St George Mining Limited ($SGQ)

Good morning. Thank you for joining us. We have a presentation here today from St. George Mining and discussing the update for the flagship Araxa, niobium and rare earths project in Brazil is Executive Chairman, Mr. John Prineas. I'm going to hand it over to John to walk you through the presentation and for the insights and milestones ahead for this company in the year. Over to you, John.

Thank you very much, Peter, and thank you, everyone, for tuning in. You probably also saw that we've got our quarterly activities report out today. That reminded me that we've actually achieved quite a lot this month, quite a few important milestones. So we thought it would be a good opportunity to also do a webinar and take investors and shareholders through these achievements and how we're positioned for further growth over the next 12 months. So I'll just go through this presentation, which will help explain the achievements. This is just a quick corporate snapshot. Really, the 2 key points here are we are now institutional investment-grade company. We started off in 2025 as just a junior mining company. We are investment-grade institutions. We completed a $72.5 million institutional placement last year with a number of North American, Australian and European institutions. And of course, Hancock Prospecting came in as our largest shareholder with a 6.2% stake. They've got a great track record in rare earths investment, of course, being the largest shareholder in Mountain Pass, MP Materials and Lynas. We were admitted to the All Ordinaries Index on March 23 this year. So a great corporate achievement for us. Next step, hopefully, is the ASX 300. That gets reviewed in September. Hopefully, we're on track to getting there. Let's just wait and see. That will be, of course, a huge momentous achievement for us. We do have coverage from a number of major investment firms now, Macquarie Bank, Canaccord, Petra Capital and several others. So we're getting a really good coverage across different investment platforms from very big institutions to high net worth, et cetera. And the reason why everyone is excited, of course, is our world-class JORC resource. We did a resource upgrade in March this year. So we had about 40 million tonnes as most people remember, huge jump up to 70.91 million tonnes at 4.06% TREO. So a big jump in the total rare earth oxide resource. If you model that resource with the niobium cutoff, you then get an even bigger resource for niobium, 95.47 million tonnes. So these are world-class resources. The measured indicated component has also gone up quite a lot. It's up to about 30 million tonnes there, you can see, 29.49 million. And that's almost the same as Mountain Pass and Lynas. They've got about 32 million to 35 million tonnes. We're still drilling. So there still is scope to increase this resource, certainly scope to convert a lot of that inferred to measured indicated and that's what we're focusing on mostly at the moment. That's what's going to underpin our development studies, give strength to our economic calculations. So already, we're the largest carbonatite hosted hard rock rare earth deposit in South America, distinguish us from the ionic clays. They can be great projects as well, but we're hard rock rare earths, just like Lynas is Mount Weld, just like Mountain Pass. So they're the 2 biggest rare earths projects producing outside of China, and we have very similar mineralization to those guys. So where does that resource upgrade position us in the global stage? Well, we do think we're now emerging as a Tier 1 player. So that bubble chart says it all. If you see that bubble chart, where only 3 companies up there in the rarefied area of high grade and large volume, and that's Mount Weld, Mountain Pass and ourselves. We will get bigger. The drilling is continuing, as I said, we're continuing to report amazing results. So we're going to get even more dominant up there with the 2 world players. You can see in that table, which we've shown many times before, how comparable our resource to these other players, including Arafura, which has got a development project here in Australia. All these guys are multiples of our current valuation, and it shows you how undervalued we are and how much scope there is for an increase in our share price and valuation as we continue to deliver development milestones, metallurgical test results, economic studies, feasibility studies that will be coming this year. So there's no reason why we shouldn't start catching up with those multibillion-dollar valuations that our peers have. Our resource is as good as this, if not better, and I'll tell you why in a second. And you can see from that very last row, the contained NdPr. We've got more than Mountain Pass. We've got more than Arafura. We're nearly as much as Lynas and probably we'll catch them sometime this year. So we're very, very dominant in terms of the global stage. One of the reasons why our deposit is so good is our favorable location. So it's all very good to have a big resource, but can you commercialize it? And the answer in our case is yes, we can. And not only can we commercialize it, but we're going to fast track to development. So we're way past the early-stage exploration stage. We've got a world-class resource in a high-class Tier 1 mining jurisdiction, Minas Gerais. The government there is very supportive. We announced earlier this year that they've given us an exemption from state goods tax that saves us up to 18% of equipment that we have to import for the pilot plant and also for the industrial scale facility. So that's a great support and great saving for us. You can see from that earth image that we've got 2 big mines operating right next door to us. CBMM, of course, with their world-class mine on the eastern side and Mosaic with their phosphate mine on the western side. So there's been a 50-year history of mining in this area. That means, one, there's already infrastructure in place, roads, railway, hydroelectricity power, low cost that we can now just dovetail into. We don't have to spend several billion dollars building infrastructure. That's a real point of difference between us and other companies emerging as producers. And the other key point is the environmental impact here is well known and well accepted. These other guys, again, have been operating for 50 years. So the environmental impact is well accepted by Araxa City, which is only 5 kilometers away. They love mining. They live off mining. They're very keen to see our project up and running as well to create jobs. You can see on the western side an outline of our potential future industrial area. So this is where we acquired land this quarter. So we announced that earlier this year, 166 hectares we've acquired there. It was farmland, but zoned for industrial use as well. So it's already been cleared, very easy to put our industrial facilities there, build our plant. So we're continuing to work on that, on the design of that. At the same time, there are a number of other plants in the region, flotation plants. And again, niobium is produced through a simple flotation process, very similar to what is used in phosphate, flotation, copper, nickel, et cetera. So there are a number of these plants in the region, which we might be able to get access to very, very quickly, and that could super fast track our pathway to production. So we're having some confidential discussions with a number of parties. And some of you might be aware that our next door neighbors, Mosaic, have actually put their phosphate operation on care and maintenance and have announced that they're looking to divest that asset. So I can't say any more about that, but that's public information, and we'll see how we go with our discussions with the regional players. The other main advantage we have in point of difference is our favorable deposit characteristics. Mineralization starts from surface. So again, it's great to have a big resource, but unless it's easy to access, cheap to mine, you might have trouble actually getting to production. So we're not 500 meters below surface. We're not 50 meters below surface. We start from surface, high grades start from surface. It's free digging mineralization, which means no blasting required. We just get the excavator and start digging it up. That's a huge saving in CapEx, huge saving in time to production. We are already seeing more deep thick intercepts. Just April 7, we announced our thickest best intercept in Araxa, 178 meters, 4.34% TREO, 0.75% niobium. So this is quite the envious kind of intersection for other companies. This is unparalleled. So we're really blessed with fantastic deposit, which we can get into production very quickly. We are working on a number of development initiatives. The first thing I want to emphasize is that we've already produced a rare earth product at Araxa. That was actually done with the previous owner, a 9-month impurity rare earth oxalate with 86% recoveries, about 20% NdPr and also good values of Samarium, Gadolinium, Dysprosium and Yttrium. So we know we can produce a rare earth product. We're working now with a number of other parties to get a modern flow sheet to do that. So we do have a work stream going with MagBras. They are the public-private partnership in Brazil to make domestic production of magnets. We were the first company to [ bide ] them with a rare earth product for test work. So hopefully, we'll be delivering into the Brazilian supply chain soon. We have a U.S. strategic alliance with REalloys. They just recently listed on NASDAQ, and they already have commercial contracts with the U.S. government to supply magnet-making materials. They want to scale up their operation and looking for a big offtake contract. They potentially want 40% of our rare earth offtake. We're continuing to talk to them. And Washington, D.C. is also very keen to see us entering into that offtake and having discussions through Washington as well. Tecnicas Reunidas is one of the leading European engineering firms with really good proprietary technology in rare earth separation. We've signed a collaboration agreement with those guys. We'll be testing their RARETECH technology on our rare earths. Their credentials are really demonstrated by the fact that they've been appointed a lean manager for the permanent project. That's the European Commission funded rare earths project to establish rare earth magnet making facilities in Europe. So great opportunity to enter the European market through those guys. And on niobium processing opportunities with Boston Metal. These guys have come up through MIT in Boston with an innovative way for metal processing, low carbon or zero carbon processing. The CEO of that outfit is the former CEO of CBMM, the world leader in the niobium. So he's got a very deep experience in the niobium manufacturing, giving us a lot of insights as to how we can progress on the niobium side of the business. So all these partnerships will build our development studies and flow sheets for production. Just having mentioned the niobium, I'll quickly dovetail into the niobium market. The reason why we love it is because of the supply concentration. There's only 3 primary producers in the world, CBMM producing about 80%; Niobec about 9% in Canada and China Moly CMOC operation in Brazil, about 11%. So there's a great opportunity to come into this market and enjoy this effective monopoly, oligopoly type situation. There's a huge surge in the demand for the niobium. It is used to strengthen steel to create resistance to temperature. It's used very much in weapons. So unfortunately, given what's happening in the world today, there's a lot of replenishment of weapons going on, and we're seeing a lot of demand for niobium for that purpose. U.S. already rates as the second most important critical metal because if it was denied, production would have the second biggest impact on U.S. GDP. So U.S., again, is very interested. We participated in the Brazil U.S. Critical Minerals Forum in March. We got a lot of very good attention from U.S. government representatives. And again, we're continuing with that. We'll be in Washington in the middle of May to have further discussions with people there. And we're also sponsoring an aerospace and defense conference that's on the 18th and 19th of May. If anyone wants to come to Washington and join us at the conference, you're welcome. Drop me a line, and I'll tell you about it. We've already put in place a great in-country team. You've seen this slide before, so I won't harbor on it, but great experience from our next neighbor, CBMM. We've hired a number of their very, very senior people, people that are in charge of the whole mining operation, the whole business, the whole licensing. They've given us that expertise to take this project into production and make it a really globally significant business. The one recent announcement we made in terms of adding to the team was our resource geologist in Araxa, Ms. Carla Grasso. She's a resource geologist, very experienced. So her focus will be on modeling the mine plan, the resource for the mine plan, modeling the reserves. That's exactly what we want to do going forward as we develop our mine plan and development studies. So just summarizing our development initiatives. We've got the licensing process underway, 2 mining concession applications and 1 exploration permit. We should be getting our exploration license -- sorry, our environmental license in the second half of this year. That's the first step in the licensing process. We then should be getting our preliminary license by the middle of next year, give us the authority to go and build the project and then get our operating license in 2028. That's the plan. And that could change if we get access to one of these other regional plants that would change the time line a little bit, fast track the production profile. We're continuing to drill out there. We've already got about 15,000 meters of drilling. We originally started with about a 10,000-meter target, gone well above that. Still diamond drilling in the main deposit and RC drilling at the East Araxa discovery, 1 kilometer east. That is emerging as a very, very strong rare earths deposit, and we'll have some further news on that soon. So expect a further increase in the mineral resource estimate, expect a bigger conversion of the inferred to the measured indicated and even more competitive with Mountain Pass and Lynas. Metallurgical test work is underway, as I mentioned on the previous slide with the development downstream initiatives. So we'll have news on that over the coming months. Hopefully, next month, we'll have our niobium flow sheet finalized. The pilot plant, we've got this agreement with the CEFET Technical University to rebuild our pilot plant there. That's given us some concessions in order to do that. That should be up and running by Q3, probably Q4 this year. So that will produce ample products and it's also bringing us a lot of good grounding points with the community, the fact that we're building the pilot plant in the local university and going to leave it there once we finish using it. Our discussions continuing with multiple strategic partners. I mentioned some of those earlier. There are other early-stage discussions going on as well. Those I can't mention just yet, but very meaningful discussions, particularly with the U.S. counterparties. Economic study is underway. We should have our first study out by June, July. That should be on a niobium economic study and the rare earth study to follow after that. So again, very important milestone achievements to come to back up the achievements that we've delivered in this first quarter. So that's pretty much the presentation. Happy to answer any questions. If we're unable to take questions now, I'm quite happy to have people send their e-mails to me, [email protected], and I'll be very happy to answer any queries you have. Peter, do we have time to take any questions or not?

We do have just a couple here, John, and as you said, it's probably best to e-mail you. First one, can you comment on the dysprosium, terbium content of the rare earths material?

Yes, absolutely. So in the main deposit, we are seeing some meaningful elements of dysprosium, not so much terbium. But in East Araxa, we're actually seeing elevated levels of the heavy rare earths. So stay tuned. When we get that resource out, I think you'll see some very important levels of both dysprosium and terbium.

Probably on everyone's lips. John, the resource is already globally significant. So from here, what do you see as the key catalysts most likely to unlock the next major rerating of the project and the value of the company for shareholders? Would it be metallurgy economics, downstream partnerships or strategic development initiatives?

Yes. Basically all of the above. And we are working on all of those. So they all will come. I'm very confident in the next quarter or Q4 this year. You're absolutely right. We do have a world-class resource. We want to get it a little bit higher. We want to convert a little bit more of that inferred to measured and indicated. We want to leave no doubt that our resource is as good or better than those other 2 component players. But again, we need to show that we can commercialize this deposit. That work stream is underway. We will get met results out. We will get economic studies out, which just shows you how profitable this business can be, again, emphasizing that our mineralization starts from surface. It's high grade. So the operating costs are going to be very, very low. All that's coming, and that will be a major catalyst for rerating.

John, the fresh oxide material, easy dig, that's a bit of a dream for a project of this sort of scale. How long do you think -- or what's your view of the time frame for development of a project of this scale in terms of -- there's obviously going to be a lot of permitting and approval process to get through as well.

Yes, absolutely. So although we've got the largest rare earth resource in South America and hopefully in the world very soon, it doesn't mean we're going to mine all of it straight away. So you might see when we get our economic study out a starter pit. You certainly don't have to create a big pit from day 1. So it's going to be a staged development. Still going to be a very globally significant production, 10,000 to 15,000 tonnes of MRE product, so matching some of the biggest producers in the world and up to 10,000 tonnes in the niobium. So it's still going to be something that has enormous production, enormous profitability. The environmental licensing is underway. Again, we're in an area where there's already been a lot of mining. So the environmental approvals, we don't think will hold us up very much. They should go through fairly smoothly. And yes, everyone is keen to get this project up and running. The local town, Araxa, the governor, Governor [ Azima ] has just retired because he wants to run the President, but he's from Araxa town itself. So he's still pumping up interest for the development of this project. And the new governor, Governor [ Matthias ], he is also extremely helpful in trying to get this project up and running. So this won't drag out in terms of timing.

Finally, financing for these sorts of projects in the past from countries like the U.S. has been very difficult. Most financial markets professionals in the U.S. have never been to mine and understand the intricacies of a rare earth project. Are you finding that there's now more interest coming out of the larger capital markets such as the U.S. for projects such as this given the high profile of critical minerals over the last year or two?

Yes, absolutely. There's certainly been an interest from the U.S. to help fund operations in other countries. If you read the National Security Strategy from the Trump administration published in December, they specifically referred to the Western Hemisphere. They wanted to be dominant in the critical metals in the Western Hemisphere, and that's a clear indication for Brazil. So you would have also seen the takeover by U.S. rare earths listed on NASDAQ of the Serra Verde mine in Brazil. So there is this huge push to secure offtake for U.S. supply chain. The U.S., quite frankly, doesn't have a lot of rare earths other than Mountain Pass. There's a couple of emerging deposits, but U.S. rare earths, I think has pretty much put the rules through its round top deposit in Texas by its move to buy the Serra Verde mine in Brazil. There's a lot of technology being developed in the U.S., like REalloys and other companies have got the technology for separation of rare earths for metallization, but they don't have the feedstock. So that puts St. George in a great position, a great position to do business in the U.S.

Thank you, John. That's a wonderful summary and really emphasizes the importance of projects like this to the technology for the global future. There are more questions there, but I'm going to encourage people to e-mail them to you at [email protected]. This webinar has been recorded, and we will make it available to everybody once it's been downloaded. Thank you to everybody for joining us today, and thank you, John, for your tremendous update on the project of St. George Mining.

Thank you, Peter, and thank you, everyone, for tuning in. Thank you very much.