SGQ starts pilot plant test work for rare earths and niobium

Our Investment St George Mining (ASX: SGQ) has now started construction works on a large scale rare earths & niobium pilot processing plant in Brazil.

SGQ confirmed that environmental and building permits had been received and that construction was now underway.

SGQ expects to have the facility completed by December 2026 and operational by January 2027…

Once online - the plant will have a throughput capacity of up to 300kg per hour, producing niobium concentrate and a range of rare earth products.

Here is a render of what the facility should look like in a few months time:

(source)

At the same time SGQ is also running a pilot plant study on ~9 tonnes of near-surface material from Araxá through the flotation process over the next four to six weeks:

(source)

SGQ had already produced separate high-grade niobium and rare earth concentrates from this material back in June, which we wrote about here.

This round of work is aiming to improve on those recoveries and grades by using locked cycle test work that can recycle streams back through the circuit.

Importantly, these results are consistent with established niobium operations on this style of mineralisation common to the area.

(this proposed processing route is actually very similar to the one used by CBMM next door, the same CBMM that produces around 80% of the worlds niobium supply)

Next, the niobium concentrate goes into downstream test work targeting the ferroniobium, and then the rare earth enriched tailings from this part become an intermediate rare earth product.

Results from the pilot plant study are expected in Q4 2026.

Here is how the process works (which is a bit easier to understand):

(source)

We think the pilot plant milestones could be big for SGQ because it will mean product samples can be produced to show potential offtakers - from what is the largest and highest grade carbonatite hosted rare earths resource in South America.

What’s next for SGQ?

Drilling results 🔄

SGQ is currently drilling its project 24/7 with five diamond rigs - focused mostly on its discovery to the east of its current resource.

SGQ expects to have a maiden JORC resource out on that project in Q4-2026. (source)

(source)(source)

Beyond the drilling 🔄

Over the next 12 months, a lot of the catalysts for SGQ could come at hard-to-forecast times:

• Updates on downstream processing strategy - We want to see SGQ define its downstream rare earths strategy. We are especially looking forward to an update in relation to the US. SGQ recently extended its agreement with US magnet producer REalloys, who SGQ is aiming to supply feedstock to (source). SGQ has confirmed there are talks with more downstream partners and offtake partners, plus multiple strategic investors.
• Work on development studies - SGQ has already commenced environmental, geotechnical and development studies. SGQ has economic studies due on its deposit in Q3-Q4 2026. (source)
• Pilot plant trials - SGQ has signed an agreement with CEFET to jointly collaborate on a new Pilot Plant trial that will build on a prior 9 month trial from 2012-13 which successfully produced rare earth product at over 99% purity and recoveries of 86% TREO.

The pilot plant is expected to begin in January and should allow for product samples to be produced for potential strategics/offtake partners. (source)

SGQ is also participating in the “MAGBRAS Initiative” - a program that has major automakers like Stellantis working toward building Brazil’s first permanent magnet-making facility.

• Permitting - SGQ is targeting completion for permitting to progress throughout 2026 with 2 mining concession applications and 1 exploration permit.

(source)