGQ) already has one of the largest and highest grade hard-rock rare earths deposits in the world.
SGQ holds community meeting strengthening local and government support
Dec 4, 2025
Dec 4, 2025 |
4 min
Our rare earths and niobium Investment St George Mining (ASX:SGQ) has just updated on a recent community day it held, attended by over 200 stakeholders.
SGQ hits extensions to the biggest rare earths resources deposit in South America
Nov 24, 2025
Nov 24, 2025 |
3 min
Our rare earths and niobium Investment St George Mining (ASX:SGQ) just hit big extensions to its already large rare earths resource in Brazil.
SGQ settles payments for its Brazilian rare earth project ahead of time
Nov 6, 2025
Nov 6, 2025 |
3 min
Our niobium/rare earths Investment St George Mining (ASX: SGQ) just settled all outstanding payments for its rare earth-niobium project in Brazil.
SGQ hits extensions to its rare earths resource
Oct 15, 2025
Oct 15, 2025 |
3 min
Our niobium/rare earths Investment St George Mining (ASX: SGQ) just hit a big rare earth intercept ~230m west of its existing JORC resource estimate.
SGQ raises $72.5M - Gina Rinehart comes in as SGQ’s new major shareholder
Oct 13, 2025
Oct 13, 2025 |
5 min
Our niobium/rare earths Investment St George Mining (ASX: SGQ) just raised $72.5M… from “major North American and European funds”... AND Gina Rinehart’s Hancock Prospecting - who took $22.5M of the raise.
Sunday Edition: 30th November
Nov 30, 2025
Nov 30, 2025 |
15 min
Tomorrow’s market open promises to be a very interesting one for silver stocks after silver’s near 6% surge on Friday night post the ASX closing… (hitting the highest price in its history and delivering a key breakout of a 50 year chart pattern we have been watching…) Here are all the silver stocks we are Invested in and ones to watch on Monday morning, click on the link to read out Investment thesis for each one:
Sunday Edition: 23rd November
Nov 23, 2025
Nov 23, 2025 |
14 min
Only a few weeks til Christmas now. What might it take for a Santa rally to happen this year? (A Christmas miracle after Friday’s broad sell off? At least global markets bounced back on Friday night promising a positive Monday on the ASX) Below is a summary and links for everything else we wrote about last week, along with some other interesting content we found in relation to our Portfolio.
Sunday Edition: 16th November
Nov 16, 2025
Nov 16, 2025 |
18 min
Yesterday we wrote about what the future of war will look like… And the critical minerals needed by countries to quickly build the biggest armies of autonomous robot war dogs and war drones, with the best AI. Our Investment Island Pharmaceuticals (ASX:ILA)’s drug Galidesivir has the potential to defend against bioweapons. ILA says they are coming out of trading halt tomorrow (Monday) morning “pending an announcement by Island Pharmaceuticals regarding US Food & Drug Administration feedback on Galidesivir program”
Sunday Edition: 9th November
Nov 9, 2025
Nov 9, 2025 |
17 min
Happy Sunday… Below is a summary and links for everything we wrote about last week, along with some other interesting content we found in relation to our Portfolio. We have been talking a lot about the accelerating race between the US and China to be the leading global superpower… … and how the winner in technology, AI and the mass manufacturing of autonomous AI war robots and drones will ultimately be the new global power.
Sunday Edition: 26th October
Oct 26, 2025
Oct 26, 2025 |
17 min
Below you can read about every stock we wrote about this week: But first… The most interesting thing we watched this morning is this interview with the US Secretary for Energy Chris Wright: We think the US critical minerals theme is going to be one of the biggest themes of 2026. (and probably remain strong during the remaining 3 years of the Trump administration… and maybe even another term.)
