South Star Battery Metals Announces Repricing of Non-Brokered Private Placement and Approval of Omnibus Incentive Plan

Rhea-AI Summary

South Star Battery Metals (TSXV:STS)(OTCQB:STSBF) has announced the repricing of its non-brokered private placement. The new offering consists of units priced at US$0.43 per share with one warrant at US$0.89, valid for five years, aiming to raise up to US$2.5 million. The warrants include an acceleration clause that can be triggered if the stock trades above US$1.79 for ten consecutive days. The company may increase the placement size by 15% through an over-allotment option. Proceeds will fund exploration, development, and working capital. Additionally, shareholders have approved a new 10% rolling omnibus incentive plan, with 1,605,000 stock options and 334,035 RSUs currently issued.

Positive

• Potential to raise up to US$2.5 million in fresh capital
• Five-year warrant term provides long-term funding flexibility
• 15% over-allotment option could increase funding amount

Negative

• Potential dilution for existing shareholders through new share issuance
• Repricing of private placement might indicate challenging market conditions

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES FOR DISSEMINATION IN THE UNITED STATES

VANCOUVER, BC / ACCESSWIRE / December 2, 2024 / South Star Battery Metals Corp. ("South Star" or the "Company") (TSXV:STS)(OTCQB:STSBF), is pleased to announce that it intends to reprice the previously announced non-brokered private placement (the "Private Placement") of common shares (the "Shares") at a revised unit price consisting of one (1) common share priced at US$0.43 (C$0.60) per Share and one (1) common share purchase warrant ("Warrant") priced at an exercise price of US$0.89 (C$1.25) per share good for five (5) years from the date of issue to raise up to US$2,500,000 (C$3,500,000). The Warrants are subject to an acceleration clause described in more detail below.

Closing of the Private Placement is subject to customary closing conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange (the "TSXV"). Proceeds from the Private Placement will be used for exploration, development, corporate G&A and general working capital requirements.

The Company may pay finders' fees to eligible finders, in accordance with applicable securities laws and the policies of the TSXV. The securities issued pursuant to the Private Placement will be subject to a four-month hold period. The Company may, in its sole discretion, exercise an over-allotment option pursuant to which it may increase the size of the Private Placement by up to 15%.

Insiders may participate in the Private Placement including subscriptions from related parties of the Company as defined in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The participation of insiders in the Private Placement is exempt from formal valuation and minority shareholder approval requirements pursuant to exemptions contained in sections 5.5(c) and 5.7(1)(a) of MI 61-101.

Acceleration Clause

The acceleration clause of the Warrants will provide that, if, during any period of ten (10) 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) is equal to or exceeds US$1.79 (C$2.50) on each day, the Company may, within thirty (30) days of such an occurrence, give notice, via news release, to the holders of the Warrants that all unexercised Warrants will expire at 4:00 p.m. (Vancouver time) on the 30th day following the giving of such notice.

Omnibus Incentive Plan

The Company announces that its shareholders approved the Company's new 10% rolling omnibus incentive plan at the Company's Annual General Meeting held on October 24, 2024 of which there are currently 1,605,000 stock options and 334,035 RSU's issued.

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About South Star Battery Metals Corp.

South Star is a Canadian battery-metals miner focused on developing a vertically integrated Americas battery anode material strategy to supply the expanding worldwide lithium-ion battery ("LiB"), fuel cell, defense and industrial graphite markets. 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 was 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 (> 30 tonnes) has been completed. The results of the testing show that approximately 65% of graphite concentrate is +80 mesh with good recoveries and 95%-99% graphitic carbon (Cg). With excellent infrastructure and logistics, South Star Phase 1 is ramping up commercial production with first sales expected to be shipped in December 2024. Santa Cruz Phase 1 commercial production has a nameplate capacity of 12,000 tpy and is the first new graphite production in the Americas since 1996. Phase 2 production (25,000 tpy) is partially funded and planned for 2026, while Phase 3 (50,000 tpy) is scheduled for 2028.

South Star's second project in the development pipeline is strategically located in Alabama, U.S.A. in the center of a developing electric-vehicle, aerospace, and defense hub in the southeastern United States. The BamaStar Project includes a historic mine active during the First and Second World Wars. A positive NI 43-101 Preliminary Economic Assessment was filed on SEDAR+ in November 2024 presenting outstanding Pre-tax Net Present Value ("NPV8%") of US$2.4B with an Internal Rate of Return ("IRR") of 35% and an after-tax NPV8% of US$1.6B with an IRR of 27%. The BamaStar open pit mine has a 19-year life of mine, and project economics incorporate both Santa Cruz and BamaStar Mines feeding concentrates to the value-add plant near the Port of Mobile, Alabama. The vertically integrated facilities will produce approximately 100,000 tpy of graphite concentrates and 61,800 tpy of upgraded products, including approximately 38,000 tpy of coated, purified, spheronized graphite ("CSPG"). All facilities are developed in a phased, modular plan.

South Star is executing the Company's strategic plan of bringing vertically integrated, phased, modular production in the Americas of midstream and downstream products in a disciplined, technically viable and profitable business plan with a go-to market commercial strategy. South Star has a diversified portfolio of scalable assets with near-term operations in strategic, tier-one jurisdictions at a time when the markets require additional materials and are looking for a stronger, more diversified, reliable supply chain of critical materials. 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 for South Star 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 South Star Board of Directors,

MR. RICHARD L. PEARCE,
President & Chief Executive Officer

For additional information, please contact:

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

Website: www.southstarbatterymetals.com
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: 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.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

SOURCE: South Star Battery Metals Corp.

View the original press release on accesswire.com

FAQ

What is the new price for South Star Battery Metals (STSBF) private placement?

The private placement is priced at US$0.43 per share with one warrant at US$0.89, exercisable for five years.

How much money is South Star Battery Metals (STSBF) aiming to raise in December 2024?

South Star Battery Metals aims to raise up to US$2.5 million (C$3.5 million) through the private placement.

What is the acceleration clause trigger price for STSBF's warrants?

The acceleration clause can be triggered if the stock trades above US$1.79 (C$2.50) for ten consecutive trading days.