SGQ.ASXSPEC BUYMaterials
Price
$0.100
Target
$0.205
Upside
+105.0%
Mkt Cap
A$380M
FULL_NOTE13 December 2025
St George Mining Ltd
SGQ.ASX – New research report
Current
$0.100
+0.00% today
Target
$0.205
SPEC BUY Rating
Upside
+105.00%
To target
Mkt Cap
A$380M
SGQ.ASX
Investment Thesis
What matters most
- 1Araxá’s large, shallow saprolite JORC MRE with high NdPr content provides leveraged exposure to integrated niobium and magnet-REE markets if Inferred tonnes are upgraded and metallurgy proves scalable, supporting a low-strip open-pit development;
- 2The company’s strategy to de-risk through staged drilling, pilot‑plant work and Brazilian downstream collaborations (EMBRAPII/SENAI, MagBras) can materially increase project value by capturing upstream and downstream margins;
- 3A layered partnership model including Xinhai (binding EPCM+O framework), non‑binding offtake MoUs and a recent A$72.5m funding package reduces single‑point execution risk and preserves optionality for project financing;
- 4Value is concentrated in a single asset where a successful conversion to Indicated/Measured resources and bankable studies could unlock a step-change in NAV relative to current market capitalisation;
Key Catalysts
What can re-rate it
- Q1 2026 targeted Araxá MRE upgrade and initial economic study (scoping/PFS-style) that could re-rate the stock by converting Inferred tonnes to Indicated/Measured status;
- Rolling >10,000 m drill results and new high‑grade discoveries (including the ~1 km east REE zone) over 2026 that would expand the resource envelope and improve mine scheduling;
- Pilot‑plant results and integrated flowsheet outcomes from EMBRAPII/SENAI and downstream partners that demonstrate commercial recoveries and concentrate payabilities;
- Formalisation of funded offtake/prepayment agreements or project‑finance commitments supported by Xinhai’s fixed‑price EPC proposal that materially de‑risks construction capital and timing;
- Achievement of core Brazilian permitting milestones (Invest Minas conversion to operating licences) in 2026 that would reduce jurisdictional and schedule uncertainty;
Key Risks
What can break it
- Metallurgical or pilot‑scale processing underperformance that lowers recoveries, increases reagent/capex intensity and materially reduces project economics;
- Failure to convert a high proportion of Inferred resources into Indicated/Measured categories, which would weaken pit design, reserves and bankability;
- Inability to secure binding offtake prepayments, project finance or timely equity funding, forcing highly dilutive raisings or jeopardising deferred vendor payments;
- Permitting, community or environmental delays in Minas Gerais that push back licensing timelines and increase holding costs;
- Concentration of execution risk with single‑asset dependence and counterparty concentration (Xinhai/Eastern market exposure and Chinese demand concentration) that could amplify downside if partners withdraw or terms change;
01
Overview3 min read
Developments Since the FY2025 Annual Report
- A$72.5m funding package announced in Oct–Nov 2025 (A$50m institutional + A$22.5m strategic), materially improving near‑term funding for Araxá develo...
02
Overview5 min read
St George Mining — Snapshot and Positioning
- St George has transformed from a WA-focused explorer into a critical-minerals developer anchored by 100% of the Araxá niobium–rare-earths project in...
03
Investment Thesis9 min read
Investment Thesis and Recommendation Framework
- We see SGQ as a leveraged, high-risk way to gain exposure to a large, near-surface niobium–NdPr system at Araxá that already has a JORC MRE and acti...
04
Investment Thesis6 min read
Strategic Partners, Offtake and Development Framework
- St George has assembled a layered partner set at Araxá: Xinhai as EPCM+O and Chinese distributor, Fangda and SKI as potential cornerstone niobium cu...
05
Projects6 min read
Araxá Niobium‑REE Project — Resource, Geology and Exploration Upside
- Araxá hosts a maiden JORC 2012 saprolite resource of 41.2 Mt at 0.68% Nb2O5 and 40.64 Mt at 4.13% TREO, with ~96% of tonnage within 100 m of surface...
06
Projects10 min read
Araxá — Metallurgy, Flowsheet, ESG and Permitting Pathway
- Araxá metallurgy is being advanced through a structured bench-scale program with EMBRAPII/SENAI and planned pilot-plant restart, but recoveries, con...
07
Projects6 min read
WA Exploration Portfolio — Destiny, Mt Alexander, Lithium Star and Ajana
- St George’s WA portfolio is now a secondary, option-style asset base, focused on lithium, clay-hosted REE and base metals across Destiny, Mt Alexand...
08
Valuation4 min read
Valuation, Sensitivities and Peer Comparison
- Our valuation anchors on a single-asset SOTP where Araxá dominates, using an indicative DCF to translate resource scale into per-share outcomes whil...
09
Risks8 min read
Key Risks, ESG Considerations and Mitigants
- Araxá dominates group value, so geological, metallurgical and permitting outcomes there represent high‑probability, high‑impact risks that could swi...
10
Financials7 min read
Financial Position, Capital Structure and Funding Outlook
- St George exited FY2025 with A$2.8m cash, a FY2025 net loss of A$11.4m and had already raised A$25.5m during the year, leaving the business structur...
11
Other11 min read
Catalysts, Milestones and Scenario Timeline
- Key re‑rating events in the next 12 months are the Araxá MRE upgrade and economic study targeted for Q1 2026, underpinned by >10,000 m of drilling n...
12
Appendix7 min read
Appendix – Project, Technical and Data Reference Tables
- Araxá’s maiden JORC 2012 MRE totals 41.2 Mt at 0.68% Nb₂O₅ (0.2% cut-off) and 40.64 Mt at 4.13% TREO (2% cut-off), with 95.8% of tonnage within 100 ...