St George Mining Ltd ( ASX:SGQ , OTC:SGQMF ) closed the September quarter with a major increase in the Mineral Resource at its 100%-owned Araxá Niobium-Rare Earths Project in Brazil, while advancing permitting, pilot plant testing and plans for downstream rare earth processing.
The updated Araxá Mineral Resource Estimate increased to 111.2 million tonnes at 3.57% total rare earth oxides (TREO), 0.70% magnet rare earth oxides (MREO), 0.68% neodymium-praseodymium and 0.57% niobium pentoxide.
Importantly, Measured and Indicated Resources increased 155% to 75.2 million tonnes, providing a larger high-confidence resource base for feasibility studies, metallurgical work and potential mine planning.
St George ended September with A$86.2 million in cash after completing the second tranche of its A$60 million capital raising during the quarter.
Comparison of rare earth deposits based on mineral tonnage. Source: Terra Studio
Araxá resource increases
The updated Araxá resource contains an estimated 3.98 million tonnes of TREO, including around 760,000 tonnes of NdPr oxides, as well as approximately 630,000 tonnes of niobium pentoxide.
Measured and Indicated material now represents about 68% of the total resource and contains approximately 520,000 tonnes of NdPr oxides and 440,000 tonnes of niobium pentoxide.
The entire resource is contained within about 120 metres of surface and within the weathered profile, supporting the potential for open-pit mining.
Mineralisation also remains open in all directions and at depth.
The current resource covers the main Araxá deposit only and does not include East Araxá, about 1 kilometre to the east, where drilling is underway to support a maiden Mineral Resource Estimate.
Total JORC 2012 MRE – Grade Tonnage Report using a 2% TREO cut-off.
Drilling continues to expand mineralisation
Drilling during the quarter continued to return broad intervals of high-grade rare earth and niobium mineralisation from surface.
One of the strongest results came from AXDD166, which intersected 135.1 metres at 4.86% TREO from surface, including 69 metres at 7.33% TREO and 20 metres at 12.65% TREO.
AXDD167 returned 150.2 metres at 0.72% niobium pentoxide from surface, including 50.7 metres at 0.87% and 19 metres at 1.32%.
AXDD165 intersected 150.5 metres at 3.66% TREO from surface, including 67 metres at 5.46%.
The company also reported a record rare earth intersection of 207 metres at 2.60% TREO in AXDD142.
St George said drilling continued to demonstrate both the continuity of the deposit and extensions beyond the current resource boundary, providing further scope for resource growth and conversion into higher-confidence categories.
Permitting formally begins
St George commenced the permitting process for a potential mine and industrial development at Araxá during the quarter.
The company submitted its Environmental Impact Assessment and Environmental Impact Report to the State Environmental Foundation of Minas Gerais.
The submissions represent the first stage of the licensing process required to obtain Preliminary, Installation and Operation Licences.
The proposed development considered in the environmental work includes an open-pit mine, mineral processing and refining facilities, metallurgical plants, waste and tailings facilities and supporting infrastructure.
The permitting program follows around 14 months of environmental studies and fieldwork and is progressing in parallel with the Araxá feasibility study being led by Worley.
St George is also assessing the potential use of existing regional processing facilities as an alternative development pathway.
Pilot plant program progresses
Pilot-scale metallurgical work commenced at CIT-SENAI in Belo Horizonte during the quarter, using around nine tonnes of near-surface saprolite material from Araxá.
The program builds on earlier beneficiation work that successfully produced separate high-grade niobium and rare earth concentrates.
The pilot study includes grinding, magnetic separation and flotation, with results expected during the fourth quarter of 2026.
Niobium concentrate produced through the program will undergo further beneficiation towards ferroniobium, while rare earth concentrate will be assessed for production of intermediate products including mixed rare earth carbonate.
St George is also constructing a larger pilot plant at the new St George Technological Centre at CEFET's Araxá campus.
The facility is designed for throughput of up to 300 kilograms per hour and will have capability to produce niobium concentrate, rare earth concentrate, mixed rare earth carbonate and rare earth oxides.
Construction is scheduled for completion in December 2026, with operations expected to begin in January 2027.
Brazil processing initiative builds downstream strategy
St George also progressed its downstream strategy during the quarter through a collaboration with the State of Minas Gerais and industrial group Lima & Pergher.
The parties are assessing establishment of the Minas Gerais Rare Earths Processing Centre in Uberlândia.
The proposed facility would process feedstock from rare earth projects across Minas Gerais, including Araxá, with the broader objective of supporting a Brazilian mine-to-magnet supply chain.
St George will contribute technical expertise to the design of the facility and could provide Araxá feedstock for processing.
Funding position remains strong
St George completed the second tranche of its A$60 million placement during the quarter, issuing 175.5 million shares at A$0.10 each to raise A$17.6 million before costs.
This followed the A$42.4 million first tranche completed previously.
Hancock Prospecting increased its holding in St George to 10.3% following completion of the raising.
Option exercises generated a further A$929,000 during the quarter.
St George ended September with A$86.2 million in cash, up from A$80.7 million at the start of the quarter.
Exploration and evaluation expenditure totalled A$6.7 million, while net operating cash outflow was A$7.8 million.
Next steps
St George will continue drilling across Araxá and East Araxá, with East Araxá work focused on defining a maiden resource.
Near-term catalysts include results from the CIT-SENAI pilot program, further feasibility and permitting progress and completion of the St George Technological Centre.
The company will also continue work on the proposed Minas Gerais Rare Earths Processing Centre as it seeks to position Araxá within an integrated Brazilian critical minerals supply chain.
