St George Mining Limited ($SGQ)

Ladies and gentlemen, we warmly welcome you to the Montega Markets Critical Resources Summit. This roundtable is dedicated to St. George Mining Limited. Please note that this call is being recorded, and you can watch the recording afterwards at airtime. I am pleased to welcome the Executive Chairman, John Prenas, who will guide you through the presentation and the insights shortly, after which we will move over to our Q&A session. And having said this, I'm handing over to you, John.

Thank you very much. Thank you very much to Airtime to make this opportunity for St. George to present its wonderful story to you. So I am the Executive Chairman of St. George Mining Limited. We have a fantastic critical metals project in Brazil. It's got high-grade niobium and high-grade rare earths. And I'll take you through a short presentation so you can get a better understanding of what we have. What you're seeing on the screen right now in that photo is called ferronobium. It is the main product of the niobium mining operation. So it's basically concentrated neobium with a bit of iron in there. That's why it's the ferro in the title. So this is 80% of neobium gets produced as ferroniobium. A quick company overview. We are an Australian company listed on the Australian Stock Exchange. Our ticket code is SGQ. We are also listed on the Frankfurt Stock Exchange. I'm sorry, I don't have that ticket code handy, but I'm sure you can find it easy enough. Our market capitalization at the moment is $510 million. We bought this project only about 12 months ago in February 2025. We paid USD 30 million for it. It has been a transformational transaction for us. We were about a $25 million company when we bought this asset. We've now gone to up to a $500 million market cap. We have a broad range of institutional investors now, large global funds. We did a raising for AUD 72.5 million in October, November this year. A number of funds came in from North America, from Europe, and also from England. And also the biggest shareholder came in at that point in time that was Hancock Prospecting. You've probably heard of Gina Rinehart, Australia's richest person. Also a fantastic track record in rare earths' investment. She and her company are the largest shareholder in MP Materials. That's the #1 rare earth mine in the U.S. and also the largest shareholder in Lynas rare earths, which is the other big rare earths producer outside of China. Also a big shareholder in Arafura, which has a number of offtake and funding arrangements with European countries, including German companies. So we've got Hancock Prospecting there as our largest shareholder, gives us a lot of validation that we can also one day become as big as those other companies that Hancock Prospecting is backed. We've got a lot of research now out on us from high-quality investment banks, Macquarie Bank, Canaccord and the Australian firms, Petra and Evolution, et cetera. So really investment grade for institutions now. The main strength of our company is our JORC resource. So JORC is just the technical standard that Australian resource estimates need to meet. We have a world-class resource. So we announced the upgrade to the resource in March this year. We have 70.9 million tonnes at 4.06% total rare earth oxide. That is very big. That is probably 60% bigger than Mountain Pass, which again is the biggest one in the U.S. It's double what Lynas was for most of its producing life. Only last year did they increase their tonnage to 106 million tonnes. In terms of grade, we're right up there with those 2 players as well. In Niobium, we've got 95 million tonnes of niobium oxide, again, high grade, very good quality stuff. Just to elaborate a little bit on our resource. We are a hard rock carbonatite hosted resource. So you may have heard of the ionic [indiscernible] deposits. They tend to be much, much bigger, but very, very low grade. They can be like 0.5% rare earth oxide, but could be billions of tonnes. They are good deposits. They have their challenges, obviously, because they're very, very big and need a lot of dirt to be moved to produce the same sort of output that we have to do. Nevertheless, they are quite valuable. You probably saw the breaking news in the past 24 hours that a U.S. company, U.S. rare earths is paying USD 2.8 billion to buy Cerro Verde, which is a producing ionic clay deposit in Brazil. So very exciting time for M&A as well in the rare earth space, a very exciting time for us with this world-class resource that is emerging as hopefully the next producer in both rare earths and niobium. It is the largest carbonatite-hosted rare earth deposit in South America. So that puts us in a really privileged position. And again, it's the same style deposit as Mountain Pass and as Lynas' Mount Weld deposit, the 2 biggest producers outside of China. We are located in a town called Araxa. It's in the state of Minas Gerais, Brazil. This is a very, very good location. Minas Gerais is a mining jurisdiction, very, very pro-business. But above that, we are in an extremely good mining district for developing projects. So what you see in that image is an earth image. It is the Barreiro carbonatite. Carbonatites are typically a circular feature. Our tenements, our licenses are the red outline in the north. In the eastern side is CBMM. They are the world's biggest niobium producer. They have been making the avium there for 40-plus years. On the other side, the western side is Mosaic. They've been mining phosphate there in one form or another. It was Mosaic, previously, it was Vale, but that has been a phosphate mine for more than 40 years. So this is an established mining region. That highlights 2 very important points. One, there's already a lot of infrastructure in place here. We don't have to build roads, railways, power lines. They're already there. We can easily leverage off that existing infrastructure. That significantly reduces our CapEx. The other big point of the fact that there's established mining here is that the environmental impact is very well understood. We're not trying to build a mine in an area where there's never been a mine before, virgin territory. We're not in the middle of the Amazon jungle or something like that. This is a mining area, very experienced in mining. Araxa City itself is 5 kilometers away. They live off the mining industry. There's 110,000 people there, many of which want jobs. So a very good opportunity for us to fast track into production because we already have a favorable project logistics to do that. The fact that CBMM has been there from doing this for 40 years is very, very important as well. It means that we can just follow their playbook basically for the niobium production, and that's exactly what we're going to do. We've actually employed a number of former CBMM staff. So people who used to run their business for them, people that are in charge of the whole mining operation, the engineer that built their plant, the engineer that looked after their mineral processing, they all work for us now. So we do have a team, very experienced in the region, very experienced in niobium to take our project into development and into production. Apart from the favorable project logistics, we have favorable deposit characteristics. So you might hear people telling you they've got x number of million tonnes at a certain percentage. That's great, but you really need to understand where that deposit is located. Is it at surface? Is it 500 meters below surface? The good news is that our deposit starts from surface. That is a huge advantage. It means we can have an open pit mine. At the moment, our resource is modeled to 120 meters from surface. So it's really from surface down to 120 meters. That's just a classic open pit, low-cost mine. The rocks have been weathered by thousands of years of rain. So even though it's a hard rock deposit, it's actually soft clay in the top 120 meters. So there's no blasting required. There's not a lot of crushing required in the processing. So that means very, very cheap to mine, very, very cheap to process. So very favorable deposit characteristics. You can see from that 3D model in those graphics that it's open. So the mineralization has not been drilled out. It's open in all directions, north, south, east, west and also at depth. We know our neighbors, CBMM have drilled down to 800 meters and are still hitting high-grade mineralization. We've drilled down to about 200 meters and are still seeing high-grade mineralization. There's really no need to drill much deeper. There's about 50 years mine life in the top 100 meters as it is. So it's just for curiosity value that we might do a few deeper holes. The current resource is enough for a very, very long mine life. Niobium is a very specialist metal. It's an alloy used to produce stronger, lighter steel basically. So most of it is used to make ferroniobium, that photo on that cover page that I showed you. And then it's further processed into something called niobium oxide, which is a white powder form of the niobium. Ferroniobium is used to make stronger, lighter steel, construction steel, pipelines and also very, very topical, unfortunately, it's used in military equipment. Pretty much all military equipment has some component of niobium. It makes the steel harder, more corrosion resistant, higher temperature tolerant. So very, very important for military equipment, very important for rockets, very important for aerospace, fighter aircraft, et cetera. Niobium oxide is used more for high-tech applications. It's us more for MRI equipment and other sort of high-tech equipment as well. Also used for batteries, they're testing lithium-ion batteries with niobium in there now. So and Toshiba are doing that with CBMM, all the CBMM vehicles at site run on these batteries. It hasn't quite got to the commercial level yet, but it's a huge opportunity for growth in the sector. At the moment, the market is growing by about 6% per year, and there are only 3 players in the market. This is why we love niobium. There's great supply concentration. CBMM, our neighbors in Brazil, produce about 80% of the world supply. China Moly, now known as CMO, produces about 11% also from Brazil. And then Niobec in Canada produces about 9% China Moly and Niobec, their mines are starting to go underground. So they're starting a little bit expensive, a little bit more difficult to mine. CBMM has got about 400 years left on its mine, so they're not in trouble. But there is supply concentration. There really is no other near-term producer coming on to the scene other than St. George. And the reason why we're so confident is because, again, we're right next door to CBMM. We have the same mineralization. We have the team that made that project work for them. We can do it for ourselves as well. So a very, very good opportunity for us to hopefully become the second biggest niobium producer in the world once we're in production in 2028. Niobium is the second most important critical metal for the U.S. If the U.S. was denied supply to niobium, it would have the second biggest impact -- negative impact on its GDP. That's what that bubble chart shows you there. So the U.S. is very, very keen to secure supply, reliable non-Chinese aligned supply of niobium. Now going back to those major players, CBMM has sold off a 15% stake in the company to the Chinese, a consortium of Chinese steel mills and CITIC and also sells about 50% of its product to China. China Moly itself, of course, is Chinese. So there is a concern that too much of the market is influenced by China, and that's giving us a lot of attention in Washington at the moment. In the rare earth space, it's probably a bit easier to understand the market because there's a lot more listed companies. This table really compares St. George to those other 2 main producers outside of China, Lynas and MP Materials and also Arafura, which has a project in Australia. It's in the development phase. It's been very well supported by Australian government, U.S. government, and as I mentioned, European offtakers and also funding agencies like KfW. So if you have a look at the resource, our resource is 70.91 million tonnes of total rare earth oxide, bigger than Mountain Pass, bigger than Arafura. If you have a look at our grade, Mountain Pass is still the highest grade, but we're right up there with Lynas, much higher than Arafura. If you have a look at our NdPr grade, that's the second last column there. We have 0.77%. We're only beaten by MP Materials. We're better than the other 2. And in terms of the contained NdPr, we have -- sorry, 550,000 tonnes, which again is bigger than Mountain Pass, bigger than Arafura and almost as big as Lynas. So already on the world scale in terms of our rare earths. If you have a look at that bubble chart, we are the reddish brown dot right up there with Mount Weld. Mountain Pass is a little bit higher purely because of its higher grade. But in terms of tonnage, we're actually bigger than those guys as well. So again, right up there with the world-class producers. Our market cap is only AUD 500 million, AUD 600 million. Lynas and Mountain Pass up at anywhere between USD 10 billion and USD 15 billion. So we've got a lot of catching up to do, but we're embarking on the development pathway now. We'll be having metallurgical test results out soon, scoping study, feasibility study as we continue to show that we can produce a commercial product, we should be able to catch up to the valuation of those other players. And as I mentioned earlier, there's already M&A activity. Cerro Verde in Brazil being taken over by U.S. rare earths for $2.8 billion. The U.S., quite frankly, is progressing its technology to produce rare earths very strongly, but it does not have a lot of rare earth feedstock. Mountain Pass is really the only good mine that they have. A lot of the other mines are not so good. U.S. rare earths does have a mine called the Round top. I think you can read into the fact that they've gone to buy Cerro Verde that is not highly regarded as a near-term producer. So it will be a very interesting time over the next couple of years as the world market consolidates and gets shaken out. We have a number of development initiatives underway. So we've got 2 mining concessions. They're in application now to get a full mining license. That should work its way through this year. So we should have some good announcements during the course of the year in terms of our licensing, our environmental license and mining license. We've got very good relationships with government. So we expect that to go fairly smoothly. We're continuing our drill program. So we've already delivered that big upgrade in the resource in March. We're continuing to drill. We should have a further upgrade to the resource by the middle of the year. We have a pilot plant that we're putting together. The previous owner did run a pilot plant study on their smaller resource. It did produce a commercial rare earth product, 99% purity, 86% recovery, about 20% NdPr. So a very good product they managed to produce. We have got that pilot plant, but we're modernizing it. We're going to try some different flow sheets now using less sulfuric acid. So that should be up and running by the middle of this year. We should have some sample products produced in the second half of the year from our pilot plant. We're continuing to talk to some strategic investors. We already have a a strategic alliance with REalloys, which is a mine to magnet company in rare earths in the U.S. They recently listed on the NASDAQ. They already have contracts with U.S. government agencies for magnet-making materials. They only have their own small deposit of rare earths, 3 million tonnes. So they're really quite excited to have a partner like us where they can have a much bigger supply of rare earths to put through their technology through their refining capability to split rare earths and refine and make metals. We're also talking to others, including in Europe. We did a strategic alliance with a major engineering firm in Europe, Technic Reindus, Spanish engineering firm who also happens to be the leader of the permanent project, which is a European Commission funded project to make magnets in Europe. So very good news coming, I think, in the next few months on our offtake partners and downstream partners. Our development studies have started. If all goes well, we'll have our first scoping study by July this year. That will be on the nibium side. Niobium is a little bit easier than the rare earths. The niobium, as I said before, has been produced in this region for more than 40 years. So it's pretty easy for us to put together a scoping study and feasibility study. The rare earth study will follow after that. I think the numbers that, that project study will show will be very, very impressive. I don't want to preempt them telling you the numbers now, but it's a hugely profitable business in the Niobium business. Not surprising given there's only 3 primary producers, and it's pretty much a monopoly or oligopoly cartel that's operating there. We have a fantastic team now in Brazil. So we are an Australian company new to Brazil, but we moved quite quickly, as I said, to put in place some local engineers that can build our project, develop the project. Thiago Amaral, more than 17 years of experience with the CBMM doing licensing and product development. Adriano Rios was the engineer basically in charge of the whole mining operation, mine planning, mineral processing. So he's basically doing the same function for us. Carlos Araujo who built the CBMM plant. So he's already designing our own plant and costing it for about $70 million to $80 million and Ricardo Nardi is the world's leading expert on this kind of mineral processing. So we've got a really top flight team to take our project further. We're also starting to fill up the middle management levels. We have about 65 employees and contracts in Araxa at the moment. So a big team forging ahead with the project development. We have 2 Brazilians in our head office in Perth, Caue Paul Araujo. He's a former General Manager at SRK Consulting, also in other advisory firms. So he's given a real corporate bench to our geology understanding. And Wanderly Basso is our core geology manager. He's taking care of all the resource modeling and drilling. We've added a couple of high-profile advisers to our Board. Adolfo Sachsida was the former Minister of Mines in Brazil. And before that, he had a long career in the Ministry for the economy. So he has given us a lot of good contacts in the Brazilian economy and regulatory space. We've also added Marina Spinola. She's one of the Executive Directors at the Dom Cabral Foundation, which is Brazil's #1 MBA-type university. Her particular expertise is sustainability, social engagement, et cetera, which is very important for us as we start that development phase and need to engage with those various stakeholders. As I said, we have already produced a rare earth product from our material. That is a quick breakdown of the -- sorry, the rare earth components. So lanthanum, cerium, NdPr, about 20%; samarium, gandolinium, dysprosium, atrium, all there, very high purity, about 99%. So we know we can produce the rare earth product. We're trying to make it even better in the modern technology now. We're also participating in the MagBras project. That is a public-private initiative in Brazil to make magnets in Brazil. So Brazil is a big country. They want to make their own magnets for their car industry, their plane industry. We were the first company to provide the rare earth product for them to do met testing. And the other company noted there is REalloys. They're the strategic alliance we've now got in the States, very keen to sign an offtake agreement with us. The pilot plant, as I mentioned, we've taken over the old plant. We're going to put it inside the local university. So the local technical university set it. We're going to donate that plant to the university. They're giving us space and support to do that and tax breaks. So we'll be running that pilot plant for our own purposes in the first couple of years and then handing it over to the university for their studies and work purposes. So we're getting a lot of goodwill from the community for doing that. We're also sponsoring a lot of other community projects and getting a lot of community support. We met with the local council. That's a picture of my directors and my meeting with the local council. They all want jobs and prosperity for the region. They all want this mine to go ahead. And the picture at the bottom is the Governor of Minas Gerais. He actually just resigned as Governor because he wants to run as President next year. But Governor Zema came and spoke at open day that we had in Araxa, telling everyone that St. George is doing a great job in developing the next generation of mining of sustainable mining, environmental-friendly mining. And he's also very keen to see the project get up and running. He's from Araxa town itself. So he's very supportive of another mine to be developed there. And that's basically the presentation. I'm happy to go back and answer any questions and go a bit deeper into anything that you want to hear about.

Thank you very much for your insights, John. [Operator Instructions] The first one, who would be offtaking the rare earth niobium that you mine? Are you more focused on the domestic Brazilian market or the EG EU market?

Yes. Good question. Our resource is big enough to be able to deliver into a number of markets. So the first market we want to deliver to is in Brazil. As I said, we're participating in the MagBras project. Brazil wants to produce rare earth magnets for domestic industry. There's a couple of other emerging producers as well in Brazil. So I think there'll be plenty there for Brazil. We have a strategic alliance as well with the U.S. REalloys, and we're also trying to forge an alliance in Europe as well. So I think we probably end up with 3 or 4 markets that we can deliver into.

Thank you. Defense demand has been a huge macro driver for REE and defense metals in the last 2 years. How do you see this in terms of interest in new projects?

Yes, huge, huge, both rare earths and niobium in particular. So there are a couple of other rare earth players coming on into production. They may take a little bit longer than us. We have a good project, as I said, in terms of project logistics. So we are seeing a lot of interest from players in Europe and in the U.S. for our rare earths, but we're probably seeing even stronger interest for niobium because it is even more of a weapon metal than the rare earths. It is absolutely essential for defense equipment. And we're seeing particularly strong interest from the U.S. They do not have any domestic production of niobium and they need it.

I've seen that you achieved quite impressive trading volumes at Tradegate in Germany. The development since inclusion is very good. What are your further capital market plans here in the DACH region? Do you plan on deepening your capital market presence here via participation in physical conferences, raising funds, et cetera?

Yes, absolutely. The European market, I think, understands the rare earths in particular. We've actually just completed a couple of conferences in Germany. I wasn't able to attend, but Cape [indiscernible] attended conferences in, I believe it was Stuttgart and Hamburg. And we do have a number of major shareholders now in Germany. So we will travel there more frequently. We have some major funds out of Switzerland, Zurich, who invested in our last capital raising. So we do see the European market as a real opportunity for us to expand.

Thank you very much. And the last question for now. You mentioned that licensing progresses in 2026. Can you give us more specific time line for when you expect to receive these 2 mining concessions licenses?

Yes, sure. So basically, the mining licenses come in 3 stages. The first hurdle you need to get through is your environmental license. We hope to have that in third quarter of this year. You then get your preliminary license, which is basically when you tell the mining authority the style of plant you're going to have. We hope to have that through the middle of next year, and then you get your full operating license when you've built the plant. So we hope to be in full production with all the mining licenses approved by halfway through 2028.

Thank you very much. And in the meantime, we have received no further questions. We, therefore, come to the end of today's roundtable. Thank you for your interest in St. George Mining Limited. If you have any further questions later on, please feel free to contact Investor Relations. A big thank you also to you, John, for your presentation and your time. And with that, I'm handing over again for John for some final remarks.

Thank you very much everyone. Thank you for your time today. Do keep watching us. We're going through that tremendous growth phase where we have lots of news flow, lots of re-rating events and hopefully, lots of share price increases. So stay tuned. I think you'll be impressed with our news flow and events over the next few months.