St George Mining Ltd (ASX:SGQ) has locked in funding to acquire the high-grade Araxá Niobium and Rare Earth Elements (REE) Project in Brazil with firm commitments received to raise $20 million via a placement to institutional and sophisticated investors.
Funds will support acquisition costs as well as exploration expenses and working capital for the advanced niobium-REE project in the Brazilian state of Minas Gerais.
Araxá Project is a de-risked, world-class project adjacent to CBMM's industry-leading niobium mine in a premier global niobium address
The project boasts extensive high-grade niobium and REE mineralisation confirmed by drilling, a long history of commercial niobium production in the region, access to infrastructure and workforce, first-rate in-country management and government support for expedited project approvals.
Strong investor interest
"We are delighted to be able to announce that funding for the acquisition of the Araxá Project has been arranged with very strong investor interest for our $20 million raise,” St George Mining executive chair John Prineas said.
"The successful capital raise recognises the de-risked nature of the Araxá Project — with extensive high-grade niobium and rare earths mineralisation already confirmed by drilling at a time when these critical metals are highly sought after globally by industry and governments alike.
"Work programs have already been planned for 2025 including drilling at Araxá that will start once we take ownership of the project.
"We look forward to finalising the acquisition of the project in Q1 2025 and advancing initiatives at Araxá to unlock the full potential value of this world-class asset.”
World-class potential
St George has been very active in laying the platform to leverage the advanced status of the project. It has signed a cooperation agreement with the State of Minas Gerais to expedite project approvals as well as partnership agreements for potential downstream processing of the Araxá mineralisation.
The company has also appointed industry-leading environmental consultants and established its own high-quality, in-country team with more than 40 years of combined experience in the niobium business.
The project has world-class potential with high-grade mineralisation that commences from surface with more than 500 intercepts of high-grade niobium (>1% Nb2O5) and rare earths with grades up to 8% Nb2O5 and 33% TREO.
Share placement
The placement will see the company issue 1,000,000,000 ordinary shares at $0.02 per share, with subscribers to receive one free attaching option for every two shares subscribed for and issued. Each option will have a $0.04 exercise price and expire two years after the date of issue.
St George’s acquisition of the Araxá Project was announced last August and the transaction is due to be completed in the current quarter. This placement replaces an earlier equity-raising proposal announced at the time of the acquisition agreement in August 2024.
The company will convene a general meeting of shareholders in early to mid-February 2025, seeking approval for the capital raising and other payments to complete the acquisition of the Araxá Project.