St George’s Araxá Project De-Risked by Strategic EPC Partnership and Funding

Strategic Partnership with Global EPC Leader

St George Mining Limited (ASX: SGQ) has taken a significant step forward in advancing its Araxá niobium-rare earth elements (REE) project in Brazil by entering into a binding Memorandum of Understanding (MoU) with Shandong Xinhai Mining Technology & Equipment Inc., a globally recognized mining engineering and construction firm. This partnership not only brings technical expertise but also financial backing, with Xinhai committing to invest A$8 million in St George’s ongoing A$20 million equity raise.

Xinhai’s extensive track record includes over 500 EPC contracts worldwide, spanning mine construction, processing plant design, and operational management. Their involvement is expected to enhance the Araxá Project’s development timeline and de-risk execution through integrated engineering, procurement, and construction management services.

Funding and Contractual Framework

The MoU outlines a framework for collaboration, including Xinhai’s first and last right of refusal for the Engineering, Procurement, Construction, and Management plus Operation (EPCM+O) contract for Araxá. The parties aim to negotiate a definitive Strategic Partnership Agreement within nine months, which will formalize project development strategies and funding solutions.

Importantly, Xinhai will assist St George in securing optimal, non-dilutive funding for the EPC contract, while also obtaining exclusive distribution and marketing rights for 80% of the niobium offtake sold into the Chinese market. This dual role as investor and strategic partner aligns interests closely and could provide a competitive advantage in both project delivery and market access.

Project Context and Market Potential

The Araxá Project, located in the mining-friendly jurisdiction of Minas Gerais, Brazil, is adjacent to CBMM’s world-leading niobium operations. It boasts high-grade niobium mineralization starting from surface, with grades reaching up to 8% Nb2O5 and rare earth elements up to 33% TREO. The region’s established infrastructure and skilled workforce, combined with government support for expedited approvals, position Araxá as a potentially world-class asset.

St George has assembled a seasoned in-country team to drive exploration and development, leveraging Xinhai’s global expertise to fast-track the project’s transition from acquisition to production. The partnership signals strong confidence in Araxá’s near-term development potential and the broader strategic importance of niobium and REEs in global supply chains.

Leadership and Industry Endorsement

John Prineas, Executive Chairman of St George Mining, highlighted the significance of partnering with Xinhai, praising their integrated approach to mine development and energy-efficient solutions. The involvement of Zhang Yunlong, Xinhai’s founder and a respected figure in mining engineering, further underscores the technical and operational strength backing the project.

This collaboration not only brings capital but also a comprehensive suite of services that could reduce project risk and enhance value creation for shareholders. The upcoming shareholder vote on 18 February 2025 will be a key milestone in formalizing this strategic alliance.