SGQ settles payments for its Brazilian rare earth project ahead of time

Our niobium/rare earths Investment St George Mining (ASX: SGQ) just settled all outstanding payments for its rare earth-niobium 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.

Today, SGQ settled the outstanding payments for the acquisition of the project.

For context - SGQ completed the acquisition of the asset from TSX listed Canadian phosphate producer Itafos in February this year for a total of US$21M.

At the time Itafos was focused on reducing debt, so as we saw it, this was a forced sale from them and felt like SGQ got a good deal on the project as a result.

(Not to mention, rare earths were in a serious bear market - so SGQ was picking up the project at the bottom of the market)

The total US$21M was to be paid in stages with US$10M upfront and two milestone payments of US$5M and then US$6M due in 9 and 18 months after completion of the deal.

SGQ settled both of those remaining outstanding payments today, well ahead of when the final payment was due.

Meaning SGQ now owns 100% of the project… unencumbered.

Recently, SGQ raised $72.5M and had Gina Rinehart come onto register with $22.5M of the raise going to her alone.

Now SGQ can spend all of its remaining cash into advancing its projects instead of having to worry about tenure risk and outstanding vendor payments…

SGQ is currently drilling with 1 RC and 3 Diamond drilling rigs, with drilling continuing 24/7 and further assays expected as soon as this week. (source)

So it is full steam ahead with one of the more aggressive drill programs we have seen in a while, looking to upgrade JORC resource well beyond where it sits right now.

As of today, drilling has hit rare earths to the east and to the west…

(Source)

IF SGQ can fill in the gaps between those hits and its resource, then SGQ’s JORC resource could look a lot bigger when SGQ puts out a resource upgrade (scheduled for late this year, source).

Of course, there is a lot of exploration risk here, there is no guarantee all of those areas are mineralised…

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)