St George Mining (ASX: SGQ) has significantly advanced its Araxá Project economics following the Brazilian government's approval of a preferential goods tax regime offering up to 18% state tax exemptions on development equipment and materials.
Coupled with ongoing strategic collaborations, this should substantially reduce costs and accelerate feasibility studies and potential production at the high-grade niobium-rare earths project.
The Araxá Project, which St George Mining 100% acquired on 27 February 2025, holds a maiden Mineral Resource Estimate (MRE) announced on 1 April 2025.
The MRE defines 41.2 Mt at 0.68% Nb2O5 for niobium and 40.64 Mt at 4.13% TREO for rare earths, underlining the project's significant potential.
Pilot Plant and Strategic Alliances
A Memorandum of Understanding (MoU) with the Minas Gerais government is in place to support domestic supply chains for both niobium and rare earths, aligning with Brazil's strategic minerals agenda.
Further advancing its processing capabilities, St George Mining has a pilot plant collaboration with CEFET Araxá Campus.
This facility boasts a 200-300 kg/hour capacity for refining and testing ferro-niobium and rare earths products, with operations targeted to commence in Q3/Q4 2026.
In a move to secure future sales, an extended alliance with US-based REalloys aims for a long-term offtake agreement for up to 40% of Araxá's rare earth production.
The MoU period for this alliance has been extended to 12 months.
Resource Expansion Continues
Recent drilling at Araxá continues to redefine the project's resource.
Multiple high-grade, surface-starting intercepts confirm substantial and continuous mineralisation.
For example, drill hole AXDD042 returned 135.2m from surface at 3.37% TREO and 0.58% Nb2O5.
These results indicate mineralisation amenable to open-pit mining methods and significant potential for resource expansion beyond the current 100m depth model.
The resource remains open in all directions.
Drilling is continuing 24/7 with multiple rigs, with campaigns extended indefinitely into 2026, to convert inferred resources and grow the total volume.
Development Funding and Risks
St George Mining has demonstrated its ability to attract capital, having secured a $72.5 million institutional placement in 2025.
The company reported $53 million in cash as of December 2025.
However, despite the recent tax incentives, significant capital expenditure will still be required for the project's development, necessitating further financing.
Key risks to progression include reliance on state support continuity, execution risks inherent in operating in Brazil, commodity price volatility, and the timelines for regulatory approvals.
St George's Path Forward
The newly secured tax regime in Brazil is a significant de-risking event for St George Mining's Araxá project, directly addressing cost concerns and potentially accelerating its development timeline.
Coupled with ongoing resource expansion and strategic downstream partnerships, the company is well-positioned to advance its high-grade niobium and rare earths asset, although execution risks and future funding remain critical watch points.
