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St. George Acquires Brazil-based Araxa Niobium-Rare Earths Project
The project is located in Minas Gerais, Brazil, and is adjacent to CBMM's flagship niobium mine, which produces 80 percent of the world's niobium.
St. George Mining (ASX:SGQ) revealed plans to acquire the Araxa niobium-rare earths project in Brazil by entering into a binding conditional agreement to purchase a subsidiary of Itafos (TSXV:IFOS,OTC Pink:MBCF).
Under the agreement, which was announced on Tuesday (August 6), St. George will pay Itafos US$10 million in cash once the transaction closes and will issue Itafos ordinary shares representing a 10 percent stake.
This will be followed by deferred cash payments to Itafos of US$6 million nine months after closing, and US$5 million 18 months after closing. St. George will also issue various options to Itafos as part of the deal.
"Extensive high-grade niobium mineralisation has already been discovered at the project,” said John Prineas, executive chairman at St. George. Historical drilling has defined more than 500 intercepts of niobium grades above 1 percent, “providing a strong foundation for St George to quickly progress to potential resource definition.”
High-grade rare earths and phosphate mineralisation has also been confirmed by drilling over a widespread area.
According to St. George, Araxa's strength is in its location, a strong mining jurisdiction with potential access to infrastructure and labour. It sits adjacent to CBMM’s flagship niobium mine, which produces about 80 percent of the world’s niobium. A phosphate mine owned by Mosaic (NYSE:MOS) is situated to the southwest of Araxa.
Available within the property or in close proximity are sealed roads to the project and major destinations, as well as grid power, water and telecommunications. Accommodations and offices are available in the town of Araxa, while a skilled workforce is available locally from Araxa or from Belo Horizonte.
Records show historical exploration at the Araxa site has occurred since 1965. The last exploration ranged from 2011 to 2012, when Itafos completed preliminary metallurgical testwork and resource estimates.
St. George has received firm commitments for a capital raising amounting to AU$21.25 million. This will be done via the issue of 850 million ordinary shares of the company to institutional investors at an issue price of AU$0.025 each.
The funds will be used for St. George’s inaugural drill program at Araxa and for working capital, including costs related to the acquisition. The transaction is expected to close between September and early October, subject to the completion of certain conditions by November 3.
Don’t forget to follow us @INN_Australia for real-time news updates!
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
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Gabbie graduated with a journalism degree from Colegio de San Juan de Letran - Manila and has produced articles on a variety of topics, such as infrastructure, business and technology. Her creative portfolio includes written work on architecture, art and design. Gabbie covers the Australian market for the Investing News Network, focusing on the mining sector.
When not in front of her desk, she is out scanning through vinyl records, exploring the international coffee culture and fighting for queer rights.
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Gabbie graduated with a journalism degree from Colegio de San Juan de Letran - Manila and has produced articles on a variety of topics, such as infrastructure, business and technology. Her creative portfolio includes written work on architecture, art and design. Gabbie covers the Australian market for the Investing News Network, focusing on the mining sector.
When not in front of her desk, she is out scanning through vinyl records, exploring the international coffee culture and fighting for queer rights.
Learn about our editorial policies.