SGQ appoints US advisor for rare earths project
The US government just made its second big investment into a rare earths company with a $1.6BN deal ($US277M federal funding and $1.3BN loan)...
(source)
And just last week US listed rare earth producer Energy Fuels put in a takeover offer for ASX listed Australian Strategic Metals… (source)
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US capital markets and the US government) are still very much activated and looking to put capital to work in rare earths companies right now…
All strong tailwinds for our Investment St George Mining (ASX: SGQ).
SGQ has the largest and highest-grade carbonatite-hosted rare earth deposit in South America…
… and the second highest grade REE deposit globally in the Western world.
SGQ is currently drilling with 3 rigs, 24/7 so that resource could get a lot bigger soon too - a resource upgrade is expected later this quarter. (source)
Now, SGQ has “Ervin Graves” onboard as an advisor to support its relationships with the US government.
Ervin Graves has a team that has worked at the highest level of US Government and includes the Chief of Staff to the Secretary of War at the same time that the Pentagon investment was made into MP Materials…
The mandate with SGQ is to:
“advance St George’s engagement with US Government and US private enterprises including providing advice on discussions for potential commercial arrangements and public-private partnerships to support the development of the Company’s Araxá Project” (source)
So basically SGQ is now making a stronger push into the US, looking to attract US funding to its project, just as the US and Brazil could sign a critical minerals deal of their own.
Is a US - Brazil critical minerals deal close?
A few weeks back we watched the special secretary to the US President talk about the importance of critical minerals and… partnering with friendly countries and spending hundreds of $ billions to secure the USA's supply…
(on a panel with three South American mining companies)
Then, only 12 hours later the following news article was published in the Financial Times where a political risk consultant said that a US-Brazil agreement on critical minerals could happen soon - “75 per cent odds of some kind of deal occurring by Q1”:
And on top of all of that the US government’s International Development Finance Corporation (DFC) recently agreed to loan US$465M to Brazil’s only operational rare earths mine in Goias state.
So the USA is obviously comfortable with investing in Brazil.
We think that SGQ’s asset is one of those that is surely on a lot of different watchlists (be it corporates and governments around the world).
In terms of grade, SGQ is comparable to ~$16BN Lynas’ project.
In terms of size, SGQ is comparable to ~US$17BN MP Materials’ project.
And SGQ has a partnership with REAlloys (that it is expanding) - REAlloys is a US based magnet producer for the government and specialist industries such as defence, nuclear and robotics.
It recently got funding to expand their Ohio Facility production with a US$200M Letter of Interest from EXIM..
Maybe now, with advisors also in SGQ’s corner we might see the push for US capital get a lot more traction?
We are hoping so.
What’s next for SGQ?
Drilling results 🔄
As of the most recent drilling announcement, “Assays are pending for 32 drill holes at the laboratory with the drill campaign extended indefinitely into 2026 to further test the limits of the growing footprint of the mineral system.” (source)
Drilling is still ongoing on site (24/7) - here is a picture from a recent announcement showing the night shift crew drill the asset:
(Source)
In the short term the main thing we want to see are drill results.
Ideally we see big extensions at depth and to the north/east/west of SGQ’s current JORC resource estimate, which initial results like those today have shown.
(Source)
Beyond the drilling 🔄
Over the next 12-18 months, a lot of the catalysts for SGQ could come at hard-to-forecast times:
- Updates on downstream processing strategy - We want to see SGQ define its downstream rare earths strategy. We are especially looking forward to an update in relation to the US.
- Work on development studies - SGQ has already commenced environmental, geotechnical and development studies, which were mentioned as continuing here and in the most recent quarterly, that negotiations with government were underway to expedite these (source).
- Pilot plant trials - SGQ has signed an agreement with CEFET to jointly collaborate on a new Pilot Plant trial that will build on the prior 9 month trial from 2012-13 which successfully produced rare earth product at over 99% purity and recoveries of 86% TREO.
SGQ is also participating in the “MAGBRAS Initiative” - a program that has major automakers like Stellantis working toward building Brazil’s first permanent magnet-making facility.
- Metwork and sample production - SGQ should have results from this in the pipeline with the creation of the St George Technical Centre. The main catalyst we are looking forward to is the re-starting of SGQ’s pilot plant with development of this underway with the agreement signed with CEFET to host and jointly collaborate. This will allow for product samples to be produced for potential strategics/offtake partners.
- Permitting - SGQ is targeting completion for permitting by Q4-2026.
(Source)
