STS.V · 2021-05-20 12:00:00

South Star Mining Corp. Announces Positive Purification Results from Its Advanced Graphite Battery Metals and Technology Testing Program

Metallurgy & Processing

NEWS RELEASE

South Star Mining Corp. Announces Positive Purification Results from Its Advanced

Graphite Battery Metals and Technology Testing Program

Toronto, ON, May 20, 2021 – South Star Mining Corp. ( “South Star” or the “Company”) (TSXV: STS)

(OTCQB: STSBF) is pleased to announce the positive purification results using a thermal process from its

advanced testing program with its technology partner, the United States laboratory (“US Lab”)1.

Thermal purification is a proven, commercially -viable technology for improving the quality of

concentrate graphite for a broad range of value-add applications, including lithium-ion batteries (“LiB”).

It also represents a compelling alternative to purification by acid leaching with hydrofluoric acid, that is

the most common practice in use today.

Richard Pearce, President and CEO of South Star , commented: “ We are pleased to announce these

exciting results. The thermal purification process has resulted in 99.999 3 wt% C without any of the

environmental, health and worker safety issues associated with hydrofluoric acid. Yet another industry

specialist has indicated that the Santa Cruz graphite concentrate is one of the best materials they have

analyzed and far exceeds typical industry standards. The results highlight the high- quality, high-purity

and low-contaminate nature of South Star’s concentrates and purified graphite. The offtake agreements

we recently announced highlight the improving market conditions and reinforce the Company’s market

opportunity.

We will be able to offer an extremely high -quality product to a broad array of possible markets and

sectors. The ore is generally easy to concentrate and purify and will allow us to sell our entire production

at attractive margins. As part of the scope of the ongoing advanced testing program, South Star will

continue to improve our understanding of the inherent material characteristics, and then set up a

commercial plan that maximizes our pricing and profits across the entire basket of products. The testing

program is now advancing towards production of the battery-grade coated spherical graphite (cSPG).

We are quickly building South Star into the first new graphite operation in continuous commercial

production in the Americas in more than a decade.”

1 The United States laboratory (“US Lab”) specializes in advanced graphite materials and value- add testing for battery and

non-battery applications. The US Lab company name has not been published for the purposes of preserving a commercial

advantage of South Star Mining in the marketplace.

Flake graphite concentrate from the Santa Cruz Graphite Project (the “Project” or “Santa Cruz”) with an

average carbon content of 95.3 wt% and moisture level of 0.075 wt%, was upgraded to 99.9993 wt% C,

which are excellent results suitable for a broad range of LiB and value-add applications. In addition, the

results indicate extremely pure graphitic carbon with high-yields, low-levels of contaminants and ease

of upgrading.

In particular, aluminum, boron, iron , sulfur, and silicon were at extremely low -levels and well -below

standard industry requirements. The ease with which impurities were removed from the carbon

structure also suggests that the Santa Cruz graphite predominantly contains impurities concentrated on

the surface of its particles as opposed to being intercalated i n the form of gangue inside the flake

graphite macromolecules.

With these excellent results, purified graphite from the Project has successfully demonstrated to

possess a purity significantly greater than that required for typical applications in advanced battery

systems, where the normal criteria are in the order of 99.95-99.98 wt% C. The results also reinforce that

purified graphite from the Project is suitable for other high value-add applications that require very-

high levels of purity with low-levels of contaminants, such as nuclear. Typical market pricing for these

products can range from between US$25,000-US$40,000 per tonne.

The Company also wishes to report on the favourable removal of some high-value elements present in

mineral ash, that is the waste by-product of the purification process. The elements can generally be

subdivided into precious metals and rare earth elements. The first group in the case of Santa Cruz

contained appreciable amounts of the precious metals, such as silver, gold, palladium, and platinum.

The second group, rare earth elements, contained the notable concentrations of the following:

scandium, yttrium, lanthanum, cerium, praseodymium, neodymium, samarium, europium. South Star

will publish results of these studies in a separate news release when finalized. It should be noted that

as a result of purification, all these elements along with other mineral impurities have been successfully

evaporated off the graphite surface and transfe rred into the wet scrubber where they were

concentrated back in the gypsum by-product of off-gas treatment.

Detailed Test Results

South Star used its concentrate grade purity graphite, which had total graphitic carbon content of 95.3

wt%, moisture level of 0.075 wt%, and particle size distribution as depicted by the blue bars in Figure 1.

As the graphic shows, the distribution of Santa Cruz concentrate consists approximately of three equal

proportions: the first representing +50 to +30 mesh flake, followed by +100 to +60 mesh, and f inally -

100 mesh. The same graph shows particle size distribution by screen analysis of thermally purified

material represented as the orange bars in Figure 1. As one can see, purification did not cause a change

in particle size distribution, which cannot be explained by differences in screening, meaning that no

significant damage to the graphite particles occurred during the process.

Figure 1. Particle size distribution of concentrate grade (blue) and purified (orange)

South Star graphite, obtained by screen analysis.

The surface area of South Star’s concentrate grade graphite was shown to be reduced by purification.

Figure 2 shows surface area decreasing from 3.83 m2/g in concentrate grade material to 2.41 m2/g after

thermal purification. This is indicative that fine mineral impurities representing submicron particles with

high surface area have been removed from the purified graphite product.

Figure 2. Surface area [m2/g] of South Star Mining Corp.’s graphite before

(concentrate grade) and after thermal purification.

Table 1. Mineral impurities of concentrate grade and purified

South Star graphite obtained by Solid ICP.

Furthermore, Table 1 compares elemental mineral -impurity concen trations before and after

purification. The data presented are developed by method of solid ICP, which is known for its high

accuracy in determining mineral impurities to ppm concentrations, without having to perform acid

digestion of the graphite sample. Instead, the dry sample is analyzed as -is and is consumed entirely in

the course of analysis. This method is believed to be more accurate than classic ICP by acid digestion

and provides a comparable result to that of the industry premium GDMS method.

We highlight the following notable observations produced by solid ICP analysis: a luminum

concentration was reduced by five orders of magnitude while silicon concentration was reduced by four

orders of magnitude. Iron concentration also decreased five orders of magnitude from 10,000 ppm ( 1

wt.%) to the level of 0.63 ppm, a n extremely low value for iron concentration in the industry. Finally,

sulfur decreased from 49 ppm in the precursor to 0.344 ppm in the purified product. The ease with

which impuritie s were removed from the carbon structure suggests that Santa Cruz graphite

predominantly contains impurities concentrated on the surface of its particles as opposed to being

intercalated in the form of gangue inside the flake graphite macromolecules.

The purity of South Star ’s material was measured using the industry -standard loss-on-ignition test. In

accordance with this test, a known mass of graphite is placed in either an aluminum ceramic crucible or

a platinum crucible and is heat treated in a muffle furnace at 950˚C for a specific amount of time. This

results in complete evaporation of all carbon, while any materials left behind are attributed to ash

content. While the concentrate grade precursor to thermal purification had average purity of 95 wt% C,

the purity of graphite after thermal purification as measured in aluminum crucibles exceeded that of

100%, indicating that a ceramic crucible method did not impart the desired level of accuracy to

determine purity. The same test was repeated in a platinum crucible with a larger sample mass, and this

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produced a purity result of 99.9993 wt% C. The change in purity can be visualized in Figure 3, while the

related moisture content is shown for reference in Figure 4.

With these results, purified Santa Cruz graphite has been demonstrated to possess a purity significantly

greater than that required for applications in advanced battery systems. It is believed that the passing

criterion for the latter market is 99.95-99.98 wt% C. The LOI result suggests that Santa Cruz graphite can

be qualified as nuclear -grade graphite based on its LOI

purity and judging from the concentration of boron in its

structure. Nuclear grade graphites, which range in their

sales pricing between US $25,000-$40,000 per tonne must

meet certain criteria, which includes purity of 99.99 wt% C

and a concentration of boron less than 2 ppm. In the case

of Santa Cruz graphite, even the concentrate grade

material had a naturally -occurring extremely -low

concentration of boron at 1.8 ppm, that is seldom seen in

the natural graphite industry for concentrate grade

material. After purification, the concentration of boron was

reduced to 0.43 ppm, and this change is visualized in Figure

The resultant particles with a purity of 99.9993 wt% C are depicted in Figure 6 to Figure 11 by a series

of scanning electron microscope images at various mesh cuts. The images show +35, +50, +70, +100,

+200, and +325 cuts.

Figure 3. Purity [wt% C] of South Star

graphite before (concentrate) and after

thermal purification.

Figure 4. Moisture content [wt%] of South

Star graphite before (concentrate) and after

thermal purification.

Figure 5. Concentration (ppm) of boron

impurities of South Star graphite before

(concentrate) and after thermal purification.

1.80

0.4309

0.00

0.50

1.00

1.50

2.00

Concentrate grade Purified

Concentration, ppm

Grade of Santa Cruz Graphite

Boron

Figure 6. SEM image of +35 mesh thermally

purified South Star graphite, at a magnification

of x45.

Figure 7. SEM image of +50 mesh thermally

purified South Star graphite, at a magnification

of x150.

Figure 8. SEM image of +70 mesh thermally

purified South Star graphite, at a magnification

of x180.

Figure 9. SEM image of +100 mesh thermally

purified South Star graphite, at a magnification

of x350.

About South Star Mining Corp.

South Star Mining Corp. is focused on the selective acquisition and development of near -term

production projects in Brazil. S outh Star is driven to create fundamental value in the battery metals

sector for clients and investors with real projects that have strong int rinsic financial and operating

metrics, and that can be profitable throughout the resource cycle. S outh Star has an experienced

executive team with a strong history of discovering, developing, building and operating profitable mines

in Brazil.

The Santa Cruz Graphite Project, located in Southern Bahia, is the first of a series of battery metals

projects that will be put into production. Brazil is the second-largest graphite-producing region in the

world with more than 80 years of continuous mining. The Project 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 carrying its development plan towards Phase

1 production projected in Q4 2022, pending financing.

The Santa Cruz project is being developed in a phased approac h. Phase 1 operations for the 5,000 tpy

pilot plant operations are fully licensed, and the Company is preparing to start construction in

September 2021 with commercial production targeted for Q4 2022. Phase 2 operations will represent

a larger- scale conce ntration plant currently planned to produce between 25,000 to 30,000 tpy of

concentrate. The sizing of the Phase 2 plant could be increased depending on the successes of the Phase

1 operations, ongoing development of commercial relationships, and market conditions.

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.southstarmining.ca.

Figure 10. SEM image of +200 mesh thermally

purified South Star graphite, at a magnification

of x250.

Figure 11. SEM image of +325 mesh thermally

purified South Star graphite, at a magnification

of x600.

On behalf of the Board,

Mr. Richard Pearce

Chief Executive Officer

For additional information, please contact:

CHF Capital Markets

Iryna Zheliasko, Manager

Phone: 416-868-1079 x229

Email: [email protected]

Mr. Dave McMillan

Chairman

Email: [email protected]

Twitter: https://twitter.com/southstarmining

Facebook: https://www.facebook.com/southstarmining/

LinkedIn: https://www.linkedin.com/company/south-star-mining-corp/

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.

This news release and the Updated Technical Report contain references to inferred resources. The Report is preliminary in

nature and includes inferred mineral resources that are considered too speculative geologically to have the economic

considerations applied to them that would enable them to be c ategorized as mineral reserves.

FORWARD-LOOKING INFORMATION

The information contained herein 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 amounts not yet determinable. Any statements that express predictions, expectations, beliefs,

plans, projections, objectives, assumptions or future events or performance are not stat ements 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 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; ris ks 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; res ults 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 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 var y materially from those described in

forward-looking statements. Investors are cautioned against attributing undue certainty to forward- looking statements.

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