SGQ signs niobium and rare earths tech agreement - with development in mind
Today, our Investment St George Mining (ASX: SGQ) announced it has entered into a Technical Collaboration Agreement with leading Brazilian scientific agencies.
The two agencies (EMBRAPII and SENAI) and SGQ will work together to develop sustainable processing for niobium and rare earth elements (REE) at its Araxa Project.
We see this as a good signal from SGQ that it is thinking ahead to development of the project - aiming to design an optimised flow sheet to ensure the company gets the most value out of what is already a very high grade niobium and rare earths project.
Recoveries are very important to processing these critical raw materials which already form a significant part of Brazil’s critical raw materials push.
The country is currently home to a company called CBMM which produces ~80% of the world’s niobium.
(CBMM’s mine also happens to be immediately adjacent to SGQ’s project in the state of Minas Gerais, Brazil)
SGQ has been busy laying down roots in Brazil after previously appointing Adolfo Sachida, Brazil’s former Minister of Mines and Energy, and now this agreement which will involve:
- A Brazilian government originated subsidy (EMBRAPII and SENAI are both government funded agencies), with 60% funding from the two Brazilian agencies and 40% from St George.
- SGQ will have exclusive 10-year commercialization rights for the intellectual property developed.
SGQ already has an MoU in place with one of the agencies in today’s announcement (SENAI) which is to cooperate on research, development and production of rare earth magnets at SENAI’s Lab Fab Facility in Minas Gerais.
We see this as good evidence of SGQ’s ongoing ability to gel with local stakeholders to ensure its all systems go once the project acquisition completes.
By partnering with government-funded agencies, SGQ is also leveraging local expertise and reducing future development costs.
Today’s news comes just a day after SGQ secured $20M for the Araxa project transaction:
SGQ secures $20M in funding for advanced Brazilian niobium/REE asset
Why SGQ’s niobium and rare earths matter right now:
The global push for clean energy and advanced technologies is driving demand for critical metals like niobium and rare earth elements (REEs).
Niobium is crucial for producing stronger, lighter steel used in infrastructure and electric vehicles, while REEs are essential for permanent magnets in wind turbines and EV motors.
How does this impact our SGQ Investment Memo?
As a final important point, the Brazilian government subsidy for the program also reflects the importance governments are placing on diversifying the niobium supply chain and critical raw materials more generally.
Today’s news re-affirms our Investment Thesis, specifically the following key reason we Invested in SGQ:
Niobium is a critical mineral. Governments want it, SGQ has it.
80% of the global niobium supply is controlled by one company CBMM. Niobium sits as the second highest risk metal on the critical materials list for both the EU and the US for supply concentration.
Source: 6 August 2024 SGQ Investment Memo
What’s next for SGQ?
The two main milestones we want to see SGQ complete over the coming months are:
- Complete the $20M capital raise - we want to see the cash hit SGQ’s bank account, and the new shares trading on the ASX.
- Make the initial payment to the vendors of the asset and finalise the acquisition - this one should be done before that deadline date of 15th March 2025.
Read our first note on our SGQ Investment below, which covers our Investment Thesis in detail:
