St George Mining (ASX:SGQ) signed a memorandum of understanding (MOU) with Tecnicas Reunidas to complete processing test work on samples of the rare earths resource at its Araxa niobium-rare earth elements project in Brazil, according to a Tuesday Australian bourse filing.

The company said the initial scope of work will test the suitability and efficiency of Tecnicas Reunidas' proprietary RARETECH technology for processing rare earth materials from the Araxa project, including the refinement of rare earth mineralization to produce mixed rare earth carbonate (MREC) and rare earth oxide, and the separation and splitting of rare earth elements.

St George will bear the costs of work completed by Tecnicas Reunidas, with a final negotiation of the work fee underway, the filing added.

The company's shares fell 4% in recent Tuesday trade.