South Star Announces Significant Increase in Mineral Resources and Positive BamaStar PEA Results for Vertically Integrated Graphite Mine and Value-Add Project in Alabama, U.S.A.
South Star Announces Significant Increase in Mineral Resources
and Positive BamaStar PEA Results for Vertically Integrated
Graphite Mine and Value-Add Project in Alabama, U.S.A.
Highlights:
• Positive National Instrument 43-101 (“NI 43-101”) Preliminary Economic Assessment (“PEA”) for the
BamaStar Mine and Concentrator Plant in Coosa County, AL and a value-add upgrading plant in Mobile,
AL. The natural flake graphite concentrate precursor material for the value -add plant will come from
South Star’s BamaStar and Santa Cruz Mines , which is now in Phase 1 operations in Brazil . First
production for BamaStar is planned by 2027.
• Pre-tax Net Present Value (“NPV 8%”) of US$ 2.4B with an Internal Rate of Return (“IRR”) of 35% and
after-tax NPV8% US$1.6B with an IRR of 27%.
• Life of mine (“LOM”) gross revenue of US$9.9B as well as pre-tax and post-tax free cashflow of US$6.0B
and US$4.3B, respectively.
• 19-Year open-pit mine life with an average concentration production of 47,147 tonne per year (“tpy”)
and a 2.4x increase in Mineral Resource tonnage, which contains over 1Mt of contained graphite.
• BamaStar Mine and Concentrator Plant is developed in a modular, phased approach using a simple
proven flowsheet resulting in an average recovery of 90% and concentrate grades ranging from 9 4%
graphitic carbon (“Cg”) for hard rock mill feed to >98% Cg for oxide mill feed. Each of the planned two
phases of the Concentrator Plant would produce approximately 25,000 tpy for a combined total of
50,000 tpy of natural flake graphite concentrate.
• The value-add plant is designed using chemical purification technology and standard, commercially
available equipment with no intellectual property that can purify to battery grade (> 99.95% Cg). The
Mobile, AL Plant is also developed in a phased, modular approach with each of the planned three
phases producing 20,600 tpy of upgraded graphite for a total of 61,800 tpy of upgraded products. This
amount includes approximately 38,000 tpy of coated, purified, spheronized graphite (“CSPG”).
• 1 Kg of purified graphite was transformed into purified and micronized graphite, as well as CSPG using
standard, commercially available, non -proprietary technologies. The CSPG was used to make both
CR2032 coin and pouch cells. The successful preliminary electrochemical testing results demonstrated
capacity and first -cycle loss performance that is comparable to Tier -1 commercial CSPG products,
including potential fast-charge capabilities with stable cycling.
• The PEA results have been delivered to the US Department of Defense Title III program managers for
review and comment in anticipation of the previously announced grant for funding US$3.2M for the
upcoming feasibility study (“FS”). The schedule is to complete the FS within 18 months after the start
of drilling program to support the study.
VANCOUVER — October 10, 2024 — SOUTH STAR BATTERY METALS CORP. (“South Star” or the “Company”)
(TSXV: STS) (OTCQB: STSBF) is pleased to announce the positive results and outstanding economics as presented
in the NI 43 -101 PEA 1 for the BamaStar Graphite Project (“BamaStar”) in Alabama (“AL”) US A. South Star is
developing a vertically integrated US A battery anode material strategy to supply the expanding worldwide
lithium-ion battery (“LiB”), fuel cell, defense and industrial graphite markets.
The BamaStar Project will consist of a graphite mine and concentrate processing facility in Coosa County, A L, as
well as a value-add plant proposed in Mobile, A L for upgrading and transforming the graphite concentrates
precursor. The proposed value-add plant is strategically located near the port and intermodal logistics facilities,
and it will receive natural flake graphite (“NFG”) concentrates from both BamaStar and South Star’s flagship Santa
Cruz Graphite Mine ("Santa Cruz”) in northeastern Brazil's Bahia state, which is currently commissioned and
ramping-up into commercial production. Santa Cruz is the first new graphite operation to go into production in
the Americas this century.
Richard Pearce, President and CEO of South Star , commented: “ We are pleased to announce these exciting
positive PEA results and encouraging economics for BamaStar. The results indicate the potential for a vertically
integrated solution in the near-term for graphite concentrates and value-add production in the contiguous United
States in the very heart of the southeast defense, aerospace and electric vehicle corridor where the material is
urgently needed. South Star has scalable, diversified portfolio of graphite mines and production facilities in Tier 1
jurisdictions to minimize production risk at a crucial moment for the critical metals sectors in the West. Santa Cruz
is ramping up Phase 1 operations and is fully licensed to expand production to 50,000 tpy of concentrates.
BamaStar is a past producing graphite mine, with a clear path to restarting, that we are pushing hard to deliver
concentrates integrated with value-add products by 2027. We believe o ur phased, modular approach is
financeable, permittable, profitable and scalable at a time when the markets require additional materials and are
looking for a stronger, more diversified supply chain of critical materials . Both our projects have proven their
potential economic viability and their technical suitability for LiBs and other value-add applications essential to
defense, energy storage and the energy transition . South Star is proud of its accomplishments at Santa Cruz as
the first new graphite producer in the Americas since 1996. Our team 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.”
Mineral Resource Estimate Update
The updated Mineral Resource estimate resulted in an increase to 52.2Mt from 22Mt of Inferred pit-constrained
Mineral Resources from the previous maiden Mineral Resource estimate and includes a significant new deeper
fresh rock zone that was previously undiscovered. The deposit is open at depth as well as along strike.
Table 1: BamaStar Graphite Deposit Mineral Resource Estimate – Effective Date: July 24, 2024
Type
Redox
State Cut-off (Cg %) Category
Tonnes
(Mt) Cg %
Contained Cg
(Mt)
Open
Pit
Oxide 0.90 Inferred 15.1 2.24 0.338
Transition 0.90 Inferred 8.3 2.16 0.179
Fresh 1.37 Inferred 28.8 1.96 0.564
Combined 0.90 / 0.90 / 1.37 Inferred 52.2 2.07 1.08
Mineral Resource Estimate Notes:
1. Mineral resources were prepared in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (MRMR) (2014) and
CIM MRMR Best Practice Guidelines (2019).
2. Graphitic carbon (Cg %) grade was estimated from 1.5 m downhole assay composites using Inverse Distance Squared. No grade capping was applied.
Model block size is 15 m (x) by 15 m (y) by 5 m (z). Block volume was assigned on a partial percentage basis.
3. A redox state geological model was developed from verified drill hole and trenching data and used to estimate oxide, transiti on, and fresh material
in the block model.
4. A weathering intensity geological model was developed from verified drill hole and trenching data and used to estimate weathe ring intensity as
strong, moderate, weak, and unweathered in the block model.
5. Bulk density was applied based on weathering intensity and reflects average bulk density determinations of 2.52 g/cm3, 2.57 g /cm3, 2.73 g/cm3,
and 2.81 g/cm3 for strong, moderate, weak, and unweathered respectively. The average bulk density for the Mineral Resource is 2.72 g/cm3.
6. Open Pit Mineral Resources are defined within an optimized pit shell with a pit slope angle of 46⁰ and includes a 100 m offse t from the highway for
mining and 500 m offsets from the highway for oxide and transition-fresh zones respectively where blasting may be required. The pit has an overall
1:1.5 strip ratio (waste: mineralized material).
7. All prices are in US$ currency.
8. Graphite product pricing parameters used in pit optimization include: $980/t bulk concentrate (94.4% to 98.4% total carbon), $3,500/t purified
flake/99.95% (micronized, 8 um), $9,500/t CSPG (18 um), and $11,500/t CSPG (8 um). Revenue assumptions are based on assumed sales of 3% bulk
concentrate, 19% purified flake (micronized, 8 um), 63% CSPG (18 um), and 15% CSPG (8 um).
9. Costs used in pit optimization vary based on redox state and location and include: waste mining at $2.23/t to $3.10/t moved p lus an incremental
mining cost of $0.06/t to $0.07/t below the base elevation (250 or 270 masl) and $2.20/t to $3.25/t for miner alized material processing plus an
incremental mining costs of $0.03/t to $0.07/t below the base elevation (250 or 270 masl). The processing cost varied by redox state with processing
at $11/t to $18.15/t processed, and G&A at $1.74/t processed.
10. Combined graphite recoveries (mill feed to final product) of 84.98% oxide, 84.98% transition, and 86.10% fresh material were applied. Upgrading of
the bulk concentrate to finished products used a 94% recovery.
11. Open Pit Mineral Resources are reported at a cut-off grade of 0.90 % Cg for oxide and transition material and 1.37 % Cg for fresh material within the
optimized pit shell. The cut-off grade reflects the marginal cut-off grade to define reasonable prospects for eventual economic extraction by open pit
mining methods.
12. Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
13. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Mineral Resource tonnages are rounded to the nearest
100,000.
Strategic Production Plan
The strategic plan for the Company is to have two mines producing a total of approximately 100,000 tpy of high-
quality NFG concentrates and a value-add plant in Mobile, AL producing a total of approximately 61,800 tpy of
high-value, upgraded, transformed graphite products, including 38,000 tpy of CSPG. The production plan is
presented in Figure 1 below.
Figure 1: Phased, Modular Strategic Production Plan
Mine and Concentrator (Coosa County, AL)
Past Producer: The BamaStar Project is located within the Alabama Graphite Belt (“AGB”) and covers the
historical Ceylon Graphite Mine. The AGB is a 112 km (70 miles) long, northeast-trending belt in the Clay, Coosa
and Chilton counties in Alabama. By 1906, there were several mines i n operation and by 1913, the graphite
industry was well established in central Alabama. The end of World War I and the resumption of foreign imports
depressed prices and the Alabama graphite industry dwindled to seven operating plants in 1920. In 1929, the
Ceylon Graphite Company in Coosa County was shut down.
Open Pit Mining with At-Surface Mineralization: Open pit mining is the proposed mining method with the initial
6 years focused on oxide material. As time passes, the mining will extend into transition and fresh rock materials.
The mine schedule consists of 42.3 Mt of mill feed grading 2.11% Cg (diluted) over a processing life of 19 years.
Open pit waste tonnage totals 66.5 Mt and will be placed into various waste storage areas together with filtered
tailings. The overall open pit strip ratio is 1.6:1 of waste: mill feed. The mine schedule utilizes open p it mining
areas to supply mill feed up to a maximum of 1.3 Mtpy for Phase 1 and 2.6 Mtpy for Phase 2 to the mill facility.
Excellent Existing Infrastructure in Mining District: The BamaStar Concentrator Plant is located near the open
pit mine and US HWY 280. To reduce initial capital cost and operating cost estimates, the phased, modular plant
is designed to produce 25,000 tpy of NFG concentrate processing oxide material during Phase 1 and an additional
25,000 tpy in Phase 2 processing the more compact material. Phase 2 has a similar design flowsheet to Phase 1,
but with additional grind capacity to process the more compact materials coming from the mine.
Simple, Proven Flowsheet with Excellent Recoveries : A metallurgical process development culminated in a
flowsheet producing an average recovery of 90% and concentrate grades ranging from 94% graphitic carbon
(“Cg”) for hard rock mill feed to >98% Cg for oxide mill feed. The BamaStar Mine and Concentrator Plant was
developed in a modular, phased approach using a simple flowsheet with established and proven mineral
processing technologies.
The run-of-mine (“ROM”) material will be transported to the ROM stockpile. A front -end loader will feed the
ROM material on a coarse mineral sizer followed by a fine mineral sizer. The crushed fine feed will be ground in
a semi-autonomous grinding (“SAG”) mill. The SAG mill discharge will be screened on a vibrating screen, and the
oversize recycled to the SAG mill. The undersize will be pumped to the cyclones. The SAG mill will operate in
closed-circuit with cyclones. The cyclone overflow will gravitate to the rougher flotation, and the underflow will
return to the SAG mill. Most of the liberated graphite will be recovered at the rougher stage. The standard
flotation reagents used will be diesel oil and methyl isobutyl carbinol (“MIBC”). The rougher concentrate will be
upgraded further in six cleaning stages to produce a high -grade graphite concentrate. The rougher concentrate
from the first cleaning stage will be processed in a polishing mill using ceramic grinding media to scrub off gangue
minerals from the flakes. Similarly, the graphite concentrates from the second and third cleaner flotation will be
treated in stirred media mills (“SMM”) using ceramic grinding media. The third cleaner concentrate will be
upgraded in the fourth, fifth and sixth cleaner flotation stages. The rougher tailings and the cleaner tailings from
the first to the fourth cleaner flotatio n stages will be subjected to solid liquid separation in a tailings thickener.
Thickened tailings will be dewatered further in a disc filter to produce filtered tailings and sent to the co-disposal
waste storage facility. The filtered tails will allow for approximately 80% of the process water to be recycled.
The final graphite concentrate from the sixth cleaner flotation stage will be dewatered in a filter press followed
by a rotary dryer to reduce the moisture content to less than 0.5% w/w. The dried graphite concentrate will be
screened to produce +150 µm (+100 mesh) and -150 µm (-100 mesh) products and bagged in a bagging system.
The simplified testwork flowsheet for Phase I plant is presented in Figure 2. The Phase II plant will include a
replication of the Phase I flotation circuit plus a ball mill in the comminution circuit.
Figure 2: Phase 1 Simplified Testwork Flowsheet
Figure 3: Phase 2 Simplified Testwork Flowsheet
Value-Add Plant (Mobile, AL)
Dorfner Anzaplan GmbH (“ANZAPLAN”), a firm specializing in testing and designing facilities for converting NFG
into value-add products, such as battery anode material, received 4 kg (8.8 lb) of NFG derived from BamaStar and
successfully purified 2 kg using Hydrofluoric and Hydrochloric Acid to a Fixed Carbon (“FC”) content of ≥99.95%
from the NFG concentrate, which had a FC content of 93.47%, thereby confirming the suitability of the graphite
from BamaStar for achieving battery-grade anode purity.
Subsequently, 1 kg of the purified NFG was micronized, spheronized and coated with a standard commercial
carbon pitch at a US independent laboratory, and the resulting CSPG was transported to a US battery design
laboratory for slurry design, as well as coin cell and pouch cell performance testing. The BamaStar CSPG was
thoroughly characterized, investigating the active anode material's rheological, mechanical and electrochemical
properties for performance testing. All downstream transformational work and as sociated electrochemical
testing were performed by an independent battery laboratory service provider in North America, under the direct
supervision of South Star and the technical consultants.
The following outlines the industry-indicative process workflow utilized to transform the purified BamaStar NFG
into battery-ready CSPG:
• Micronization: sizing of the purified BamaStar NFG was achieved via an industry-standard conventional air-
milling process;
• Screening: The micronized, purified material was then screened, via industry -standard sieve screening, to
achieve the targeted particle sizes for subsequent spheronization (shaping);
• Shaping and Classification: The screened material was then fed into a commercial spheronizer, in order to
shape the material into potato-shaped ovoids resulting in spheronized graphite (“SPG”). The unspheronized
purified graphite was segregated from the SPG resulting in the purified, micronized, graphite byproduct;
• Coating: The BamaStar SPG was then pitch (carbon) coated (or “surface treated”) to produce the finished,
battery-ready CSPG. The thin layer of petroleum based commercially available pitch coating was achieved
through the application of soft-carbon precursor, resulting in the curing and polymerization of the exterior
coating on the surface of the SPG. This CSPG is the battery-ready anode material suitable for electrochemical
performance testing in Li-ion battery cells.
Figure 4: Simplified Mass Balance for Value-Add Plant Module
Phase 1 will process 21,300 tpy NFG from Santa Cruz and BamaStar. Subsequently Phase s 2 and 3 will each
process 21,300 tpy NFG from BamaStar Mine and Concentrator. All midstream and downstream transformational
technologies and processes, including all associated equipment and consumables (including reagents) for the
proposed value-add plant are state-of-the-art and well-established industry standards utilized by global leaders
in commercial graphite processing and active anode materials manufacturing. South Star is proposing to only
incorporate off-the-shelf equipment and technologies that are commercially available, accepted and expected
by all major potential battery clients. No new, unproven or proprietary technologies and/or processes are being
proposed, nor is there any new IP relating any aspect of the value-add plant as presented in the PEA.
Each phase or module of the value-add plant is designed to produce 12,600 tpy of CSPG, comprising Medium
CSPG and Fine CSPG products, with a FC content of ≥99.95%. In addition, the Anode Plant will produce an
uncoated SPG fines by-product at 8,000 tpy. The nominal design of the Anode Plant is based on a NFG feed rate
of 21,300 tpy per expansion phase, containing an FC content of ≥95.0%. The NFG is purified in the Purification
Plant to produce 20,000 tpy of purified NFG with a FC content of ≥99.95%. This is fed to the Spheronization Plant
where the NFG is first micronized followed by spheronization. The spheronization consists of two stages to yield
10, 000 tpy of Medium SPG and 2,000 tpy of Fine SPG. The purified spheroidized product is fed to the coating
plant, which after adding pitch tar, yield s 12,600 tpy of battery -grade, active anode, CSPG product with a FC
content of ≥99.95%.
Figure 5: Simplified Process Flowsheet for Value-Add Plant Module
Electrochemical Testing Results
The battery -ready BamaStar CSPG produced at the US Process Lab was delivered to US Battery Labs, an
independent laboratory located in the US, which specializes in battery materials characterization, building Li-ion
battery cells (both coin and pouch -cell f ormats) and battery testing to assess battery electrochemical
performance. The BamaStar CSPG was subject to rheological studies and electrochemical performance test work
in both coin-cell and pouch-cell Li-ion battery formats.
Tested Both Coin and Pouch Cells: The initial characterization of the BamaStar CSPG included the mixing and
casting of graphite anode slurries to produce electrodes (specifically, anodes) to commence half -cell testing in
order to determine basic material electrochemical performance metrics , e.g., irreversible capacity loss (ICL or
first-cycle loss), reversible capacity, resistance, and Coulombic efficiency. Ultimately the purpose of building and
testing Li-ion batteries with BamaStar CSPG is to determine the CSPG’s initial electrochemical p erformance, in
comparison to a commercial reference material.
Good Rheological Design and Application to Substrata: In terms of rheology, the BamaStar CSPG mixed perfectly
in a conventional commercial anode slurry recipe, using industry -standard conductive additives, binders and
solvents. The initial electrochemical performance test results of BamaStar CSPG demonstrate capacity and first-
cycle loss that meets or exceeds the performance of Tier -1 commercial NFG -based comparable battery -ready
CSPG products.
Positive Electrochemical Performance: The BamaStar CSPG performed well as battery anode materials and
experienced a first-cycle loss of 7% and an average reversible gravimetric capacity of 361 mAh/g (approaching
the theoretical maximum of 372 mAh/g for natural graphite). In pouch -cell testing, the BamaStar CSPG showed
significant potential capabilities for fast-charging Li-ion battery applications, with stable cycling up to 3C. These
are excellent initial test results, given that this preliminary performance testing program was non-optimized and
is currently ongoing.
No Proprietary Equipment/Technology or IP Proposed to be Utilized: No aspect of the BamaStar materials
characterization, rheological studies, battery construction and electrochemical performance testing is
proprietary or confidential. Further, all technical work conducted on the BamaStar CSPG is indicative of the
evaluation and qualification test work that any potential commercial Li-ion battery customer would undertake to
assess a CSPG.
Figure 6: Electrochemical Results Coin Cells Charging Data
Figure 7: Electrochemical Results Coin Cells Discharging
Environmental Permitting/Licensing Strategy
South Star has initiated an environmental geochemistry testing program to assess if BamaStar has water quality
risks, including a s eries of static and kinetic tests on waste rock, mineralized materials and tailings. The testing
program has determined that the waste rock is potentially acid consuming (“PAC”) or non -acid generating
(“NAG”), while it also determined that the tailings product is potentially acid generating (“PAG”) due to the
presence of sulfide minerals (primarily pyrite). However, the acid-consuming potential of the waste rock exceeds
the acid-generating potential of the tailings by over three times, and the studies have determined that the best
solution to mitigate acid rock drainage (“ARD”) and metal leaching (“ML”) risk is to co -dispose PAC waste rock
with PAG tailings. This “waste blending” mitigation strategy is a widely applied best practice for mitigating
geochemical risk.
Similarly, metals leaching potential was also tested on a representative range of rock types encountered at
BamaStar as well as on tailings samples. Geochemical tests confirm that the waste rock at site has little metal
leaching risk. Mine tailings showed a potential for metal leaching, which requires further study and sampling.
Once again, based on the existing data set, it appears that co -disposal is a cost -effective and viable solution to
mitigate the risk of metals leaching. Following best-practice, long-duration kinetic testing to determine the ARD
and ML risk is ongoing.
The mine and concentrator are on private land and private mining claims. The PEA will be used as the basis for
upcoming permitting efforts for both the mine and concentrator, as well as the value-add plant. In summary, the
mine and concentrator will need various state and federal permits, potentially including the National Pollution
Discharge Elimination System (“NPDES”) permit for site -wide excess water discharge, and the US Army Corp of
Engineers(“USACOE”) 404 permits for impacts to waters of the state and/or wetlands.
The value-add plant is proposed to be constructed in phases on an existing industrial site that is already zoned
for heavy industrial and has excellent existing infrastructure, utilities and is sited near the Port of Mobile and the
Intermodal Transportation facility. Similarly, the environmental permitting process for the value-add plant in
accordance with Alabama environmental regulations and laws will commence in earnest, based on the results of
the PEA and ongoing negotiations with the State of Alabama a nd local counties. Generally, it is anticipated that
all permits can be secured with the proposed approach and within the BamaStar development timeline.
The BamaStar Project requires a closure bond administered by the State of Alabama. A reclamation plan and a
closure cost estimate are included in the PEA.
Table 2: Permitting Matrix and Schedule
CAPEX
This section provides an overview of the Capex estimates for open pit mining of the BamaStar deposit, as well as
the construction of a process plant, waste storage facilities, which includes co -disposal, and associated
infrastructure. According to the PEA design, it is expected that each phase of the process plant would have an
average capacity of 1.3 Mtpy for the initial phase, producing 25,000 tpy of NFG concentrate, and Phase 2 will
have a similar throughput to double the production capacity to 50,000 tpy of NFG concentrate. The mine will
have an estimated life of 19 years. Phase 1 mine and conce ntrator are scheduled to be online and producing in
2027, and Phase 2 is constructed in 2030 and producing in 2031. The mine, process plant and associated
infrastructure Capex estimate are based on an Association for the Advancement of Cost Estimation (“AACE”)
Class 5 estimate has an accuracy range of +50%/-35%. Total initial Capex for the Phase 1 and 2 of the mine and
concentrator will be US$96.9M and US$57.2M, respectively. Sustaining capital during the 19-year mine life is
estimated to be US$32.7M. The Capex estimates for the value-add plant are based on an Association for the
Advancement of Cost Estimation (“AACE”) Class 5 estimate, with an accuracy range of -20 % to -50 % (low) and
+30 % to +100 % (high). Each module of the value-add plant is estimated to cost US$269.0M.
Table 3: BamaStar CAPEX and Sustaining Capital
OPEX
Average LOM Mining OPEX is US$ 23.49/tonne of mill feed, and average LOM for purified micronized graphite
(“PMG”) is US$1,013/t of PMG No 1. and US$2 ,542/tonne of CSPG. The average LOM total cost of value-add
product is US$2,625/tonne of product.
Table 4: BamaStar OPEX
Economics and Sensitivities
Table 5: BamaStar PEA Economic Summary & Highlights
Description Unit LOM
Preproduction Capex + Contingency US$M 365.9
Subsequent Capex + Contingency US$M 595.2
Sustaining and Closure + Contingency US$M 117.3
Average Gross Revenue US$M/yr 518.8
Total Gross Revenue US$M 9,857.2
Total Operating Costs US$M 2,471.7
Average LOM Operating Margin % 72.0
Pretax Total Cashflow US$M 5,985.8
Total Taxes US$M 1,657.9
After-Tax Total Cashflow US$M 4,276.9
Average LOM Cashflow Margin % 43.7
Pre-tax NPV 8% US$M 2,368.8
Pre-tax IRR % 34.8
After-tax NPV 8% US$M 1.598.3
After-tax IRR % 27.4