SGQ receives government support for its rare earths project

Our niobium/rare earths Investment St George Mining (ASX: SGQ) has just received government support for its project in Brazil.

SGQ owns 100% of the Araxa project which is next door to CBMM, the mine that produces ~80% of the world’s niobium supply.

SGQ’s project is the largest and highest-grade carbonatite-hosted rare earth deposit in South America and second highest grade REE deposit globally in the Western world.

SGQ’s resource currently sits at:

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

SGQ is drilling right now with multiple rigs on site - looking to upgrade that resource before the end of the year.

Today, SGQ received support from the federal government for a pilot plant that will be used for downstream studies in partnership with SGQ…

Here are our key takeaways from today’s announcement:

• SGQ together with its partner (CEFET University) will setup the St George Technological Centre to collaborate on research and downstream studies.
• This collaboration will include a workspace for a large scale pilot plant. SGQ expects the larger scale to reduce costs of processing by ~50%.
• SGQ will also bring onboard 3x senior metallurgical staff which includes in-country experience from the currently operating CBMM mine (next door to the project), which will focus on developing a flowsheet at a larger scale.

Basically, SGQ will be setting up a pilot plant which will allow SGQ to show how its rare earths can be treated into finished products…

Previous processing work has shown that SGQ’s rare earths can be processed to produce rare earth oxalates at >99% purity (with overall recoveries of 86% TREO and successful removal of radionuclides (thorium, uranium).

That was done in continuous 9-month pilot plant studies.

The new collaboration today will mean SGQ can show the market (and corporates) that it can improve on those previous processing numbers and do it at a much larger scale.

Ultimately, we think that the results from the test work will be what attracts potential offtake/strategic partners to SGQ’s project.

More on today’s announcement:

Partnership with CEFET and downstream studies

The government partnership announced today is an agreement with CEFET University (Brazil’s Federal Center for Technological Education of Minas Gerais).

This will establish the St George Technological Centre at CEFET’s Araxa campus.

The new facility will host a large-scale pilot plant and act as a hub for research, development, and innovation in rare earth and niobium processing.

The move is showing SGQ’s developing position as a key player in Brazil’s strategy to build a domestic supply chain for critical minerals and downstream rare earth magnet manufacturing.

The government support includes:

• Financial assistance for project development.
• Tax concessions cutting pilot plant construction and equipment costs by up to 50% (sales and import taxes).
• Free use of facilities at CEFET’s Araxa campus for the construction and operation of the pilot plant.

The technological centre will serve 2 main purposes

• SGQ’s downstream processing studies and pilot-scale production.
• Broader research and educational programs by CEFET in sustainable mining and processing innovation.

New Pilot Plant development to build on previous pilot plant excellent results

This pilot plant is planned to have processing capacity for 200 - 300kg of material input per hour, enabling both beneficiation and hydrometallurgical testing.

This will build on the prior pilot plants that had shown results of 99% purity and 86% TREO recoveries.

This was completed in 2013, where that pilot plant ran for a 9 month study and included the successful removal of radioactive elements of thorium and uranium.

The target outputs from the pilot plant includes:

• Ferroniobium
• Rare earth concentrate
• Mixed rare earth carbonate (MREC)
• Rare earth oxides suitable for magnet production

Government support

SGQ will be funding pilot plant construction and the equipment for this program, but it is expected through government concessions relating to sales & import taxes that the cost will be reduced by around 50%.

As part of this program, SGQ will have exclusive rights to commercialise intellectual property developed at the centre for five years, and potential co-ownership of any jointly developed IP thereafter.

This follows on from prior relationships formed including the processing work study by EMBRAPII (Federal Government scientific agency) that took on 60% of the costs.

SGQ will also be continuing its partnership with the MagBras Project, a public-private initiative to establish rare earth magnet production in Brazil.

Appointment of met experts

To accelerate downstream and processing development, SGQ has assembled a high-profile technical team:

• Alaercio Viera, Metallurgical Consultant - ex-Serra Verde (Brazil’s only operating rare earth mine), CBMM (largest niobium mine globally), CMOC Catalão (second-largest niobium producer), and Taboca (tin/niobium producer).
• Gavin Beer, Principal Consultant at Met-Chem Consulting and competent person for rare earth testwork.
• Peter Adamini, Technical Manager at Independent Metallurgical Operations (IMO) and co-competent person.

What’s next for SGQ?

Drilling results 🔄

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.

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.
• Finalise the remaining vendor payments - (US$6M due before the end of the year and US$5M due next year). Hopefully, SGQ can follow up on the $8M cornerstone investment it managed to get from Xinhai Group earlier this year.

(Source)