SGQ hits more high grade rare earths at South America’s biggest deposit

Our rare earths and niobium Investment St George Mining (ASX:SGQ) has just released more thick and high grade results from its rare earths project in Brazil.

SGQ’s project has the following 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%

Which makes it currently 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 drilling the project right now with 3 diamond drilling rigs, 24/7… (source)

Today, we got a set of results which included a 115.65m @ 3.34% TREO and 0.34% Niobium intercept starting from surface:

(Source)

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

Today’s results showed extensions at depth and slightly off to the north-west:

(Source)

Now we wait to see what comes from the current 32 diamond drill holes SGQ has in the lab being assayed and the ~40+ holes SGQ has planned for this round of drilling.

Now that we are seeing extensions at depth, to the east and to the west - we think SGQ’s resource could end up being a lot bigger by the time the current round of drilling is over and a resource upgrade is announced.

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)

Interestingly, the major shareholder of Lynas and MP’s single biggest shareholder, Gina Rinehart, is also a shareholder in SGQ - Gina holds 6.24% of SGQ (source).

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.

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)