SGQ hits extensions to the biggest rare earths resources deposit in South America

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’s project is already the largest and highest-grade carbonatite-hosted rare earths resource in South America - in Brazil.

(and the second-highest grade rare earths resource in the Western world)

Today, SGQ put out results from another six diamond drillholes all intercepting ~80-100M of rare earths with grades up to 9.13% (TREO) in some portions.

Some of the holes came from inside the current resource footprint, but a few were extensional (step-out) holes…

So drilling is continuing to show us that SGQ’s resource could get a lot bigger by the time the current round of drilling is over.

SGQ is currently drilling 24/7 with 3 diamond drill rigs on site with another 40 holes to be drilled.

SGQ’s project already has:

• 40.6Mt of Rare Earths at grades of 4.13% TREO (total rare earths oxide)
• 41.2Mt of Niobium at grades of 0.63%

In terms of grade, SGQ is comparable to ~$15BN Lynas’ project.

In terms of size, SGQ is comparable to ~$15BN MP Materials’ project.

SGQ also shares a common major shareholder with those two companies - Gina Rinehart’s Hancock Prospecting…

A week ago it was reported Gina is now MP Materials’ biggest individual shareholder…

Gina also took $22.5M of SGQ’s last capital raise and holds ~6% of the company (once the shares are settled)…

We think the institutional appeal of SGQ’s asset comes from the potential size and grade the resource could have by the time its current drilling program is completed.

SGQ has already shown the resource could extend ~230m to the west and ~1km to the east (source) (source).

(Source)

Now we wait to see what comes from the other 29 diamond drill holes SGQ has in the lab being assayed and the ~40+ holes SGQ has planned for this round of drilling:

We are hoping to see SGQ take its project resource up to a size/grade where it becomes too hard to ignore relative to the assets owned by the majors MP and Lynas…

Here is how SGQ’s asset compares to the assets held by MP and Lynas right now:

(Source)

What’s next for SGQ?

Drilling results 🔄

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.
• Start working on development studies - SGQ has already commenced environmental, geotechnical and development studies with a view of getting to economic studies in Q4-2025.
• 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)