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South Star Battery Metals Announces the First Sale of Natural Flake Graphite Concentrate from its Santa Cruz Graphite Mine in Brazil

VANCOUVER, BC / ACCESSWIRE / May 6, 2024 / South Star Battery Metals Corp. ("South Star" or the "Company") (TSXV:STS)(OTCQB:STSBF) is pleased to announce the execution of a binding sales agreement (the "Agreement") for the initial purchase of 100 tonnes of the Company's graphite concentrate from its Santa Cruz Graphite Mine in Brazil. The material will be shipped in five (5) industry-standard intermodal ISO 20-foot shipping containers, each holding 20 one-tonne super sacks. South Star anticipates that initial orders will be fulfilled and delivered during Q3 2024.

The Agreement was formally executed on May 3, 2024, with a prominent American industrial graphite customer (the "US Client"). The US Client has also expressed interest in negotiating regular purchases, pending positive test results for specific applications. For competitive reasons, the US Client's identity and the Agreement's specific commercial details remain confidential.

Additionally, South Star is pleased to report that another major US graphite company has evaluated, tested and successfully qualified Santa Cruz graphite concentrate on behalf of its leading customer, specifically qualifying Santa Cruz graphite for a green-energy application. South Star has made significant progress qualifying its Santa Cruz graphite concentrate with other major graphite end-users worldwide, who have undertaken extensive product testing as part of their due diligence process for offtake agreements. The Company looks forward to updating the market on the progress of developments with other potential customers if and when details are finalized.

THE SANTA CRUZ GRAPHITE MINE UPDATE

South Star's flagship Santa Cruz Graphite Mine ("Santa Cruz") in northeastern Brazil's Bahia state is scheduled to complete construction of the Phase-1 Plant in June 2024. Once completed, Santa Cruz will be the first new graphite mine in the Americas since 1996. The plant will undergo an estimated six-week commissioning process before commencing commercial production in August 2024. Once steady-state production is reached, the current Phase-1 Plant design can produce approximately 1,000 tonnes per month.

Image 1:
Aerial view of South Star Battery Metals Corp's Phase-1 processing plant at the Company's flagship
Santa Cruz Graphite Mine, located in Bahia, Brazil. The image was taken on May 3, 2024.
Photo: South Star Battery Metals Corp.


The upcoming drilling campaign and an NI 43-101-guided feasibility study technical report for Phase 2 at Santa Cruz is in the final planning stages, with initial exploration commencing later this month. Environmental permits for Phase 2 (based on a nameplate capacity of 25,000 tonnes/year) and Phase 3 (based on a nameplate capacity of 50,000 tonnes/year) have already been approved. The definitive mining permits are in final review with Brazil's National Mining Agency (Agência Nacional de Mineração). The Company plans to have all permits and licenses required for Phases 2 and 3 of development at Santa Cruz in place by the time the Phase-1 Plant is commissioned.

South Star's commercial strategy is to initially produce high-quality graphite concentrates for various industrial applications and sectors. Concurrently, studies and technical characterization and technical programs are underway to advance midstream and downstream products for value-added applications -- specifically, battery-graphite products, including specialty coated spherical purified graphite ("CSPG") for lithium-ion ("Li-ion") battery applications and conductivity-enhancement products for a wide variety of commercial primary and secondary battery chemistries -- with commercial sales planned for late 2026/early 2027.

Richard Pearce, CEO of South Star, remarked, "We are excited to see our first purchase order finalized and the start of what we hope will be a great partnership with the US Client. As promised, our team is executing our strategy to deliver responsible production with phased, modular plants, scalable assets in Tier-1 jurisdictions, and a go-to-market strategy to take advantage of being one of the first movers in the Americas."

"Santa Cruz has been in development since 2010 and has exceptional quality, crystalline graphite suitable for a broad range of industrial and value-added applications," said Mr. Pearce. "It is very gratifying to see this moment finally arrive for our team, which has worked extremely hard to get us here. The next 18 months will be transformational for South Star as we transition from a development company to a producer and look to scale operations at a critical time for the sector. We look forward to working with great partners to bring our clients the first new graphite production in the Americas since 1996, as well as important tangible benefits to our team, local communities, stakeholders, and shareholders. There is much to be proud of, and thanks to all involved."

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 (> 30 tonnes) has been completed. The results of the testing show that approximately 65% of graphite concentrate is +80 mesh with good recoveries and 95%-99% graphitic carbon (Cg). With excellent infrastructure and logistics, South Star is fully funded for Phase 1, and the construction and commissioning are underway. Santa Cruz will be the first new graphite production in the Americas since 1996, with Phase 1 commercial production projected in Q3 2024. Phase 2 production (25,000 tonnes / year) is partially funded and planned for 2026, while Phase 3 (50,000 tonnes / year) is scheduled for 2028.

South Star's second project in the development pipeline is strategically located in Alabama in the center of a developing electric-vehicle, aerospace, and defense hub in the southeastern United States. The BamaStar Project includes a historic mine active during the First and Second World Wars. An NI 43-101 guided technical report with the maiden resource estimate has been filed on SEDAR. Trenching, Phase 1 drilling, sampling, analysis, and preliminary metallurgical testing have been completed. The testing included a traditional crush/grind/flotation concentration circuit that achieved grades of approximately 94-97% Cg with approximately 86% recoveries. South Star is executing on its plan to create a multi-asset, diversified battery-metals company with near-term operations in strategic jurisdictions. 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 Corp.

On behalf of the Board,

MR. RICHARD PEARCE
Chief Executive Officer

For additional information, please contact:

South Star Investor Relations

Email: invest@southstarbatterymetals.com
Phone: +1 (604) 706-0212
Website: www.southstarbatterymetals.com

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.

FORWARD-LOOKING INFORMATION

This press release 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 in this press release include, but are not limited to statements regarding moving Santa Cruz into production and scaling operations as well as advancing the Alabama project; and the Company's plans and expectations.

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.

SOURCE: South Star Battery Metals Corp.



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