SGQ drilling update… assays coming soon
Today, our Investment St George Mining (ASX: SGQ) provided an update on its rare earths and niobium drilling campaign.
So far 40 auger drill holes have been completed with RC drilling commencing on Friday.
This is a wide-spread drill program to test spaces 500m apart - the goal is to get an idea of the geology, which will inform the larger RC drilling program.
The first 100 assays from this program are expected this month.
We are interested in these auger drill holes to the east of the project, we want to see if there is any near-surface mineralisation for SGQ:
SGQ’s project is right next door to the largest operating niobium mine in the world owned by CBMM.
Right now SGQ has two resources:
- 40.6Mt of Rare Earths at grades of 4.13% TREO (total rare earths oxide)
- 41.2Mt of Niobium at grades of 0.63%
This resource only covers 10% of the total project area... and hasn’t been tested at depths beyond ~100m.
Rare earths in the spotlight: MP Minerals up 50% on US Government Investment
At the heart of the current US-China trade war is rare earths.
China holds a dominant position in the global rare earth elements (REEs) market, controlling both mining and processing, particularly refining.
This dominance extends to nearly 70% of global mine production and a large majority of processing capacity, including a near monopoly on heavy rare earths used in high-performance magnets.
In response the US Government made an unprecedented deal with a NYSE-listed company MP Metals, with a multi-billion dollar deal to bring its US-based rare earths mine online.
Here are some of the highlights of the deal:
The US Government will become MP Materials’ largest shareholder (up a 15% owner), with numerous further agreements announced, including:
- Deal will boost US output of rare earths, loosen China's dominance
- Defense Department will guarantee a floor price for key rare earths of US$110/kg NdPr
- Floor price will be twice current Chinese market price
- Plans to build a new magnet manufacturing facility by 2028
- An agreement to purchase 100% of the magnets produced
- MP Materials' shares surge nearly 50% on news of the deal
- US$150M loan from the DoD
- US$400M equity investment by the DoD
This deal highlights the importance of rare earths by Western governments and the potential for rare earths projects like SGQ’s.
What’s next for SGQ?
Drilling results + geophysics 🔄
In the short term the main thing we want to see are drill results.
The first 100 assays from the auger drilling program are scheduled for this quarter, with another 300 assay results to follow after.
Ideally we see big extensions at depth and to the North/East/West of SGQ’s current JORC resource.
We are also looking forward to seeing the results of the geophysical surveys which were completed in today's announcement.
Hopefully they can define clear high priority drill targets (that SGQ ends targets with this round of drilling).
Beyond the drilling 🔄
Over the next 12-18 months, a lot of the catalysts for SGQ could come at hard-to-forecast times:
- Progress on strategic investors/offtake partners - hopefully SGQ can follow up the $8M cornerstone investment it managed to get from Xinhai Group - a global mining services provider - as part of its last raise.
- Finalise the remaining vendor payments - (US$6M due before the end of the year and US$5M due next year).
- Start working on development studies - SGQ has mentioned some of these workstreams are already underway.
- Updates on downstream processing venture - SGQ is also working on a downstream processing process for niobium/rare earths products. This could be an additional upside if SGQ manages to make any material progress on this front.
- Pilot plant trials - SGQ has an agreement in place with Latin America’s only permanent magnet maker. SGQ is participating in the “MAGBRAS Initiative” - a program that has major automakers like Stellantis working toward building Brazil’s first permanent magnet-making facility.
- Permitting - Permitting targeted for full completion by Q4, 2026.
