South Star Mining Announces Strategic Private Placement to Advance the Santa Cruz Graphite Project
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 Announces Strategic Private Placement
to Advance the Santa Cruz Graphite Project
February 4th, 2019 – Vancouver, B.C. - South Star Mining Corp. (“South Star” or the
“Company”) (TSXV: STS) (OTCQB: STSBF) announces that it intends to complete an insider-led,
non-brokered private placement of Units (the “Private Placement”) to raise C$500,000. Management
and insiders have committed to purchase a minimum of C$400,000 of the offered Units.
The Private Placement will consist of 5,000,000 Units priced at C$0.10 per unit (the “Units”). Each
Unit will consist of one (1) common share and one (1) common share purchase warrant (the
“Warrants”). Each Warrant will entitle the holder to purchase one additional common share of the
Company at an exercise price of C$0.15 per common share for a period of 2 years from the date of
issue. The securities will be subject to a four month hold period from the date of closing and approval
by the TSX Venture Exchange. The Private Placement will be available to existing shareholders of
the Company and all Warrants issued under the Private Placement will be subject to an acceleration
clause. See below for further details.
The proceeds from the Private Placement will be used to advance on-going work at the Santa Cruz
Graphite Project including engineering, testing, environmental permitting and licensing. CEO Eric
Allison commented “After the successful completion of our drilling campaign in Q4 of 2018, we are
excited to be moving to the next phases of the project. Our objective this year will be to complete
those critical activities, deliver a 43-101 prefeasibility study and obtain a trial mining license for the
planned 5,000 tonnes per year plant. It is a strong endorsement of the value of the project that the
members of our team have agreed to support this financing and help push Santa Cruz towards
production as rapidly as possible.”
Acceleration Clause, Existing Shareholder Exemption and Investment Dealer Exemption
If over a period of 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 TSX Venture Exchange (or such other
stock exchange where the majority of the trading volume occurs) exceeds $0.25 on each of those 10
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.
In addition to other prospectus exemptions commonly relied on in private placements, the Offering
will be available to existing shareholders of the Company who, as of the close of business on February
1, 2019, held common shares of the Company (and who continue to hold such common shares as of
the closing date), pursuant to the prospectus exemption set out in BC Instrument 45-534 - Exemption
From Prospectus Requirement for Certain Trades to Existing Security Holders and in similar
instruments in other jurisdictions in Canada (the “Existing Shareholder Exemption”). The Existing
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.
Shareholder Exemption limits a shareholder to a maximum investment of CAD$15,000 in a 12-month
period unless the shareholder has obtained advice regarding the suitability of the investment and, if the
shareholder is resident in a jurisdiction of Canada, that advice has been obtained from a person that is
registered as an investment dealer in the jurisdiction. If the Company receives subscriptions from
investors relying on the Existing Shareholder Exemption exceeding the maximum Offering, the
Company may adjust the subscriptions received on a pro-rata basis.
The Company will also make the Offering available to certain subscribers pursuant to BC Instrument
45-536 - Exemption From Prospectus Requirement for Certain Distributions Through an Investment
Dealer (the “Investment Dealer Exemption”). In accordance with the requirements of the Investment
Dealer Exemption, the Company confirms that there is no material fact or material change about the
Company that has not been generally disclosed.
In connection with the private placement, the Company proposes to issue Units to directors, officers
and insiders of the Company. As a result, the private placement will constitute a related party
transaction pursuant to TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 (“MI
61-101”). The Company has determined that exemptions from the various requirements of TSX
Venture Exchange Policy 5.9 and MI 61-101 are available for the issuance of the Units to related
parties. The Company will rely on Section 5.5(c) of MI 61-101 for an exemption from the formal
valuation requirement on the basis that the transaction will be a distribution of securities for cash, and
on Section 5.7(1)(b) of MI 61-101 for an exemption from the minority shareholder approval
requirement, as the fair market value of the transaction, insofar as it involves related parties, will not
be more than $2,500,000.
ABOUT SOUTH STAR MINING CORP.
South Star Mining Corp. is focused on the acquisition and development of near-term mine production
projects to maximize shareholder value. The Company is currently advancing the Santa Cruz Graphite
Project toward planned production in the Bahía State of 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]
For additional information, please contact:
Mr. Dave McMillan
Chairman
Ph: +1 (778) 773-4560
Email: [email protected]
Mr. Kris Kottmeier
VP Corp Development
Toll Free: +1 (877) 828-8983
Email: [email protected]