South Star Mining Files Positive Pre-Feasibility Study Results and Maiden Reserve Estimate for Santa Cruz Graphite Project
South Star Mining Files Positive Pre-Feasibility Study Results and Maiden Reserve
Estimate for Santa Cruz Graphite Project
Toronto, ON, March 18, 2020 – South Star Mining Corp. (‘South Star’ or ‘the Company’) (TSX-V: STS) (OTC:
STSBF), further to its Fe bruary 5, 2020 News Release, has filed a National Instrument 43 -101 technical report
dated March 18, 2020 and entitled "Updated Resources and Reserves Estimate and Pre-feasibility Study on the
Santa Cruz Graphite Project, Bahia, Brazil" (the "Report" or "PFS"). There are no material differences between
the mineral resources, mineral reserves or results disclosed in the Report and those disclosed in the Company's
February 5th, 2020 news release. The Report can be found unde r the Company's SEDAR profile at
www.sedar.com.
The PFS presents a two-phased approach to production with an after tax NPV5% of US$81.2M, an IRR of 35% and
a 4 -year payback. The study used the current average basket price of US$1,287 per tonne which was held
constant for the life of the project.
Phase 1 consists of a pilot plant with the capacity to produ ce 5,000t of concentrate per year, and the simple
layout includes a small open-pit processing plant with filtered tails technology, waste storage facility for co -
disposal of waste-rock and filtered tails and civil infrastructure. The goal of the Phase 1 operations is to test and
optimize the flowsheet, develop the key commercial relationships and optimize the production of products
demanded in the marketplace, given the inherent , high-quality nature of the conce ntrates produced to date.
Detailed engineering of the pilot plant was completed as part of the PFS.
Phase 2 is a larger plant with similar layout and techno logy, but wi th a capacity of 25,000t of concentrate per
year. It’s important to highlight that both Phases include the use of filtered tails technology and co-disposal of
tailings with waste-rock to avoid the requirement of a Tailings Storage Facility. This is essential in facilitating the
permitting process and decreasing the environmental footprint of the facility.
PFS Highlights
• Combined Maiden Proven & Probable (P+P) Reserve Estimate of 12.3M tonnes with strong conversion
of resource to reserves.
• The Mineral Reserve Estimate is listed below:
Mineral
Reserve
Estimate
Tonnage Cg In-situ
Graphite
(t) (%) (t)
Proven 3,989,635 2.49 99,340
Probable 8,318,795 2.35 195,490
Total P &P 12,308,500 2.40 295,400
Notes:
1) Mineral Reserves are as defined by the 2014 CIM Definition Standards for Mineral Resources and
Mineral Reserves.
2) Mineral Reserves are based on Mineral Resources (Published on July 8th, 2019) estimated using
ordinary kriging method and a three-dimensional block model using a cut-off grade of 0.75% and
1% Cg, depending on the modeled zones.
3) Numbers have been rounded.
4) Mineral Reserves have incorporated cut-off, pricing, costs, recovery & FX.
• Phase 1 Average Production of 5,000 tpy of 95% Cg Concentrate in Years 1 & 2
• Phase 2 Ramping up from 13, 500 tpy of 95% Cg Concentrate in Year 3 to an a verage production of
25,000 tpy in years 4-11
• Average Basket Price of Products of US$1,287/t
• Open-pit mining with strip ratio of 1.6 Life of Mine (LOM)
• 12-Year LOM
• Exchange Rate of R$3.95 to US$1.00
• Post-Tax NPV5% of US$81.2M and internal rate of return of 35%
• US$129M Post-tax Cash Flow LOM
• Payback Period of 4 years
• CAPEX & OPEX Parameters for Each Phase are listed below:
Parameter
Phase 1
(US$)
Phase 2
(US$)
Phase 1 & 2
(US$)
CAPEX 7.3M 27.2M 34.5
OPEX ($/t Concentrate) 604 386 396
• Sensitivity Analysis for NPV using CAPEX, OPEX, Sales Price and FX as follows:
The technical information contained in this news release pertaining to the Santa Cruz Graphite Project
has been prepared, reviewed and approved b y Luiz Eduardo Pignatari, a n independent qualified
person under National Instrument 43 -101–Standards of Disclosure for M ineral Projects ("NI43-101").
The qualified person has verified the information disclosed herein, including the sampling, preparation,
security and analytical procedures underlying such information, and is not aware of any signifi cant
risks and uncertainti es that could be expected to affect the reliability or confidence in the information
discussed herein.
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 Cruz Graphite Project is located in Sou thern Bahia in the third l argest graphite prod ucing region in
the wo rld with over 70 yea rs of continuous mining. The Project has at surface miner alization in fria ble
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 r ecoveries 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
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
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Exchange) accepts responsibility for the adequacy or accuracy of this press release.
FORWARD-LOOKING INFORMATION
The information contained herein contai ns "forward -looking statements" within the meaning of applicable secu rities
legislation. Forward -looking st atements relate to information that is based on assumptions of management, forecasts of
future results, and estimates of amo unts not yet determinable . Any statem ents that express predicti ons, 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 subj ect to a variety of risks and uncertai nties which could cause actual events or results to
differ from those reflected in the forward-looking statements, including, without limitation: risks relat ed to failure to obtain
adequate financing on a timely basis and on accep table terms; risks related to the outcome of legal procee dings; political
and regulatory risks associated with mining and exploration; risks related to the maintenance of stock exchan ge listings;
risks related to environmental regulation and li ability; the potential for delays in e xploration or development activ ities or
the completion of feasibility studies; the uncertainty of profitability; risks and uncertainties relating to the inte rpretation of
drill results, the geo logy, grade and continuit y of mineral deposits; risks related t o the inherent uncertainty of p roduction
and cost estimates and the p otential for unexpected costs and expenses; results of prefeasibility and feasibility st udies, and
the possi bility that futu re exploration, developme nt or mining results will not be consi stent with th e Company's
expectations; risks related to gold price and other commodity price fluctuations; and other risks and uncertainties related to
the C ompany's prospects, properties and b usiness detailed elsewher e in the Com pany'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 for ward-looking statements. Investors are ca utioned 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 new events or circumstances. Actua l events or results could
differ materially from the Company's expectations or projections.