• Global mining engineering firm backs Araxá with $8m equity investment
• The firm enters into EPC deal with St George
• The two companies will establish a mutually acceptable funding solution

Special Report: Brazil-focused niobium explorer St George Mining has struck a deal with leading engineering firm Xinhai regarding the development of the high-grade Araxá project.

The two companies plan to negotiate and enter into a definitive strategic partnership agreement within nine months, which will see Xinhai – a services provider to the mining industry – provide advice on various aspects of the project such as metallurgical testing, mineral processing options and plant design.

Xinhai will also provide a proposal for a fixed price EPC contract for the construction of the asset and assist St George Mining (ASX:SGQ) on optimal, non-dilutive funding.

In parallel, Xinhai has invested $8m in to $20m equity fund raising being carried out by SGQ in support of the Araxá acquisition.

The acquisition is being voted on by shareholders at a general meeting scheduled for February 18, 2025.

Acquisition completion this quarter

Xinhai is a leading global services provider to the mining sector with a track record of delivering services to more than 2000 mines in over 100 countries, helping to construct more than 500 EPCM+O projects.

SGQ entered into a conditional binding agreement for the acquisition of Araxá last year and has assembled a highly experienced in-country team in Brazil to drive the project through exploration work and development studies.

The company expects to complete the acquisition in Q1, 2025.

‘Near-term development potential’

“Xinhai’s global depth of expertise across the entire spectrum of mine development disciplines ensures that it can design and deliver optimal project solutions,” SGQ executive chairman Jon Prineas said.

“St George’s ability to attract industry leading partners like Xinhai reflects the near-term development potential of the Araxá Project and the favourable mining jurisdiction of Minas Gerais.

“We also welcome Xinhai as a new shareholder in St George, which will further align our respective interests in advancing the Araxá Project to a successful operating mine.”

This article was developed in collaboration with St George Mining, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.