St George has raised a staggering $72.5m to advance Araxa & Gina Rinehart’s Hancock Prospecting chipped in $22.5m!

Gina Rinehart’s Hancock Prospecting has invested $22.5m in St George Mining’s (ASX:SGQ) latest capital raising. It caps off a spectacular 6 months for the company, and for those hoping for niobium sources in Western friendly jurisdictions.

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Recap of St George Mining and its journey

15 months ago – in July 2024; St George did not even have the Araxa project. Then, when St George picked up the project, investors could be forgiven for saying ‘yeah, another niobium wannabe’, shrugging their collective shoulders, and moving on. And for some months, they did, but the company has never looked back since that company-making decision.

SGQdelivered its maiden Independent JORC Mineral Resource estimate in early April 2025. It now has 41.2 million tonnes at 0.68% Nb2O5 and a Rare Earths Resource of 40.6 million tonnes at 4.13% TREO (41,300 ppm TREO). The MRE contains 280,000 tonnes of niobium oxide and 1.7Mt of TREO.

Thereafter, SGQ undertook a drilling campaign and esults showed grades of up to 13.98% TREO and 7% niobium in individual sections in sections covering the current resource, and grades of up to 16.87% TREO and 4.06% niobium in sections outside the current resource.

There are other rare earths present at Araxa including NdPr, samarium, dysprosium, terbium, lutetium and gadolinium; which are in the US Department of Interior’s Top 10 critical minerals.

SGQ’s management believes that Araxa looks very similar to the Mt Weld carbonatite-hosted rare earths deposit in Western Australia which was the company-maker for Lynas Rare Earths (ASX: LYC).

Araxa is in a Western friendly jurisdiction

Niobium is a critical metal used most commonly in High-Strength Low-Alloy (HSLA) steel, but is increasingly used in electric vehicles because it can enhance their performance. If you put niobium in the anode of an EV’s battery battery, you can markedly increase the range of a battery, its useful life, and the speed with which it can be recharged

Nonetheless, it is all well and good to have a high-grade deposit, but you need to be sure that you can make money in the process, in the sense that the project is economical to mine, and that geopolitical tensions will not be a stumbling block towards this.

These will not be a problem here. Araxa lies in Brazil, right next to the world’s largest niobium mine, and it has signed strategic alliances with REAlloys and MagBras to position the company for commercialisation.

More capital raised, and Hancock Prospecting has chipped in

SGQ raised a total of $72.5m to advance the project through further drilling and a Final Investment Decision. $22.5m was chipped in by Hancock Prospecting, which is Gina Rinehart’s company.

Of course, having Australia’s richest person invest in you is worth crowing about. But what is more important is that Hancock has experience in investing in and developing rare earths projects. It is easy to forget that Hancock was already an investor but opted to top up its stake rather than be diluted.

A further $50m was raised at $0.10 per share from various institutional investors, led by major North American and European funds. These shares will be gradually issued over the next 2 months, with Hancock’s shares needing shareholder approval at SGQ’s AGM which will be held at the end of November.

A terrific few months, but there’s more upside ahead

Our friends at Pitt Street Research found an NPV of $2bn in a base case scenario and believe that it would be fair for SGQ to trade at 33% of that and this would be $0.18 per share. We expect the gap to continue to close in the coming months as exploration continues and SGQ edges towards its goal of haivng Araxa as a major niobium mine.

St George Mining is a research client of Pitt Street Research. Pitt Street Research directors own shares.