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St George Mining Ltd (ASX:SGQ) has announced a significant development in its exploration portfolio with the acquisition of the Araxá Project in Brazil. The project, located in Minas Gerais, is adjacent to the world’s largest niobium mine operated by CBMM, which produces around 80% of the world’s niobium. ASX mining stock St George Mining is set to make a global impact with this significant venture.
High-Grade Mineralization
Historical drilling at Araxá has revealed extensive high-grade mineralization, including:
- Over 500 intercepts of niobium with grades exceeding 1% Nb2O5.
- Ultra-high grades up to 8% Nb2O5, 33% Total Rare Earth Oxides (TREO), and 32% Phosphate (P2O5).
- Mineralization that starts from the surface and extends in all directions.
The project benefits from its strategic location in a well-established mining district, with access to necessary infrastructure and labor, which are favorable for near-term development. St George Mining's executive chairman, John Prineas, highlighted the project's significant potential, noting its proximity to CBMM's flagship niobium mine and Mosaic's world-class phosphate mine.
Global Potential
The Araxá Project is situated in a premier location for niobium production, offering a considerable opportunity for St George to establish itself as a global player in the niobium market. With over 500 high-grade niobium intercepts already discovered, the project provides a solid foundation for progressing toward resource definition. Drilling has also confirmed high-grade rare earth mineralization across a wide area.
Future Exploration
Following the acquisition, St George plans to undertake up to 5,000 meters of diamond drilling. This drilling will focus on confirming historical results, exploring along strike, and testing the depth extent of mineralization. New results, combined with historical data, will contribute to a mineral resource estimate for the project. With less than 10% of the project area drilled and limited exploration beyond 50 meters from the surface, there is substantial potential for expansion.
Investor Support and Funding
The acquisition of Itafos Araxá Mineracao E Fertilizantes S.A (Itafos Araxá), which owns the Araxá Project, involves a cash payment of US$10 million at the transaction's closing, with deferred payments of US$6 million and US$5 million due nine and 18 months later, respectively. St George has secured firm commitments from investors for a $21.25 million capital raise at $0.025 per share. This funding will be allocated towards acquisition costs, the planned drilling program, and working capital.
Prineas expressed satisfaction with the strong investor support, stating that the funds will enable St George to advance the project and strengthen its position in the niobium and rare earths sectors. Itafos Inc (TSX-V: IFOS), the vendor of the Araxá Project, will also become a significant shareholder in St George.
This acquisition marks a notable expansion for St George Mining, enhancing its exploration portfolio with a high-quality project in a key global mining district.
