South Star Mining Announces Non‐Brokered Private Placement
South Star Mining Announces Non‐Brokered Private Placement
Toronto, ON, January 28, 2021 – South Star Mining Corp. (‘South Star’ or ‘the Company’) (TSX‐V: STS) (OTC:
S T S B F ) t o d a y a n n o u n c e s t h a t i t i n t e n d s t o c o m p l e t e a n o n ‐ b r o k e red private placement of Units (the “Private
Placement”) to raise C$1,300,000. Management and Company insid ers have committed to take a large portion
of the Placement.
The Private Placement will consist of 13,000,000 Units priced at C$0.10 per unit (the “Units”). Each Unit will
consist of one (1) common share and one (1) common share purcha se 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 3 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 Ve nture Exchange. The Private Placement will be
available to existing shareholde rs of the Company and all Warra nts issued under the Private Placement will be
subject to an acceleration clause. See below for further details.
Net proceeds from the Placement will be used for completion of the final design for Phase 1 construction
documents, advanced materials testing, commercial agreements, project finance and general working capital
requirements for the Company.
South Star CEO Richard Pearce co mmented: “We are grateful for t he continued support from our shareholders
and insiders that have been steadfast in their ongoing commitme nt to advancing the Project. With the recently
announced final approval of the mining license, we have largely de‐risked the Project and are ready to move
into the construction phase. We are excited to be added soon t o a short list of graphite producers and getting
into cashflow. Taking the Santa Cruz Project from concept to pa per to production gives our team a great deal of
satisfaction. We believe the phased approach to production we a re taking, with initial Phase 1 Pilot Plant (5,000
tpy of concentrate) and shortly thereafter Phase 2 Production ( 25,000 ‐ 30,000 tpy of concentrate), is a smart
way to allocate capital, control risks and create shareholder value. We can always scale up to meet growing
market demand as needed once we are in production and have cashflow.”
Acceleration Clause & Existing Shareholder Exemption and Investment Dealer Exemption
If over a period of 10 consecuti ve 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
c o m m o n s h a r e s o f t h e C o m p a n y o n t h e T S X V e n t u r e E x c h a n g e ( o r s uc h o t h e r s t o c k e x c h a n g e w h e r e t h e
majority of the trading volume occurs) exceeds $0.40 on each of those 10 consecutive days, the Company may,
within 30 days of such an occurrence, give written notice to th e 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 hol d e r s o f t h e W a r r a n t s w i l l h a v e 3 0 d a y s t o
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.
The Placement will be made available to existing shareholders o f the Company who, as of the close of business
on January 27, 2021, 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 reg istered as an investment dealer in the
jurisdiction. If the Company receives subscriptions from investors relying on the Existing Shareholder Exemption
exceeding the maximum Placement, the Company may adjust the subscriptions received on a pro‐rata basis.
The Company has also made the Placement available to certain su bscribers pursuant to BC Instrument 45‐536 –
Exemption From Prospectus Requirement for Certain Distributions Through an Investment Dealer (the
“ I n v e s t m e n t D e a l e r E x e m p t i o n ” ) . I n a c c o r d a n c e w i t h t h e r e q u i r e ments 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 re sult, the private placement con stitutes 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 form al valuation requirement on t he basis that the transaction is a distribution
of securities for cash, and on Section 5.7(1)(b) of MI 61‐101 f or an exemption from the minority shareholder
approval requirement, as the fair market value of the transacti on, insofar as it involves related parties, will not
be more than $2,500,000.
About South Star Mining Corp.
South Star Mining Corp. is focus ed on the selective acquisition and development of near‐term mine production
projects in Brazil to maximize sh areholder value. STS has an ex perienced executive team with a strong history
of discovering, developing, building and operating profitable mines in Brazil.
The Santa Cruz Graphite Project is fully licensed for Phase 1 operations (5,000 tpy concentrate) and is located in
Southern Bahia in the second largest graphite producing region in the world with over 80 years of continuous
m i n i n g . T h e P r o j e c t h a s a t s u r f a c e m i n e r a l i z a t i o n i n f r i a b l e materials, and successful large‐scale pilot plant
testing (>30t) has been completed. The results of the testing show approximately 65% of Cg concentrate is +80
mesh with good recoveries and 95‐99% Cg. With excellent infrast ructure and logistics, South Star is carrying its
development plan towards Phase 1 production projected in Q2 2022, pending financing.
This news release has been reviewed and approved by Richard Pea rce, P.E., a "Qualified Person" under National
Instrument 43‐101 and President and CEO of South Star Mining.
To learn more, please visit the Company website at http://www.southstarmining.ca.
On behalf of the Board,
Mr. Richard Pearce
Chief Executive Officer
For additional information, please contact:
CHF Capital Markets
Cathy Hume, CEO
Phone: 416‐868‐1079 x231
Email: [email protected]
Mr. Dave McMillan
Chairman
Email: [email protected]
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
The information contained herein contains "forward‐looking stat ements" 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 amounts 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 are subject to a variety of risks an d 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; r isks related to the outcome of legal proceedings; political
and regulatory risks associated with mining and exploration; ri sks related to the maintenance of stock exchange listings;
risks related to environmental r egulation and liability; the po tential for delays in exploration or development activities or
the completion of feasibility studies; the uncertainty of profitability; risks and uncertainties relating to the interpretatio n of
drill results, the geology, grade and continuity of mineral dep osits; risks related to the inherent uncertainty of production
and cost estimates and the potential for unexpected costs and e xpenses; results of prefeasibility and feasibility studies, and
the possibility that future expl oration, development or mining results will not be consi stent with the Company's
expectations; risks related to gold price and other commodity price fluctuations; and other risks and uncertainties related to
the Company's prospects, properties and business detailed 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 Company does
not assume any obligation to update or revise them to reflect n ew events or circumstances. Actual events or results could
differ materially from the Company's expectations or projections.