South Star Mining Receives Debt Financing Pre-Approval for C$7.5 million and Environmental License Extension
South Star Mining Receives Debt Financing Pre-Approval for C$7.5 million and
Environmental License Extension
T o r o n t o , O N , O c t o b e r 5 , 2 0 2 0 – South Star Mining Corp. (‘South Star’ or ‘the Company’) (TSX-V: STS) (OTC:
STSBF) is pleased to announce the pre-approval of R$29.7 millio n (approx. C$7.5 million) in debt finance from
Banco do Nordeste (‘the Bank’), a leading regional Brazilian d evelopment bank, as well as the approval of the
renewal of the simplified environmental license for a period of 4 years for the Phase 1 Pilot Plant Operations
(5,000tpy of concentrate) for the Santa Cruz Graphite Project ( ‘the Project’) in Bahia, Brazil. The C$7.5m
financing comprise 100% of the Project debt financing requirements.
The renewed environmental license is in the process of being su bmitted to the regulatory agency (ANM) to
support the trial mining license (GU) and is anticipated to be the final approval required before a construction
decision is made.
South Star CEO Richard Pearce commented, “We are extremely excited about the recent developm ents of the
Project and continue the drive towards 2021 production. The ren ewal of the environmental license for 4 years
was the last hurdle requested for the trial mining license. All the requested Project documents have been
submitted to the ANM, and we anticipate the approval of the GU shortly. This is the final license required to
start the construction. The pre-approval of 100% of the debt fi nancing requirements and the favourable terms
reinforce the strength of the Project economics. I would like t o thank our current shareholders and all the
Project stakeholders for their continued support and look forward to an exciting 2021.”
DEVELOPMENT BANK DEBT PRE-APPROVAL
The Company has received pre-approval for 100% of the Project d ebt financing requirements from Banco do
Nordeste, the largest regional development financial institutio n in Latin America responsible for covering the
Project region. The credit committee has pre-approved the following terms:
x R$29.7 million (~C$7.5 million) of debt;
x Required Company equity match of R$7 million (~C$1.5 million);
x Annual Interest rate of approximately 5.3%; and
x Guarantees, grace period and repayment terms to be negotiated, pending technical review.
The technical engineering design documents have been submitted to the Bank’s technical review board and are
currently being evaluated. Technical review is expected to take 4 5 - 6 0 d a y s , a c c o r d i n g t o t h e B a n k ’ s n o r m a l
approval process. Once the technical review has been completed and approved, the Project documents will be
returned to the credit committee for final negotiations and clo sing. Debt terms and conditions may vary
depending on the evaluation of the technical review and final credit analysis.
About South Star Mining Corp.
South Star Mining Corp. (TSX.V: STS) is focused on the selective acquisition and development of near-term mine
production projects in Brazil to maximize shareholder value. ST S 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 Southern Bahia, t he 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 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 recov eries and 95-99% Cg. With excellent
infrastructure and logistics, South Star is planning the commis sioning of the 5,000 tonne per year pilot plant for
the end of 2021.
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 t hat 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 obta in
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 regulation and liability; the po tential for delays in exploration or development activities or
the completion of feasibility studies; the uncertainty of profi tability; 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 exploration, development or mining r e s u l t s w i l l n o t b e c o n s i s t e n t w i t h t h e C o m p a n y ' 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 elsew here 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.