St George Mining (ASX: SGQ) has signed a binding memorandum of understanding that provides a framework for collaboration between the company and Shandong Xinhai Mining Technology & Equipment on the development of the advanced, high-grade Araxá niobium-REE project in Minas Gerais, Brazil.
Xinhai is a leading global process engineering and contracting company that specialises in providing engineering design, procurement and construction services to the mining industry. It has completed more than 500 EPC contracts globally, including across Central and South America and covering mine construction and mine operation management services.
Under the binding MoU St George and Xinhai will work together on the development of Araxá. The two parties have agreed to negotiate and enter into a strategic partnership agreement pursuant to which Xinhai will:
- provide advice on metallurgical testing, mineral processing options, plant design and project construction;
- provide a proposal for a fixed-price EPC (engineering, procurement and construction) contract for the development of the Araxá project; and
- assist St George to arrange optimal, non-dilutive funding for the EPC contract.
Xinhai has committed to invest $8 million in the $20 million equity fundraising being completed by St George in support of the Araxá project acquisition.
“We are delighted to be partnering with Xinhai, a truly global mining services provider focused on providing clients with integrated construction and operation solutions for modern, efficient and energy saving mines,” St George executive chairman John Prineas said.
“Xinhai has an impressive track record of delivering high-quality processing plants in expedited timeframes and with competitive pricing.
“Xinhai’s global depth of expertise across the entire spectrum of mine development disciplines – metallurgy, mineral processing, plant engineering, equipment manufacture, plant construction and mine operation management – ensures that it can design and deliver optimal project solutions.
“We also welcome Xinhai as a new shareholder in St George, which will further align our respective interests in advancing the Araxá project to a successful operating mine.
“St George’s ability to attract industry leading partners like Xinhai reflects the near-term development potential of the Araxá project and the favourable mining jurisdiction of Minas Gerais which offers potential for expedited permitting approvals. Led by our experienced in-country management, St George is establishing a highly credentialled team to drive project delivery.”
St George has entered into a conditional binding agreement for the 100% acquisition of the Araxá project and expects to complete the acquisition in Q1 2025. In anticipation, St George has assembled a highly experienced team in Brazil to oversee the first stage of on-the-ground exploration work and development studies.
