St George Mining forms ‘strategic alliance’ with US Government magnet supplier for Araxa rare earths project

WA junior explorer St George Mining will advance its Araxa rare earths project in Brazil through a “strategic alliance” with a US Government magnets supplier. St George told the Australian Securities Exchange on Wednesday it had signed a memorandum of understanding with REAlloys. a downstream magnet material, critical metals and alloys manufacturing company based in the US State of Ohio. St George said the strategic alliance would aim to commercialise the high-grade rare earths at Araxa in the Brazilian State of Minas Gerais. “REAlloys is a leader in the US magnet supply chain with US Government contracts,” St George said. “REAlloys produces high-performance neodymium iron boron and samarium cobalt magnet materials for US Government 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.” St George said key workstreams of the collaboration included REAlloys completing metallurgical test work on samples of rare earths oxalate produced from the Araxa mineralisation, with a view to maximising recoveries of high-value magnet rare earths elements. REAlloys and St George would review the technology proposed to be used in the production of rare earths products at Araxa, including the assessment of new technologies with leverage to REAlloys patented, industry-leading technologies. The companies would also review and optimise the processing flowsheet for production of rare earths products at Araxa, with the aim of producing a rare earths product most amenable to magnet making. And they would consider marketing strategies for rare earth products from Araxa, with a view to REAlloys securing a long-term offtake contract for up to 40 per cent of the project’s rare earths production. St George executive chairman John Prineas said the strategic alliance greatly bolstered the development potential for the rare earths opportunity at Araxa. “The recent rare earths supply chain intervention by the US Department of Defence through its multibillion-dollar deal with NYSE-listed MP Materials illustrates the realignment of the global rare earths market status quo that is now under way — led by key players in the US,” he said. “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 Araxa’s large, high-grade rare earths inventory by leveraging REAlloys’ innovative technologies. “The Araxa 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 Araxa project as they look for new sources of high-grade rare earths materials. “In addition to the world-class mineral resource estimate, the Araxa 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.” Araxa’s current rare earths mineral resource is 40.6 million tonnes at 4.13 per cent total rare earths oxide, which Ste George describes as “the largest and highest-grade carbonatite-hosted rare earth element deposit in South America and second highest-grade REE deposit globally in the Western world”. St George said it was currently completing extensive drill program comprising auger, reverse circulation and diamond drilling to update the mineral resource estimates for both rare earths and niobium. Araxa’s niobium MRE sits at 41.2Mt at 0.68 per cent niobium pentoxide.