South Star Mining Corp. Announces Brokered Subscription Receipt
Neither 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 release.
NEWS RELEASE
South Star Mining Corp. Announces Brokered Subscription Receipt
Financing In Connection with Acquisition of 100% Interest
in Santa-Cruz Graphite Project
Not for distribution to US wire services or for dissemination in the United States of America
February 28th, 2018 – Vancouver, B.C. - South Star Mining Corp. (“South Star” or the
“Company”) (TSXV: STS.H) is pleased to announce that, in connection with the previous
announcement that South Star has entered into a definitive agreement (the “Definitive
Agreement”) to acquire a 100% interest in the Santa-Cruz Graphite Project (the “Transaction”)
with Brasil Graphite Corp. (“Brasil Graphite”), South Star intends complete a private placement
of subscription receipts (each, a “Subscription Receipt”) to raise gross proceeds of a minimum
of C$5,000,000 and a maximum of C$8,000,000 (the “Private Placement”).
South Star is also pleased to announce that it has entered into an agreement with a syndicate of
agents led by Echelon Wealth Partners Inc. (the “Lead Agent”), and including Haywood Securities
Inc., PI Financial Corp. and Eight Capital Inc. (collectively referred to as, the “Agents”) to sell,
on a commercially reasonable efforts basis, a minimum of 11,111,111 Subscription Receipts and
a maximum of 17,777,777 Subscription Receipts at a price of C$0.45 per Subscription Receipt
(the ”Offering Price”). The Private Placement is expected to close on or about March 29, 2018
(the “Closing Date”).
Each Subscription Receipt shall be automatically converted, without any further action by the
holder of such Subscription Receipt, and for no additional consideration, into one unit of the
Company (each a “Unit” and collectively the “Units”) upon receipt by the escrow agent, prior to
the date that is three months from the Closing Date (the “Escrow Deadline”) of a release notice
from the Company and the Lead Agent, on behalf of the Agents, confirming (collectively, the
“Escrow Release Conditions”): (a) the completion, satisfaction or waiver of all conditions
precedent to the Transaction in accordance with the Definitive Agreement, to the satisfaction of
the Agents; (b) the receipt of all required shareholder and regulatory approvals, including, without
limitation, the conditional approval of the TSX Venture Exchange for the listing of the Common
Shares and the Transaction; (c) receipt by the Agents of an opinion of counsel of the Company
that upon the conversion of the Subscription Receipts and completion of the Transaction, the
Common Shares issued as part of the Units, will not be subject to any statutory or other hold period
in Canada which extends beyond 4 months and one day after the Closing Date; and (d) the
representations and warranties of the Company contained in an agency agreement to be entered
into on the Closing Date to be true and accurate in all material respects, as if made on and as of
the escrow release date.
Neither 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 release.
Each Unit will consist of one common share of the Company (a “Common Share”) and one
Common Share purchase warrant (a “Warrant”). Each Warrant will entitle the holder thereof to
purchase one common share of the Company for a period of 24 months from the date of issuance
at a price of C$0.75 per common share.
The Company has agreed to: (i) pay the Agents a cash commission equal to 7.5% of the gross
proceeds of the Private Placement, (ii) issue to the Agents such number of share purchase warrants
(each, an “Agents’ Warrant”) as is equal to 7.5% of the number of Subscription Receipts sold
under the Offering, with each Agents’ Warrant entitling the holder to acquire one Unit at the
Offering Price until the date that is 24 months from the Closing Date.
The gross proceeds of the Private Placement, less the Agents’ expenses and 60% of the Agents’
fees (the “Escrowed Funds”), shall be deposited in escrow on the Closing Date. The Escrowed
Funds (less amounts payable by the Company to the Agents) shall be released from escrow by the
Escrow Agent to the Company upon the completion or irrevocable waiver or satisfaction of the
Escrow Release Conditions. If (i) the Escrow Release Conditions are not satisfied on or before the
Escrow Deadline, or (ii) prior to the Escrow Deadline the Company advises the Agents or
announces to the public that it does not intend to satisfy the Escrow Release Conditions, the
Escrowed Funds (plus accrued interest earned thereon) shall be returned to the holders of the
Subscription Receipts on a pro rata basis and the Subscription Receipts will be cancelled without
any further action on the part of the holders. To the extent that the Escrowed Funds (plus accrued
interest) are not sufficient to refund the aggregate Issue Price (plus accrued interest) paid by the
holders of the Subscription Receipts, the Company will be responsible and liable to contribute
such amounts as are necessary to satisfy any shortfall.
South Star intends to use the net proceeds of the Private Placement for the acquisition of the Santa-
Cruz Graphite Project, drilling, general corporate and working capital purposes.
ABOUT SOUTH STAR MINING CORP.
South Star Mining Corp. is focused on the acquisition and development of near-term mine
production projects in Brazil to maximize shareholder value. The company is currently working
towards completing the acquisition of the Santa-Cruz Graphite Project in the Bahia State, Brazil.
To learn more, please visit the Company website at www.southstarmining.com.
On behalf of the Board,
Mr. Eric Allison
Chief Executive Officer
Ph: +1 (203) 918-3098
Email: [email protected]
Neither 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 release.
For additional information, please contact:
Mr. Kris Kottmeier
VP Corp Development
Ph: +1 (604) 506-2502
Email: [email protected]
CAUTIONARY STATEMENT
Completion of the Transaction is subject to a number of other conditions. There can be no
assurances that the Transaction will be completed as proposed or at all. Investors are cautioned
that, except as disclosed in the management information circular or filing statement to be prepared
in connection with the Transaction, any information released or received with respect to the
Transaction may not be accurate or complete and should not be relied upon. Trading in the
securities of the Company should be considered highly speculative.
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.
Neither the TSXV nor its Regulation Services Provider has in any way passed upon the merits
of the proposed Transaction and associated transactions and neither of the foregoing entities
has in any way approved or disapproved of the contents of this press release.
Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable
securities laws. Generally, any statements that are not historical facts may contain forward-
looking information, and forward-looking information can be identified by the use of forward-
looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or indicates that certain actions, events or
results "may", "could", "would", "might" or "will be" taken, "occur" or "be achieved". Forward-
looking information includes, the Company may abandon the Transaction; Escrow Release
Conditions may not be satisfied; the Transaction may involve unexpected costs, unexpected
liabilities or unexpected delays; the Private Placement may not close; the TSXV Venture Exchange
may not approve the Private Placement or the Transaction; and the Company or Brasil Graphite
may be adversely affected by other economic, business, and/or competitive factors. Although the
Company believes in light of the experience of its officers and directors, current conditions and
expected future developments and other factors that have been considered appropriate, that the
expectations reflected in this forward-looking information are reasonable, undue reliance should
not be placed on them because the Company can give no assurance that they will prove to be
correct. Readers are cautioned to not place undue reliance on forward-looking information.
Actual results and developments may differ materially from those contemplated by these
Neither 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 release.
statements depending on, among other things, the risks that the parties will not proceed with the
proposed Transaction and the Offering; that the ultimate terms of the proposed Transaction and
the Offering will differ from those that currently are contemplated; and that the proposed
Transaction and the Offering will not be successfully completed for any reason (including the
failure to obtain the required approvals or clearances from regulatory authorities). The terms and
conditions of the proposed Transaction may change based on the Company’s due diligence and
the receipt of tax, corporate and securities law advice for both the Company and Brasil Graphite.
The statements in this press release are made as of the date of this release and the Company
undertakes no obligation to comment on analyses, expectations or statements made by third-
parties in respect of the Company, Brasil Graphite their securities, or their respective financial or
operating results (as applicable).