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South Star Battery Metals Corp. is pleased to announce that it has entered into a binding Earn-in and Option Agreement for the Ceylon Graphite Project in Alabama with Hexagon Energy Materials Limited and U.S. Critical Minerals LLC a privately-held exploration company incorporated in the United States . Under the terms of the Agreement, South Star will have the right to earn-in to up to 75% of the Project.  The ...

South Star Battery Metals Corp. ("South Star" or the "Company") (TSXV: STS) (OTCQB: STSBF), is pleased to announce that it has entered into a binding Earn-in and Option Agreement ("Agreement") for the Ceylon Graphite Project ("Project") in Alabama with Hexagon Energy Materials Limited ("Hexagon") (ASX: HXG) and U.S. Critical Minerals LLC ("USCM"), a privately-held exploration company incorporated in the United States (see November 3, 2021 press release). Under the terms of the Agreement, South Star will have the right to earn-in to up to 75% of the Project.  The transaction is subject to the final approval of the TSX Venture Exchange (the " T SXV").

Richard Pearce , South Star's CEO, said "We continue to execute on creating a multi-asset, diversified battery metals company. Our goals continue to be to get Santa Cruz in production in 2022, and we are excited about bringing on the next scalable critical battery metals project in the pipeline in another important jurisdiction for the sector. The approved Infrastructure Bill in the US will provide a lot of opportunities. We will leverage all our technical and commercial experience from Brazilian graphite and move the Project forward quickly. The Southeast corridor of the US is transforming itself into an electric vehicle, clean-tech and defense hub, and the Project in Coosa County is right in the middle of the action. I would like to thank our partners for getting this done and look forward to working together in the coming years."

Hexagon's Managing Director, Merrill Gray , said: "We are really looking forward to working with the team at South Star under this Agreement on the Ceylon Graphite project, including seeing how South Star creates value for our combined shareholder base in practical, on the ground terms."

CEYLON GRAPHITE PROJECT

Currently, Hexagon owns 80% of the Project, and USCM with a small group of individuals own the remaining 20% of the Project.  The Project is located on the northeast end of the Alabama Graphite Belt and covers approximately 500 acres in Coosa County Alabama . The Project is a historic mine active during World Wars I & II.  The Ceylon Graphite mine historically targeted friable outcropping graphite mineralization, averaging approximately 3-5% graphitic carbon.  Mineralization is at surface, and the graphitic host rock was mined historically with shovels and excavators with no drilling and blasting required.


A comprehensive preliminary exploration program and bench scale process have been completed. Work completed to date includes:

  • Regional scale and local geologic and structural mapping and sampling program.
  • 29 trenches totaling 2,769 linear meters were dug to a maximum depth of approximately 2 meters. The trenches were mapped, logged and 765 samples plus standards and duplicates (5 per 100 samples) were analyzed.
  • 100 tonnes of bulk ore samples were collected from across the claims, and a bench scale process circuit using 10 representative samples was tested at GIRCU Laboratory in Guangzhou , China.  The testing indicated a traditional crush/grind/flotation concentration circuit achieved grades of approximately 96-97% with approximately 86% recoveries.  In general, approximately 75-80% of the ore concentrates (by mass) is -80 mesh material and the balance being +80 mesh material.  The ore was described as well liberated and easy to process.

FINAL EARN-IN TERMS

To satisfy the terms of the Agreement, South Star must complete the following:

  • The drilling, resource estimation and analysis needed to produce a NI 43-101 compliant Preliminary Economic Analysis (PEA) within three years.
  • Fund an annual minimum expenditure of C$250,000 ( C$750,000 total) to earn 75% of the project.
  • Extend or renew, as needed, the currently existing mineral leases and surface agreements on the Project to ensure they are valid for a period of a minimum of 12 months beyond the three-year term of the definitive earn-in period.
  • Upon satisfaction of the first three items listed above, South Star shall have the right, but not the obligation, to acquire 75% of the Project.
  • For a period of six months following the exercise of the 75% earn-in option ("Option Period"), Hexagon and USCM individually have the right, but not the obligation, to sell their remaining interest in the Project by selling for a payment of C$250,000 in South Star shares for the remaining 25% of Project.
  • During the Option Period, and expenditures will be shared pro rata. Failure by any party to pay their share shall result in a proportional dilution of interest in the Project.
  • Should South Star's interest in the Project increase to 90% or greater, STS shall have the right, but not the obligation, to purchase the entire remaining interest not owned or under its control.
  • Within six months of the Ceylon Graphite Project achieving Commercial Production ("Production Bonus"), STS shall make a payment of C$250,000 in STS shares. The Production Bonus shall be proportionately reduced to reflect any reduction in the remaining 25% interest held by the parties.

NEXT STEPS

South Star is currently developing plans and making preparations for the Phase 1 exploration program at the Project.  This initial work will include RC drilling to further define the extent and structure of the deposit and will be combined with additional field mapping and surface sampling.  This first phase is tentatively scheduled to begin early in 2022.  Subsequent phases will include diamond core drilling, bench and pilot scale metallurgy, preliminary resource estimation and engineering.  South Star will also continue to expand and develop the excellent relationships with the community, as well as with local, state and federal agencies, originally established by the Charge Minerals' team.

ABOUT South Star Battery Metals CORP

South Star Battery Metals Corp. is a Canadian battery metals project developer focused on the selective acquisition and development of near-term production projects in the Americas. South Star's Santa Cruz Graphite Project, located in Southern Bahia, Brazil is the first of a series of industrial and 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. Santa Cruz 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. South Star trades on the TSX Venture Exchange under the symbol STS, and on the OTCQB under the symbol STSBF.

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.southstarbatterymetals.com .

This news release has been reviewed and approved by Richard Pearce, P.E., a "Qualified Person" under National Instrument 43-101 and President and CEO of South Star Battery Metals.

On behalf of the Board,

Mr. Richard Pearce
Chief Executive Officer

For additional information, please contact:

CHF Capital Markets (IR Canada)
Cathy Hume , CEO
Phone: +1 416-868-1079 x251
Email: Cathy@chfir.com

RBMG – RB Milestone Group LLC (IR US)
Trevor Brucato , Managing Director
Email: southstar@rbmilestone.com

Mr. Dave McMillan
Chairman
Email: davemc@telus.net

Twitter: https://twitter.com/southstarbm
Facebook: https://www.facebook.com/southstarbatterymetals
LinkedIn: https://www.linkedin.com/company/southstarbatterymetals/
YouTube: South Star Battery Metals - YouTube

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 categorized 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 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 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; 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 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 new events or circumstances. Actual events or results could differ materially from the Company's expectations or projections.

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South Star Battery Metals

South Star Battery Metals

Overview

The green energy industry is booming. Unprecedented positive trends seen year after year present junior mining companies with exceptional growth potential as vital minerals like graphite and lithium needed to power alternative energies surge in demand.

Market research estimates that worldwide graphite output needs to increase by nearly 500 percent by 2050 in order to meet growing demand for energy storage. If you are an investor looking for exposure in this market, there is not better time to invest

South Star Mining (TSXV:STS, OTCQB:STSBF) is set to contribute to filling this global graphite demand. It currently operates its flagship Santa Cruz graphite project in the mining-friendly jurisdiction of Brazil. The project is nearing construction and  is slated for the first production in 2022.

“This is a production story, it’s not something that’s going to take years to come to life. We have 12 months of construction and commissioning already scheduled,” stated South Star CEO Richard Pearce.

The company operates in what is arguably the best region worldwide to be developing a new graphite project. Brazil currently produces upwards of 90,000 tonnes of graphite on an annual basis and has a significant internal demand for the product, which advantageously positions South Star as a first mover in the South American graphite production space. More than that, once in production, South Star will become the first new graphite producer in the Americas in a decade.

The flagship Santa Cruz graphite project sits in the second largest flake graphite producing district in the world. This robust project hosts the perfect storm of large flake ore mineralization and production quality concentrates of over 95 percent purity.

South Star has been quick to advance its flagship asset for production readiness. In October 2020 the Phase 1 environmental permit was approved and in December 2020, South Star released exciting news that it received the mining permit for its 5,000 tonnes per year (tpy) Phase 1 pilot plant. Permitting and licensing for Phase 2 operations are already underway and documents will be submitted in December 2021.  This should advance the Phase 2 schedule by approximately 12 months.

Plans for 2021 include working through the plant’s detailed design and engineering process in the first half of the year and commencing construction in the second. Leveraging the rapidly growing graphite demand and positive market outlook, South Star aims to become a significant producer in the battery metals space.

The company projects it will be ready for commercial production in late 2022. Since its conception, South Star has been quick to begin constructing and commissioning the necessary infrastructure and parameters for production. The company intends to start small and scale up operations in a well-engineered multi-phase plan to control risks.

South Star Mining’s management team includes experienced mining heavyweights, mine builders and operators. The unparalleled local expertise, proven track records of success and vested interest in company success prime South Star for exceptional growth and project achievements.

South Star Mining’s Company Highlights

  • South Star Mining Corp. is an emerging mining production company focused on acquiring and developing near-term production projects in Brazil.
  • The company’s flagship Santa Cruz graphite project leverages mining-friendly conditions and strategic positioning in the second largest flake graphite producing district in the world.
  • Santa Cruz is an open-pit deposit with 15 drill-ready targets across a 13,000-hectare property. The entire land package hosts widespread mineralization, according to the Brazilian Mining Authority.
  • South Star’s current market capitalization stands at only 2.5 per cent of its project NPV (pre-financing).
  • The company operates a two-phased approach for project development to minimize risk and intelligently allocate capital for shareholder value. This low CAPEX approach includes a pilot plant and large plant phase following bench scale and plant testing programs.
  • 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, on-going education and stewardship.

South Star Mining’s Key Project

Santa Cruz Graphite Project

The Santa Cruz graphite project consists of 13 approved exploration licenses covering approximately 13,000 hectares in the Bahia State of Brazil, the second largest flake graphite producing district in the world.

Extensive development has been completed to date on the property, including over 7,000 metres of drilling and a successful pilot plant test on over 30 tonnes of mineralized material. In 2017, the South Star completed a PEA technical report for the project that indicated resources of 14,990,400 tonnes at 2.70 per cent graphite and inferred resources of 3,572,100 tonnes at 2.90 per cent graphite. An NI 43-101 PFS and updated resource estimate have also been completed.

Phase 1 operations included a 5,000tpy fully licensed pilot plant. Phase 2 operations represent a larger scale concentration plant with 25,000tpy planned production scalability and environmental work program scheduled for April 2021.

The property hosts sizable geologic upside, with 95 per cent of the project unexplored. After financing, South Star intends on developing the project’s 10-15 drill targets and marketability of Santa Cruz’s high purity flake production.

South Star Mining’s Management Team

Richard Pearce — CEO & Director

Richard Pearce is an entrepreneur and founding partner with over 20 years of experience in planning and managing complex operations throughout the Americas. He has been based in Brazil since 2008 and worked throughout the country. He has a wide range of consulting and advisory experience including technical services, project & asset development, corporate advisory services, business administration & incorporation services, deal origination, M&A advisory, construction, and operations. He is based out of São Paulo, Brazil and is a native speaker of English as well as fluent in Portuguese and Spanish. Country experience includes Canada, United States and most countries throughout Latin America. He is passionate about standing up companies and helping them grow and explore the Brazilian markets.  He is also a Qualified Person (QP) as defined by NI43-101.

Dave McMillan — Chairman

With over 50 years in the resource industries, Dave McMillan’s career has spanned manufacturing, marketing, sales and financing. He has spent 17 years as an investment advisor VP, Senior VP, director, and member of the Executive Committee for Yorkton Securities and Yorkton Holdings Inc. McMillan holds board positions on several private and publicly traded oil & gas and mining companies.

Bennett Liu – CFO

Bennett Liu joins South Star from Red Fern Consulting Ltd., a full-service accounting group that provides financial and support services for public companies including accounting, regulatory compliance, audit management and financial reporting. Mr. Liu has served as Chief Financial Officer for multiple publicly traded companies (TSX Venture Exchange and CSE-listed) with a focus on the resource sector. He received his Bachelor of Technology, Accounting from the British Columbia Institute of Technology.

Eric Allison — Director

Eric Allison has over 36 years of experience in the natural resource industry, working in technical, business, project development and management roles. He formerly served as CEO and COO of Brazahav Resources, a private entity developing a brownfield gold mine project in Brazil. Prior, he was the director of research and chief geologist at Casimir Capital LP, specializing in junior mining companies and the director of business development at Sempra Commodities. Over his career, Allison has also served in various roles for Cyprus Amax Minerals, Amax Energy, SPG Exploration and Texaco. He has served on the boards of several private and public companies.

Felipe Holzhacker Alves — Director

Felipe Holzhacker Alvez is a professional mining engineer with a Master’s degree in Political Economics of Resources from the Colorado School of Mines. He is a Brazilian native who combines international capital markets experience with an extensive local network of governmental and regulatory agencies, resource financiers and technical, legal and tax consulting services. Alvez is the founder and CEO of Frontera Minerals Group, a Brazil-focused exploration and project development company. He previously held various roles at Rand Merchant Bank, where he was mainly responsible for Latin American Investments. His technical experience includes roles at open pit and underground mines. He is currently a board member of Trek Mining and the President of CBRR (Brazilian Commission for Resources and Reserves), Brazil´s equivalent to NI43-101/CIM in Canada.

Marc Leduc, Independent Director

Marc Leduc is a mining engineer and geologist with over 30 years of experience involving all aspects of the development, operations, planning and evaluation of mining projects including over 20 years in Latin America. Marc served as the President and CEO of Luna Gold, operator of the Aurizona mine in Brazil, from 2015 to 2016.  He holds a B.Sc. (Honors) in Mining Engineering from Queen’s University and a B.Sc. in Geology from the University of Ottawa.

Daniel Wilton, Independent Director

Daniel Wilton has 25 years of experience in M&A, corporate finance and principal investing in the mining sector. Dan was most recently a Partner at Pacific Road Capital Management, a mining-focused private equity investment firm with approximately $800 million under management. At Pacific Road, Dan reviewed a number of projects in Brazil, led the investment in Luna Gold (now Equinox Gold Corp.) and financed the development of the Aurizona gold project through critical pre-feasibility and permitting activities. Prior to joining Pacific Road, Dan’s previous roles included Managing Director and Head of the Global Mining and Metals Group at National Bank Financial Inc..and other corporate finance and M&A roles at global institutions based in London, Toronto and New York.

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