St George Mining (ASX: SGQ) has announced a Memorandum of Understanding with REAlloys Inc to create a strategic alliance for both parties to collaborate on the commercialisation of the rare earths resource at the company’s 100%-owned advanced, high-grade Araxá niobium-REE Project in Minas Gerais, Brazil.
REAlloys is a leader in the US magnet supply chain with US Government contracts. It produces high-performance neodymium iron boron (NdFeB) and samarium cobalt (SmCo) magnet materials for organisations including the Defense Logistics Agency and the US Department of Energy’s AMES National Laboratory as well as for US-based industrial companies involved in defence, aerospace and electronics.
Key workstreams of the collaboration include:
- REAlloys will complete metallurgical test work on rare earth materials from the Araxá Project including samples of rare earths oxalate produced from the Araxá mineralisation with a view to maximising recoveries of high-value magnet rare earths elements;
- REAlloys and St George will review the technology proposed to be used in the production of rare earths products at the Araxá Project, including the assessment of new technologies with leverage to REAlloys patented, industry leading technologies; and
- REAlloys and St George will review and optimise the processing flowsheet for production of rare earths products at the Araxá Project with the aim of producing a rare earths product most amenable to magnet making.
REAlloys and St George will also review and consider marketing strategies for rare earth products from Araxá with a view to REAlloys securing a long-term offtake contract for up to 40% of the rare earths production from the Araxá Project.
“We are extremely excited to enter into this strategic alliance with REAlloys, which greatly bolsters the development potential for the rare earths opportunity at our 100%-owned Araxá Project,” St George executive chairman John Prineas said.
“The recent rare earths supply chain intervention by the US Department of Defense through its multi-billion-dollar deal with NYSE-listed MP Materials illustrates the re-alignment of the global rare earths market status quo that is now underway – led by key players in the US.
“REAlloys is one of the leading suppliers of high-performance rare earths magnet materials to the US defence and industrial sectors, which means this strategic alliance creates an attractive pathway for St George to access the fast-growing and lucrative downstream sector of the US rare earths industry.
“In addition to providing a potential long-term supply option, the alliance will assist to commercialise Araxá’s large, high-grade rare earths inventory by leveraging REAlloys’ innovative technologies.
“The Araxá Project boasts a world-class, hard-rock rare earths resource that is the same style of deposit as the two major rare earths mines outside of China – the Mt Weld mine of Lynas Corporation and MP Materials’ Mountain Pass. Not surprisingly, St George is attracting strong interest from downstream players interested in the Araxá Project as they look for new sources of high-grade rare earths materials.
“In addition to the world-class Mineral Resource Estimate, the Araxá Project benefits from favourable project logistics that support an expedited pathway to potential development. Our project is well-positioned to be a potential supplier of rare earths product for ex-China supply chains being established in Brazil, the US and other countries.”
In parallel with advancing downstream, midstream and other pre-development opportunities such as this strategic alliance with REAlloys, St George is completing an extensive drill program at the Araxá Project comprising auger, reverse circulation (RC) and diamond drilling.
The purpose of the drill program is to upgrade the world-class MRE at the Araxá Project as well as target previously undrilled areas of project tenure.
Drilling has already discovered high-grade REE and niobium mineralisation just 1km east of the modelled MRE. In addition, the first batch of assays from RC drilling across the MRE has confirmed the substantial scale and continuity of the rare earths and niobium mineralisation and the strong potential for a major resource upgrade to the already world-class carbonatite-hosted TREO and niobium JORC-compliant MRE – currently modelled to only 100m from surface and with less than 10% of the tenure subject to close-spaced drilling.
