St George Mining has surged from $50m to >$250m in just 5 months and its latest drilling results are spectacular!

St George Mining (ASX:SGQ) has had a spectacular few months capped off with its latest drilling results. Its Araxa Niobium-REE Project in Brazil lies next to a mine that is one of the world’s very few producing niobium mines and is also the world’s largest. It has an Independent JORC Mineral Resource Estimate (MRE) of 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). And this was before the company’s latest exploration campaign which has hinted that this could be just the beginning.

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Recap of St George Mining

St George is aiming to bring the Araxa niobium project into production. This time last year, it only just announced the acquisition of the project and only completed it in February this year. Although the project was in a friendly jurisdiction, had a NPV of over US$900m according to a 2013 Preliminary Economic Assessment and had necessary infrastructure; previous owners were not able to make the progress SGQ had. 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.

But arguably the biggest positive trait of this project was the abundance of niobium. Niobium is a metal traditionally used in High-Strength Low-Alloy (HSLA) steel to make it lighter and stronger, but is increasingly being used in lithium-ion batteries. It is often joked that ‘rare earths’ typically aren’t ‘rare’ in the sense there many deposits for them – this is true for some like NdPr, but not with niobium. Given the need for niobium – particularly sources in Western-friendly jurisdictions – any companies that stumble across deposits are re-rated with WA1 Resources (ASX:WAK) and Arafura (ASX:ARU) being two examples. And it seems SGQ is following in those companies’ footsteps.

Within 2 months of picking up the project, SGQ defined the current JORC Resource. But the company commenced an exploration campaign and to say the results have been special would be an understatement.

Good exploration results

The results confirmed the scale and continuity of known mineralisation and potential for there to be more. Drilling results showed grades of up to 13.98% TREO and 7% niobium in individual sections. Other results included:

• 41m @ 4.52% TREO and 0.87% niobium from the surface (AXRC002),
• 13m @ 7.06% TREO and 1.45% niobium from 4m (AXRC002),
• 11m @ 7.03% TREO and 0.91% niobium from 5m (ARXC001);
• 16m @ 5.56% TREO and 0.81% niobium from the surface (ARXC001), and
• 5m @ 11.83% TREO and 3.12% niobium from 8m (AXRC003).

Source: Company

What would have also pleased investors was that there were strong NdPr values as well, up to 2.89% NdPr in some places with a ratio of NdPr-to-TREO of up to 42%. There was also an increase occurrence of Heavy REEs – including terbium, lutetium, gadolinium and dysprosium. Moreover, further assays 1km east of the MRE have also confirmed high-grade rare earths, with grades of up to 13.4% TREO.

But wait, there’s more

Just two weeks after those results, SGQ revealed new results which were the first set of assays outside the area of its MRE – 1km to the east. Results included grades of up to 16.87% TREO and 4.06% niobium.

There were also solid grades of other rare earths, particularly samarium (up to 2,600ppm) which is used in magnets that go into military equipment, particularly F-35 fighter planes. There were high-grade NdPr results too, with grades up to 3.96%. Other rare earths present include dysprosium, terbium, lutetium and gadolinium.

This area has been named East Araxa and SGQ will continue drilling there, with the aim of an inferred resource being released in Q4 of 2025. There are three diamond drill rigs operating 24/7 on the site and there is more than 8,000m of drilling still to be completed. This highlights that there is enormous potential value to be unlocked here.

Also in September 2025, SGQ unveiled a Memorandum of Understanding (MoU) with REAlloys, a leader in the US magnet supply chain (one of the country’s biggest suppliers). It produces high-performance neodymium iron boron and samarium cobalt magnet materials for US government organisations including the Defence Logistics Agency (DLA) and the US Department of Energy’s AMES National Laboratory (AMES) as well as for US-based industrial companies involved in defence, aerospace and electronics.

In our view, this validates the project and will increase the urgency for other would-be customers to ‘get in’ before all the offtake is spoken for. The company has reported interest from other downstream players interested in offtake, looking for sources of high-grade rare earths outside China.

Conclusion

With three diamond drill rigs on the site, operating in tandem with an RC drill rig, there will be a strong pipeline of upcoming assay results. Drilling will continue for the rest of this calendar year and assays will be available on a four-week basis. We believe the exciting times are only just beginning.

Disclosure: St George is a research client of Pitt Street Research. Pitt Street staff and directors own shares in St George Mining