St George Mining Re-rated After Araxá Drill Success
1/21/2026, 6:29:24 PM | Australia | South America
Araxá drill hits boosted St George shares, but a 16.6x P/B and a conservative DCF imply significant valuation risk.
St George Mining reported high-grade rare earth and niobium intersections at its Araxá project in Brazil, with drilling extending mineralisation beyond existing resource boundaries.
The market reacted sharply: one-day share gains of 8.7%, 30-day gains of 19.05% and year-to-date appreciation of about 30.2%, while one-year total shareholder return sits at roughly 3.6x. Longer term three- and five-year returns remain more modest.
Valuation metrics reveal a divergence of views. The stock trades at A$0.125 versus an analyst target of A$0.21, yet it carries a price-to-book ratio of 16.6x—well above the Australian metals and mining industry average (~2.7x) and peer average (~3.4x). The company is currently unprofitable, reporting a loss of A$11.34m on A$93k of revenue.
A conservative discounted cash flow model yields a fair value near A$0.02, highlighting a substantial gap with the market price and suggesting investor optimism about future project development and resource conversion.
Key considerations for semi-technical investors include resource growth potential, permitting and scaling risk, continued funding and cash burn, and whether current market pricing already embeds optimistic project outcomes.