South Star Battery Metals Announces Closing of an Oversubscribed Non-Brokered Private Placement
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NEWS RELEASE
South Star Battery Metals Announces Closing of an Oversubscribed Non-Brokered Private Placement
Vancouver, Canada, July 14, 2023 – South Star Battery Metals Corp. (“South Star” or the “Company”) (TSXV: STS)
(OTCQB: STSBD), is pleased to announce that, subject to receipt of certain TSX Venture Exchange approvals
relating to one subscriber (discussed below), it has completed an oversubscribed non-brokered private
placement (the “Private Placement”) of units for total proceeds of C$ 4,522,948.45. Proceeds from the Private
Placement will be used for exploration, development, construction activities, corporate G&A and general working
capital requirements.
Richard Pearce, CEO of South Star, said, “ We once again successfully partnered with a strong, long -term
institutional investor familiar with Brazil, mineral resources and the battery metals sector. We are pushing hard
to accelerate drilling, test work and studies for our phased 5- to 7-year strategic vision of Santa Cruz and BamaStar
mines producing a combined 100,000 tonnes per year of high-quality graphite concentrates, and a vertically
integrated value-add plant in the southeast corridor of the U.S. We look forward to working closely with our
partners and are excited about the strong demand for the offering as we focus on delivering fundamental value
in the graphite sector with the first new production in the Americas since 1996.”
Private Placement
The Private Placement consists of 8,533,865 units priced at C$0.53 per unit (the “Units”). Each Unit consists of
one (1) common share of the Company and one (1) common share purchase warrant (“Warrant”). Each Warrant
entitles the holder to purchase one (1) additional common share of the Company at an exercise price of C$ 1.25
per share for a period of five years from the date of issue . The Warrants are subject to an acceleration clause
(described in more detail below) . The securities issued pursuant to the Private Placement will be subject to a
four-month hold period.
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”). In connection
with the Private Placement, the Company paid $27,825 in cash finder’s fees.
An aggregate of $3,908,158.52 of the private placement funds are being held in trust pending TSXV review and
clearance of a personal information form filed by a subscriber, who will become an insider of the Company upon
closing of the private placement through ownership of in excess of 10% of the Company’s issued and outstanding
common shares. Upon receipt of confirmation that the personal information form has been reviewed and cleared
by the TSXV, the Company will issue an aggregate of 7,373,884 Units to the subscriber and the subscriber’s funds
will be available to the Company. The balance of the 1,159,981 Units subscribed for under the private placement
have been issued and are subject to a four-month hold period ending November 15, 2023.
Acceleration Clause
The acceleration clause of the Warrants will provide that, i f, 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) exceeds C$2.50 on each
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day, the Company may, within thirty (30) days of such an occurrence, give written notice 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. Upon receipt of such notice, the holders of the Warrants will have thirty (30) days to exercise
their Warrants and any Warrants that remain unexercised will expire.
An officer of the Company participated in the Private Placement for an aggregate amount of $ 7,950. The
transaction with the officer constitutes a “related party transaction” as defined under Multilateral Instrument
61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on
the exemptions under section 5.5(a) and section 5.7(1)(a) fr om the formal valuation and minority shareholder
approval requirements of MI 61 -101, as the fair market value of the Units issued to the related part y and the
consideration paid by the related party under the Private Placement does not exceed 25% of Company’s market
capitalization, as determined in accordance with MI 61 -101. The Company did not file a material change report
in respect of the related party transaction at least 21 days before the closing of the Private Placement, as the
details of the participation by related party of the Company were not settled until shortly prior to closing of the
Private Placement.
ABOUT SOUTH STAR BATTERY METALS CORP
South Star Battery Metals Corp. is a Canadian battery metals project developer focused on the selective
acquisition and development of near-term production projects in the Americas. 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 will
be put into production. Bra zil 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 (>30t) has been completed. The results of the testing show that approximately 65% of Cg
concentrate is +80 mesh with good recoveries and 95%-99% Cg. With excellent infrastructure and logistics, South
Star is fully funded for Phase 1, and the 12 -month construction and commissioning are underway. Santa Cruz
will be the first new graphite production in the Americas since 1996 with Phase 1 commercial production
projected in Q 4 2023. Phase 2 production (25,000tpy) is partially funded and planned for 2026, while Phase 3
(50,000tpy) is scheduled for 2028.
South Star’s second project in the development pipeline is strategically located in Alabama in the center of a
developing electric vehicle, aerospace and defense hub in the southeastern United States. The BamaStar Project
is a historic mine active during World Wars I & II. A NI43-101 technical report with the maiden resource estimate
has been filed on S EDAR. Trenching, phase 1 drilling, sampling, analysis, and preliminary metallurgic al testing
have been completed. The testing indicates a traditional crush/grind/flotation concentration circuit that achieved
grades of approximately 9 4-97% Cg with approximately 86% recoveries. South Star is executing on its plan to
create a multi -asset, diversified bat tery metals company with near -term operations in strategic jurisdictions.
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 by Richard Pearce, P.E., a "Qualified Person" under National
Instrument 43-101 and President and CEO of South Star Battery Metals Corp.
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On behalf of the Board,
Mr. Richard Pearce
Chief Executive Officer
For additional information, please contact:
South Star Investor Relations
Email: [email protected]
+1 (604) 706-0212
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 amoun ts 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 det ailed 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
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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.