en.Wedoany.com Reported - St George Mining (ASX:SGQ) has announced institutional investor support for a two-tranche placement, including from Hancock Prospecting, privately owned by Gina Rinehart, which is already the company's largest shareholder.
Hancock Prospecting has committed to subscribing for 200 million shares, totaling A$20 million. Upon completion of the placement, Hancock Prospecting will hold approximately 10.5% of St George Mining's shares.
St George Mining Executive Chairman John Prineas said the company is pleased with the strong support from new and existing institutional investors who recognize the development potential of the Araxá project. He noted that the world-class resource at Araxá has the potential to be developed on an accelerated timeline, including high-grade mineralization starting from surface and favorable project logistics within a mature mining district, as governments and private enterprises globally race to establish new critical minerals product supply chains. The newly secured funds will strengthen and accelerate St George's plans to advance the Araxá project, including feasibility study work and a financial investment decision.
Hancock Prospecting is an Australian mining giant, renowned for its iron ore operations in the Pilbara region. The group has been diversifying into modern commodities such as lithium and rare earths. The company first appeared on St George's shareholder register in October last year, investing A$22.5 million via a placement. Hancock Prospecting Executive Chairman Gina Rinehart noted that the company is pleased to support St George as its largest shareholder through additional investment and looks forward to the Araxá project becoming a significant part of the global critical minerals supply chain.
St George Mining believes the Araxá project has geological similarities to globally significant rare earth mines such as Lynas's (ASX:LYC) Mt Weld mine in Western Australia. In recent months, the company has reported numerous high-grade rare earth and niobium intercepts from ongoing drilling campaigns. In March, the project boosted the Araxá Mineral Resource Estimate (MRE) by 75% to a total of 70.71 million tonnes at 4.06% TREO and 0.62% Nb2O5. The Indicated and Measured category increased by 218% to 29.49 million tonnes at 4.56% TREO and 0.75% Nb2O5. Follow-up drilling results are expected to support an upgraded MRE and generate important data for the project feasibility study. A new resource update is expected in the third quarter. Meanwhile, two mining lease applications are progressing, metallurgical test work is underway to develop a processing flowsheet, and environmental, geotechnical, and development studies are also proceeding in parallel.
The new shares under the placement will be issued in two tranches. The first tranche is expected to raise approximately A$42.4 million through the issue of 424.5 million shares at A$0.10 per share, with settlement anticipated on June 23. The second tranche seeks to raise an additional A$17.6 million, subject to shareholder approval, with St George planning to hold an Extraordinary General Meeting (EGM) on July 10 to obtain consent.
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