ASX-listed explorer St George Mining has entered into a binding conditional agreement with Itafos Araxá Mineracao E Fertilizantes S.A to acquire the Araxá niobium-rare earth elements project.
The Araxá project is located 5km south of Araxá in Minas Gerais State, Brazil. The project is immediately adjacent to Companhia Brasileira de Metalurgia e Mineracao’s niobium mine that produces approximately 80 per cent of the world’s niobium, demonstrating Araxá’s position within a first-class mining jurisdiction.
“The Araxá project is located in the world’s ‘dress circle’ for niobium production and presents a tremendous opportunity for St George to become a global player in the niobium market,” St George Mining executive chairman John Prineas said.
Historical drilling at Araxá has defined extensive high-grade niobium, rare earth elements and phosphate mineralisation, with the project’s measured and indicated mineral resources currently comprising 6.3 million tonnes (Mt) at five per cent total rare earth oxides (TREO) and one per cent niobium pentoxide.
“Extensive high-grade niobium mineralisation has already been discovered at the project – with more than 500 intercepts of niobium grades above one per cent – providing a strong foundation for St George to quickly progress to potential resource definition,” Prineas said. “In addition to niobium, high-grade rare earths mineralisation has been confirmed by drilling over a widespread area.
“The high-grade mineralisation commences at surface and is open in all directions, with excellent prospects to substantially expand the known mineralised footprint. Significantly, less than 10 per cent of the project area has been effectively drilled and there has been limited drilling beyond 50m from surface.”
To fund the Araxá acquisition, St George has received firm commitments from investors to raise $21.25 million in new funds. The funding will towards acquisition costs and working capital.
It will also cover a diamond drill program St George plans to undertake upon the acquisition’s finalisation. The inaugural 5000m drilling program will focus on further confirming historical drill results, exploration along strike of known high-grade mineralisation and testing the depth extent of mineralisation.
“We are delighted with the strong investor support for the Araxá acquisition with firm commitments received for our $21.25 million fund raising,” Prineas said.
“This provides St George with a strong platform to leverage the advanced status of the project and continue on the path to being a globally significant player in the niobium and rare earths sector.
“We also look forward to welcoming Itafos Inc, a global fertiliser company and the vendor of the Araxá project, as a new and substantial shareholder of St George on completion of the acquisition.”
Niobium is one of the 31 minerals listed on Australia’s critical minerals list, which outlines minerals that are essential to low-emission technology, the economy and national security, and whose supply chains are vulnerable to disruption. The commodity is currently only mined in Brazil and Canada.
According to Geoscience Australia, around 90 per cent of niobium is used within the steel industry, primarily as a micro alloy with iron in the construction and automotive industries.
It is also known as an important mineral in advanced lithium-ion batteries as it possesses fast charging capabilities, stable delivery of high energy densities, and improved safety in longer durability.
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