South Star Mining Announces Non-Brokered Private Placement Financing
South Star Mining Announces Non-Brokered Private Placement Financing
Toronto, ON, March 26, 20 20 – South Star Mining Corp. (‘South Star ’ or ‘the Company ’) (TSX-V: STS) (OTC:
STSBF) is pleased to announce that it intends to complete a non -brokered, unsecured convertible debenture
placement for estimated aggregate gross proceeds of C$ 250,000 (“Offering”). Company insiders will take a
large percentage of the placement. Net proceeds from the Offering will be used for advancing project
development, approval of licensing, commercial agreements, project finance and general working capital
requirements for the Company.
The placement will consist of a convertible debenture that will mature in 12-months from the issuance date and
have an annual interest rate of 10% compounded monthly , with principal and interest payable on maturity.
The debenture will be issued in a minimum amount of C$ 15,000, with the principal amount of each debenture
being convertible into 300,000 units on maturity , at the option of the h older. Each unit will consist of 1
common share and a one common share purchase warrant at an exercise price of C$0.06 for a period of 3 years
from the date of issue.
Interest may also be converted into units, at the option of the Company, at a price per unit which equals the
greater of the Market Price (as that term is defined in the policies of the TSX Venture Exchange) on the date the
accrued interest becomes payable or the volume weighted average trading price of the Company’s common
shares on the Exchange for the 10 consecutive trading d ays preceding the date the accrued interest becomes
payable (the “Interest Conversion Price”). Each unit acquired on conversion of accrued interest will consist of 1
common share and a one common share purchase warrant at an exercise price which is C$0.05 greater than the
Interest Conversion Price, for a period of 3 years from the date of issue.
The securities will be subject to (a) a four month hold period from the date of closing ; and (b) approval by the
TSX Vent ure Exchange. The Offering remains avail able to existing shareholders of the Company and all
Warrants issued under the Offering are subject to an acceleration clause. Minimum investment amount in the
Offering is C$15,000. See below for further details.
It is expected that the Offering will close on April 9th, 2020 (“Closing Date”).
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 followin g 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.
The Offering has been made available to existing shareholders of the Company who, as of the close of business
on March 25, 2020, 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 o ther
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 Requiremen t 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 chan ge about the Company t hat has not been
generally disclosed.
In connection with the private placement, the Company propose s to issue Units to directors, officers and
insiders of the Company. As a result, the private placement constitutes a related party tr ansaction 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 selective acquisition and development of near-term mine production
projects in Brazil to maximize shareholder value. STS has an experienced executive team with a strong history
of discovering, developing, building and operating profitable mines in Brazil.
The Santa Cr uz Graphite Project is located in Southern Bahia in the third largest graphite producing region in
the world with over 70 years of continuous mining. The Project has at surface mineralization in friable
materials, and successful larg e-scale pilot plant te sting (>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
infrastructure and logistics, South Star is carrying its development plan towards production projected at the end
of 2020.
To learn more, please visit the Company website at http://www.southstarmining.ca.
On behalf of the Board,
Mr. Richard Pearce
Chief Executive Officer
Email: [email protected]
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]
Mr. Eric Allison
Director
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 statements" within the meaning of applicable securities
legislation. Forward -looking statements relate to i nformation 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 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 risk s associated with mini ng 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 feasibili ty studies; the uncert ainty 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 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 statemen ts are made as of the date hereof and the 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.