St George Mining’s push to further de-risk its desired Araxá niobium-rare earth elements project in Brazil has received another boost.
The John Prineas-chaired junior told the market on Wednesday it had signed a strategic non-binding memorandum of understanding with China-based Liaoning Fangda Group – through its wholly owned subsidiary Beijing Fangda Carbon-Tech Company.
Presently increasing its steel production output from 20 million tonnes to 50 million tonnes per year, the group – part of a multi-faceted conglomerate – is eying off potentially becoming one of the top five producers of steel globally.
Under the MOU, St George said it would consider a raft of offtake and financing opportunities with Fangda – all with the aim of ensuring Araxá, located in the Brazilian state of Minas Gerais, eventually reaches a positive financial investment decision.
Both entities will also look to potentially establish a binding agreement by October, nine months on from the initial MOU.
St George, which has no financial commitments under the MOU and can potentially enter into other transactions surrounding Araxá, tabled a series of potential terms to a prospective offtake deal with Fangda – including it having exclusive access for 20 per cent of niobium from the project.
“St George’s ability to attract global giants like Fangda speaks volumes to the potential of the Araxá project and also recognises the high-performance in-country management established by St George to drive project development,” Mr Prineas said.
Earlier this month, the junior announced plans to tap investors for $20 million, subject to shareholder approval next month.
It also secured MOU's with Brazilian state-based scientific agencies – EBRAPHII and SENAI.
The company’s deadline to acquire Araxá has been extended until March 15, after the initial conditional agreement has been signed on August 3 last year.
St George closed trade up 13 per cent to 2.6 cents.
