South Star Battery Metals Announces Closing of a Non-Brokered Private Placement

Rhea-AI Summary

South Star Battery Metals Corp. (STSBF) announced the completion of a non-brokered private placement totaling C$230,166 on January 10, 2023. The funds raised will support exploration, development, and operational costs, with Phase 1 production planned for Q4 2023 at the Santa Cruz Graphite Project in Brazil. The placement involved issuing 434,277 units at C$0.53 each, granting warrant holders the ability to purchase shares at C$1.25 for five years. The company anticipates significant growth and cash flow amid a global deficit in critical metal supplies.

Positive

• Completed a private placement raising C$230,166.
• Funds allocated for exploration and Phase 1 construction, expected to start production in Q4 2023.
• Strong partnership with institutional investors familiar with the battery metals sector.
• Major equipment contracts signed, enhancing production capabilities.

Negative

• None.

VANCOUVER, BC, Jan. 10, 2023 /PRNewswire/ - South Star Battery Metals Corp. ("South Star" or the "Company") (TSXV: STS) (OTCQB: STSBF), is pleased to announce that it has completed a non-brokered private placement of units (the "Private Placement" or the "Offering") for total proceeds of C$230,166. This Offering is related to the Company's previous private placement completed in November 2022 (See press release dated Nov. 16, 2022), but funds were received in January of 2023. Net proceeds from the Private Placement will be used for exploration, development, Phase 1 construction activities, corporate G&A and general working capital requirements. Phase 1 commercial production is planned for Q4 2023.

Richard Pearce, CEO of South Star, said, "We have successfully partnered with strong, long-term institutional investors familiar with Brazil, mineral resources and battery metals sector. Funding with Sprott for Phase 1 construction has been released, and Phase 1 construction is well underway. The owner's team is mobilized for construction, and the majority of the major equipment contracts have been signed and down-payments made to lock in our equipment CAPEX. 2023 will be a watershed year for South Star as we transition Santa Cruz from a development project into a producing mine. We look forward to 2023 production of high-quality graphite concentrates and cashflows at a time when critical metals supply is in a global deficit and key markets are reorganizing their supply chain as the world transitions through the green energy revolution. Our Santa Cruz Mine in Brazil and Alabama Project in US will be an important part of the global solution to quickly bringing critical metals to market in stable, safe jurisdictions. South Star has great assets in key jurisdictions, an experienced team in place with a track record of delivering long-term, disciplined value, and near-term production beginning at the right time in the market cycle. We will deliver on our promise and commitment to be the first new graphite production since 1996."

The Private Placement consists of 434,277 units priced at C$0.53 per unit (the "Units"). Each Unit consists of one (1) common share and one (1) common share purchase warrant (the "Warrants"). Each Warrant entitles the holder to purchase one additional common share of the Company at an exercise price of C$1.25 per common share for a period of five years from the date of issue, subject to acceleration as set out below. The securities issued in this Private Placement will be subject to a four-month hold period from the date of closing and approval by the TSXV, expiring May 10, 2023. In connection with the Private Placement, the Company issued an aggregate amount of 8,685 brokers' warrants in connection with the Private Placement and paid $13,810 in cash finders' fees to certain finders.  Each finders warrant entitles the holder to acquire one common share of the Company at a price of $0.53 for a period of 5 years from the date of issuance, subject to acceleration as set out below.

Acceleration Clause

If during a period of ten consecutive trading days between the date that is four (4) months following the closing of the Private Placement and the expiry of the Warrants the daily volume weighted average trading price of the common shares of the Company on the TSXV (or such other stock exchange where the majority of the trading volume occurs) exceeds C$2.50 for each of those ten consecutive days, the Company may, within 30 days of such an occurrence, give written notice to the holders of the Warrants that the Warrants will expire at 4:00 p.m. (Vancouver time) on the 30th day following the giving of notice unless exercised by the holders prior to such date. Upon receipt of such notice, the holders of the Warrants will have 30 days to exercise their Warrants. Any Warrants which remain unexercised at 4:00 p.m. (Vancouver time) on the 30th day following the giving of such notice will expire at that time.

About South Star Battery Metals Corp

South Star Battery Metals Corp. is a Canadian battery metals project developer focused on the selective acquisition and development of near-term production projects in the Americas. South Star's Santa Cruz Graphite Project, located in Southern Bahia, Brazil is the first of a series of industrial and battery metals projects that will be put into production. Brazil is the second-largest graphite-producing region in the world with more than 80 years of continuous mining. Santa Cruz has at-surface mineralization in friable materials, and successful large-scale pilot-plant testing (>30t) has been completed. The results of the testing show that approximately 65% of Cg concentrate is +80 mesh with good recoveries and 95%-99% Cg. With excellent infrastructure and logistics, South Star is carrying its development plan towards Phase 1 production projected in Q4 2023.

South Star's next project in the development pipeline is a project in Alabama located in the middle of a developing electric vehicle, aerospace and defence hub in the southeastern United States.  The Project is a historic mine active during World Wars I & II.  Trenching, sampling, analysis and preliminary metallurgic testing has been completed.  The testing indicated a traditional crush/grind/flotation concentration circuit achieved grades of approximately 96-97% with approximately 86% recoveries. South Star is executing on its plan to create a multi-asset, diversified battery metals company with near-term operations in strategic jurisdictions.  South Star trades on the TSX Venture Exchange under the symbol STS, and on the OTCQB under the symbol STSBF.

South Star is committed to a corporate culture, project execution plan and safe operations that embrace the highest standards of ESG principles based on transparency, stakeholder engagement, ongoing education and stewardship. To learn more, please visit the Company website at http://www.southstarbatterymetals.com.

This news release has been reviewed and approved by Richard Pearce, P.E., a "Qualified Person" under National Instrument 43-101 and President and CEO of South Star Battery Metals Corp.

On behalf of the Board,

Mr. Richard Pearce
Chief Executive Officer

For additional information, please contact:

South Star Investor Relations
Email: invest@southstarbatterymetals.com
+1 (604) 706-0212

Twitter: https://twitter.com/southstarbm
Facebook: https://www.facebook.com/southstarbatterymetals
LinkedIn: https://www.linkedin.com/company/southstarbatterymetals/
YouTube: South Star Battery Metals - YouTube

CAUTIONARY STATEMENT

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Forward-Looking Information

This press release contains "forward-looking statements" within the meaning of applicable securities legislation. Forward-looking statements relate to information that is based on assumptions of management, forecasts of future results, and estimates of amounts not yet determinable. Any statements that express predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance are not statements of historical fact and may be "forward-looking statements". Forward-looking statements in this press release include, but are not limited to, statements regarding: moving Santa Cruz into production and scaling operations as well as advancing the Alabama project; and the Company's plans and expectations.

Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation: closing of the second trance of the financing and the Sprott Agreement, TSXV acceptance of the PIF, final TSXV approval of the financing, risks related to failure to obtain adequate financing on a timely basis and on acceptable terms; risks related to the outcome of legal proceedings; political and regulatory risks associated with mining and exploration; risks related to the maintenance of stock exchange listings; risks related to environmental regulation and liability; the potential for delays in exploration or development activities or the completion of feasibility studies; the uncertainty of profitability; risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits; risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; results of prefeasibility and feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company's expectations; risks related to commodity price fluctuations; and other risks and uncertainties related to the Company's prospects, properties and business detailed elsewhere in the Company's disclosure record. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Investors are cautioned against attributing undue certainty to forward-looking statements. These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from the Company's expectations or projections.

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SOURCE South Star Battery Metals Corp.

FAQ

What did South Star Battery Metals announce on January 10, 2023?

The company announced the completion of a non-brokered private placement raising C$230,166.

How will South Star use the proceeds from the private placement?

The proceeds will be used for exploration, development, Phase 1 construction activities, corporate G&A, and general working capital.

What is the planned timeline for Phase 1 production at South Star's Santa Cruz Project?

Phase 1 production is planned for Q4 2023.

What are the details of the units sold in the private placement?

The private placement involved 434,277 units priced at C$0.53 each, each unit consisting of one common share and a purchase warrant.

What is the exercise price and duration of the warrants issued by South Star?

The warrants allow purchase of common shares at C$1.25 for five years from the date of issuance.