Key highlights

• St George Mining reported a substantial increase in the Mineral Resource at its wholly owned Araxá Niobium-Rare Earths Project in Minas Gerais, Brazil.

• The update was summarised in the company's quarterly report, lodged with the ASX on 30 October.

• This update covers the contained metal, shallow and open mineralisation, and the funding and development steps.

St George Mining (ASX:SGQ) reported a substantial increase in the Mineral Resource at its wholly owned Araxá Niobium-Rare Earths Project in Minas Gerais, Brazil, during the September quarter. The update was summarised in the company's quarterly report, lodged with the ASX on 30 October.

The resource now stands at 111.2 million tonnes at 3.57% total rare earth oxides (TREO), 0.70% magnet rare earth oxides, 0.68% neodymium-praseodymium (NdPr) oxide and 0.57% niobium pentoxide, using a 2% TREO cut-off.

The more important change may be confidence. Measured and Indicated Resources rose 155% to 75.2 million tonnes, now about 68% of the total. Those higher-confidence categories are needed for feasibility studies and mine planning, and are a prerequisite for declaring Ore Reserves. Under the JORC Code, Inferred material cannot be converted directly into reserves, so lifting confidence is often as valuable as adding tonnes. The increase therefore gives St George a firmer basis for the technical studies it has said it intends to pursue. It also lets future drilling focus more heavily on extensions such as East Araxá.

Contained metal

St George estimates the resource contains about 3.98 million tonnes of TREO, including around 760,000 tonnes of NdPr oxides, plus about 630,000 tonnes of niobium pentoxide. The Measured and Indicated portion contains roughly 520,000 tonnes of NdPr oxides and 440,000 tonnes of niobium pentoxide.

Contained metal figures describe what is in the ground before mining and processing losses. They are not production forecasts, and recoveries for rare earths in particular depend heavily on mineralogy and flowsheet design.

Shallow and open

The entire resource lies within about 120 metres of surface and within the weathered profile, which the company says supports potential open-pit mining. Mineralisation remains open in all directions and at depth. The estimate covers the main Araxá deposit only and excludes East Araxá, about one kilometre east, where drilling is under way for a maiden estimate.

Recent drilling

Drilling during the quarter returned broad intervals from surface. AXDD166 intersected 135.1 metres at 4.86% TREO, including 69 metres at 7.33% and 20 metres at 12.65%. AXDD167 returned 150.2 metres at 0.72% niobium pentoxide from surface, and AXDD165 intersected 150.5 metres at 3.66% TREO. The company also reported a record rare earth interval of 207 metres at 2.60% TREO in AXDD142. These are downhole lengths.

Funding and development steps

St George ended September with A$86.2 million in cash after completing the second Tranche of a A$60 million Capital raising. The quarter also brought progress on permitting, pilot plant testing and plans for Downstream rare earth processing. In early September, the company had started pilot-scale test work to advance its flowsheet.

Why it matters

Araxá is a well-known niobium district: CBMM's nearby operation is one of the world's largest niobium producers. A project that combines rare earths and niobium could appeal to buyers seeking Supply outside China, which dominates rare earth processing. Western governments and manufacturers have been looking for alternative sources of magnet materials. Niobium is used mainly in high-strength steel, and supply is concentrated among a few large producers. A new source could interest steelmakers, although niobium pricing is generally less transparent than for many other metals.

That said, rare earth projects are technically demanding. Flowsheet development, product specifications and offtake negotiations often take years, and prices for NdPr have been volatile. St George has not yet published a feasibility study or reserve.

What to watch

Investors may watch for the maiden East Araxá estimate, pilot plant results, permitting milestones and any economic study.