South Star Mining Closes First Tranche of its Financing 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 Closes First Tranche of its Financing
to Advance the Santa Cruz Graphite Project
March 1st, 2019 – Vancouver, B.C. - South Star Mining Corp. (“South Star” or the “Company”)
(TSXV: STS) (OTCQB: STSBF) announces that it has completed the first tranche of an insider-led,
non-brokered private placement of Units (the “Private Placement”) to raise C$500,000.
The first tranche proceeds were C$405,000 for a total of 4,050,000 units of the Private Placement.
South Star insiders have subscribed for C$235,000 in this financing. Proceeds will be used to advance
the Santa Cruz Graphite Project on its ‘Road to Production’. Uses will include engineering, testing,
environmental permitting and licensing. The closing date of this first tranche was February 28th, 2019.
In connection with the first tranche closing of the Offering, the Company paid cash finder’s fees of
C$4,900 and issued 49,000 share purchase warrants (“Finder’s Warrants”) to a third-party finder in
connection with the private placement. Each Finder’s Warrant entitles the holder to purchase one
common share of the Company at a purchase price of C$0.15 for a period of up to 2 years from the
date of issue.
“We welcome our new investors and are grateful to our existing shareholders and insiders for their
continued support" commented Company CEO Eric Allison. He added "this financing will help
maintain the steady progress on key elements of our Santa Cruz Graphite Project. We anticipate
completion of this work and the awarding of our 5,000 tonnes per year Trial Mining License during
Q3 of this year."
The Private Placement consists of 5,000,000 Units priced at C$0.10 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$0.15 per common share for a period of 2 years from the date of issue. The securities are
be subject to a four month hold period from the date of closing and approval by the TSX Venture
Exchange. The Private Placement remains available to existing shareholders of the Company and all
Warrants issued under the Private Placement are subject to an acceleration clause. See below for further
details.
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.
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.
In addition to other prospectus exemptions commonly relied on in private placements, the Offering has
been made 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 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 has also made 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 proposed to issue Units to directors, officers
and insiders of the Company. As a result, the private placement constitutes 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
is relying on Section 5.5(c) of MI 61-101 for an exemption from the formal valuation requirement on
the basis that the transaction is 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]
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.
Mr. Kris Kottmeier
VP Corp Development
Toll Free: +1 (877) 828-8983
Email: [email protected]
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". 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
statements.