St George Mining (ASX: SGQ) Strikes Highest Grades Yet at Araxá

World-Class Rare Earth Potential

St George Mining (ASX:SGQ) has delivered an exceptional run on the ASX, rising 242% over six months despite a recent 40% pullback driven largely by shifting macro sentiment. We’ve covered SGQ extensively in recent months, and today the spotlight is on the company’s Araxá Project in Brazil, which has just produced its thickest and highest-grade intercepts to date.

The standout result for St George Mining was impressive:

• 115 metres at 3.3 percent TREO and 0.34 percent niobium.

This combination firmly places Araxá within the scope of a world-class carbonatite-hosted rare earth system. These grades matter. An average TREO grade of 3–6% is exceptionally high for a carbonatite deposit. For context, global benchmark operations such as Lynas’ Mt Weld (~8%) and MP Materials’ Mountain Pass (~6%) sit at the top end of the grade curve. Araxá compares favourably while delivering far thicker intercepts, which have meaningful implications for future mining economics and scalability.

The niobium grades of 0.3–0.7% are also very significant. They align closely with operating mines in Brazil, including CBMM (~0.6%), which is globally recognised as the largest and most consistent niobium producer. This positions Araxá as a compelling dual-commodity opportunity with clear geological continuity and similarities to existing world-class projects.

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St George Mining Fast-Tracks Araxá Development with Brazilian Government Backing

For investors who may not be familiar with the Araxá Project, given St George only acquired it in February this year, it is a de-risked, world-class rare earths and niobium asset located in Minas Gerais, Brazil, directly adjacent to CBMM, the world’s largest niobium mining operation. This region has a long, proven history of commercial niobium production, offering St George immediate access to established infrastructure, logistics, and a highly skilled workforce.

Since acquiring the project, St George has moved quickly to secure strong government and strategic support. The company has assembled an experienced in-country technical and permitting team, built relationships with key authorities, and negotiated expedited approval pathways to accelerate exploration and development.

St George has also been selected to participate in the Brazilian Federal Government’s MagBrasS Initiative, a national program focused on building a fully integrated rare earth supply chain, including downstream magnet production entirely within Brazil. In October 2024, St George signed a cooperation agreement with the State of Minas Gerais, ensuring government assistance in fast-tracking permitting for Araxá.

St George Mining Delivers Maiden Resource at Araxá

On 1 April 2025, the company announced a maiden Mineral Resource Estimate (MRE) for the project, marking a major milestone that formally establishes Araxá as a significant rare earths and niobium resource on the global stage. The Araxá maiden resource includes 41.2 million tonnes at 0.68% niobium and 40.6 million tonnes at 4.13% TREO, confirming the project’s scale and high-grade profile.

The investor’s takeaway for SGQ

Our earlier analysis at Pitt Street Research (August) modelled the Araxá Project at an NPV of US$1,281.5 million (A$2,066.9 million) in the base case, and US$1,978.6 million (A$3,191.2 million) in the optimistic case. Based on comparable market behaviour for pre-development rare earths projects, Pitt Street suggested that SGQ could reasonably trade at around 25% of its project NPV.
On that basis, SGQ’s implied valuation range sits between $0.13 and $0.21 per share. If St George continues to advance Araxá through resource expansion, permitting, and early development milestones, the current market capitalisation is unlikely to remain at these levels for long.

St George Mining is client of Pitt Street Research. Pitt Street directors own shares in SGQ.