St George lands big partner for Brazil niobium project

[Pelican Press 0]

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St George lands big partner for Brazil niobium project

St George Mining has bolstered development plans for its high-grade Araxá niobium-rare earths project in the rapidy advancing mineral jurisdiction of Minais Gerais in Brazil. The company recently signed a strategic development and offtake partnership at the project with leading global metals trader SKI HongKong.

The non-binding memorandum of understanding (MoU) signed with SKI endeavours to drive development of the Araxá project through both technical and financial assistance to accelerated project feasibility studies ahead of potential project development.

St George says SKI’s involvement confirms the project’s potential as a significant supplier of niobium amidst growing global demand. It says the MoU provides a framework for St George and SKI to explore key opportunities surrounding the marketing of niobium products whilst ensuring future niobium supply for SKI.

Central to the agreement are negotiations on securing a minimum 20 per cent of niobium offtake for SKI, in addition to exploring pre-payment options either through direct investment and/or other funding mechanisms to St George that could accelerate the project’s development.

SKI is a privately owned trading house renowned for its expertise in niobium, manganese and chrome products. It currently sources niobium exclusively from Canada’s Niobec mine, the world’s third-largest niobium producer. St George believes it can leverage SKI’s significant expertise to reinforce its further niobium market ************ for future offtakes.

SKI’s objective is to secure a long-term reliable supply of high-quality niobium products against the market background of fast-growing global demand for niobium as well as geo-political issues that may restrict access to this highly rated critical metal.

St George acquired the Araxá niobium-rare earths project for US$21 million (AU$31 million) and 100 million shares from TSX-listed Itafos in August this year.

The project is hosted within Brazil’s renowned Barreiro carbonatite complex, a world-class rare earths host rock operated by neighbour Companhia Brasileira de Metalurgia e Mineracao (CBMM) – the world’s biggest producer of niobium.

St George says it is on track to finalise the 100 per cent acquisition of the Araxá project – a condition of the ********* MoU – following recent overwhelming shareholder support.

The company says the MoU leaves some room for other potential off-takers providing the ability for it to pursue further strategic partnerships and secure vital funding ahead of the all important final investment decision.

Management will now launch into a 5000m diamond drilling program expected for next month, with the aim of confirming historical drill results and delving deeper along known high-grade mineralisation to test its depth extents.

The drilling will be proceeded by production of a sample saleable niobium product in the first half of next year.

The samples will be tested by SKI and its clients directly, with the goal of finalising a premium product with exact specifications catered for global markets.

St George believes its latest strategic collaboration significantly de-risks the Araxá project and reinforces its ambition to become a key player in the global niobium sector.

Niobium-rich carbonatites have raised plenty of attention among ASX watchers of late after WA1 Resources ran from 18c to more than $18 when it intersected a carbonatite grading 1.22 per cent niobium pentoxide in WA. WA1’s market cap touched $1 billion before settling in at around $850m on the back of its discovery.

As niobium demand rises, driven by its critical role in advanced steel production, St George is jostling to become one of a select few producers globally, eager to capitalise on a growing market with the strategically located Araxá project.

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