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St George Mining’s Capital Raise for Araxá Project in Brazil Sees Big-Name Backing

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By Colin Hay - 
St George Mining ASX SGQ Capital Raise Araxá Project Brazil Big-Name Backing
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St George Mining (ASX: SGQ) can count Australia mining figurehead Gina Rinehart’s Hancock Prospecting among those backing a $72.5 million capital raising to support development of its Araxá rare earths-niobium project in Brazil.

The placement will see St George issue 725 million new ordinary shares at a price of $0.10, with Hancock Prospecting taking up 225 million shares to emerge as a substantial shareholder.

The company increased the size of the raising due to the strong levels of institutional and strategic partner interest in Araxá—including from major North American and European funds, as well as local institutions and existing shareholders.

Feasibility Studies and FID

St George will use proceeds from the placement to advance Araxá through feasibility study work and towards a financial investment decision (FID).

“These workstreams complement an aggressive drilling program underway at the Araxá project to expand and upgrade the already world-scale mineral resource estimate (MRE),” executive chair John Prineas said.

Araxá’s current MRE comprises a globally significant resource of 40.6 million tonnes at 4.13% total rare earth oxides and 41.2Mt at 0.68% niobium.

The project in Minas Gerais also hosts large quantities of other rare earth elements including samarium, lutetium, terbium, and gadolinium—all of which are in the US Department of Interior’s Top 10 critical minerals list.

Enormous Potential Recognised

Mr Prineas said the strong support from local and overseas institutional investors recognised the enormous potential of Araxá.

“Araxá and its favourable project logistics – ready access to transport infrastructure, renewable power, and workforce – is attracting substantial investor interest at a time when there is unprecedented action globally by both governments and private enterprise to establish new and secure supply chains for critical minerals products,” Mr Prineas said.

St George has assembled a highly experienced in-country team and established relationships with key parties and authorities in Brazil to drive the project through exploration work and development studies.

“We believe the Araxá project has the potential to be developed under an accelerated timeline to become one of the few next-generation rare earths and niobium producers worldwide, something investors are wanting to be part of.”