STSBF - South Star Mining Announces Non-Brokered Private Placement
(TheNewswire)
Toronto, ON – TheNewswire - January 28, 2021 – South Star Mining Corp. ( ‘South Star ’ or ‘the Company’ ) (TSXV: STS ) (OTC:STSBF) today announces that it intends to complete anon-brokered private placement of Units (the “Private Placement”)to raise C$1,300,000. Management and Company insiders have committedto take a large portion of the Placement.
The Private Placement will consist of 13,000,000 Unitspriced at C$0.10 per unit (the “Units”). Each Unit will consist ofone (1) common share and one (1) common share purchase warrant (the“Warrants”). Each Warrant will entitle the holder to purchase oneadditional common share of the Company at an exercise price of C$0.15per common share for a period of 3 years from the date of issue. Thesecurities will be subject to a four month hold period from the dateof closing and approval by the TSX Venture Exchange. The PrivatePlacement will be available to existing shareholders of the Companyand all Warrants issued under the Private Placement will be subject toan acceleration clause. See below for further details.
Net proceeds from the Placement will be used forcompletion of the final design for Phase 1 construction documents,advanced materials testing, commercial agreements, project finance andgeneral working capital requirements for the Company.
South Star CEO Richard Pearce commented: “We aregrateful for the continued support from our shareholders and insidersthat have been steadfast in their ongoing commitment to advancing theProject. With the recently announced final approval of the mininglicense, we have largely de-risked the Project and are ready to moveinto the construction phase. We are excited to be added soon to ashort list of graphite producers and getting into cashflow. Taking theSanta Cruz Project from concept to paper to production gives our teama great deal of satisfaction. We believe the phased approach toproduction we are taking, with initial Phase 1 Pilot Plant (5,000 tpy of concentrate) and shortly thereafter Phase 2 Production(25,000 - 30,000 tpy of concentrate), is a smart way to allocatecapital, control risks and create shareholder value. We can alwaysscale up to meet growing market demand as needed once we are inproduction and have cashflow.”
Acceleration Clause & Existing Shareholder Exemption andInvestment Dealer Exemption
If over a period of 10 consecutive trading days betweenthe date that is four (4) months following the closing of the privateplacement and the expiry of the Warrants the daily volume weightedaverage trading price of the common shares of the Company on the TSXVenture Exchange (or such other stock exchange where the majority ofthe trading volume occurs) exceeds $0.40 on each of those 10consecutive days, the Company may, within 30 days of such anoccurrence, give written notice to the holders of the Warrants thatthe Warrants will expire at 4:00 p.m. (Vancouver time) on the 30th dayfollowing the giving of notice unless exercised by the holders priorto such date. Upon receipt of such notice, the holders of the Warrantswill have 30 days to exercise their Warrants. Any Warrants whichremain unexercised at 4:00 p.m. (Vancouver time) on the 30th dayfollowing the giving of such notice will expire at that time.
The Placement will be made available to existingshareholders of the Company who, as of the close of business onJanuary 27, 2021, held common shares of the Company (and who continueto hold such common shares as of the closing date), pursuant to theprospectus exemption set out in BC Instrument 45-534 – ExemptionFrom Prospectus Requirement for Certain Trades to Existing SecurityHolders and in similar instruments in other jurisdictions in Canada(the “Existing Shareholder Exemption”). The Existing ShareholderExemption limits a shareholder to a maximum investment of CAD$15,000in a 12-month period unless the shareholder has obtained adviceregarding the suitability of the investment and, if the shareholder isresident in a jurisdiction of Canada, that advice has been obtainedfrom a person that is registered as an investment dealer in thejurisdiction. If the Company receives subscriptions from investorsrelying on the Existing Shareholder Exemption exceeding the maximumPlacement, the Company may adjust the subscriptions received on apro-rata basis.
The Company has also made the Placement available tocertain subscribers pursuant to BC Instrument 45-536 – ExemptionFrom Prospectus Requirement for Certain Distributions Through anInvestment Dealer (the “Investment Dealer Exemption”). Inaccordance with the requirements of the Investment Dealer Exemption,the Company confirms that there is no material fact or material changeabout the Company that has not been generally disclosed.
In connection with the private placement, the Companyproposes to issue Units to directors, officers and insiders of theCompany. As a result, the private placement constitutes a relatedparty transaction pursuant to TSX Venture Exchange Policy 5.9 andMultilateral Instrument 61-101 (“MI 61-101”). The Company hasdetermined that exemptions from the various requirements of TSXVenture Exchange Policy 5.9 and MI 61-101 are available for theissuance of the Units to related parties. The Company is relying onSection 5.5(c) of MI 61-101 for an exemption from the formal valuationrequirement on the basis that the transaction is a distribution ofsecurities for cash, and on Section 5.7(1)(b) of MI 61-101 for anexemption from the minority shareholder approval requirement, as thefair market value of the transaction, insofar as it involves relatedparties, will not be more than $2,500,000.
South Star Mining Corp. is focused on the selectiveacquisition and development of near-term mine production projects inBrazil to maximize shareholder value. STS has an experienced executiveteam with a strong history of discovering, developing, building andoperating profitable mines in Brazil.
The Santa Cruz Graphite Project is fully licensed forPhase 1 operations (5,000 tpy concentrate) and is located in SouthernBahia in the second largest graphite producing region in the worldwith over 80 years of continuous mining. The Project has at surfacemineralization in friable materials, and successful large-scale pilotplant testing (>30t) has been completed. The results of thetesting show approximately 65% of Cg concentrate is +80 mesh with goodrecoveries and 95-99% Cg. With excellentinfrastructure and logistics, South Star is carrying its developmentplan towards Phase 1 production projected in Q2 2022, pendingfinancing.
This news release has been reviewedand approved by Richard Pearce, P.E., a "Qualified Person"under National Instrument 43-101 and President and CEO of South StarMining.
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, pleasecontact:
CHF Capital Markets
Cathy Hume, CEO
Phone: 416-868-1079 x231
Email: cathy@chfir.com
Mr. Dave McMillan
Chairman
Email: davemc@telus.net
CAUTIONARY STATEMENT
Neither the TSX Venture Exchange norits Regulation Services Provider (as that term is defined in policiesof the TSX Venture Exchange) accepts responsibility for the adequacyor accuracy of this press release.
Forward-Looking Information
The information contained hereincontains "forward-looking statements" within the meaning ofapplicable securities legislation. Forward-looking statements relateto information that is based on assumptions of management, forecastsof future results, and estimates of amounts not yet determinable. Anystatements that express predictions, expectations, beliefs, plans,projections, objectives, assumptions or future events or performanceare not statements of historical fact and may be "forward-lookingstatements."
Forward-looking statements aresubject to a variety of risks and uncertainties which could causeactual events or results to differ from those reflected in theforward-looking statements, including, without limitation: risksrelated to failure to obtain adequate financing on a timely basis andon acceptable terms; risks related to the outcome of legalproceedings; political and regulatory risks associated with mining andexploration; risks related to the maintenance of stock exchangelistings; risks related to environmental regulation and liability; thepotential for delays in exploration or development activities or thecompletion of feasibility studies; the uncertainty of profitability;risks and uncertainties relating to the interpretation of drillresults, the geology, grade and continuity of mineral deposits; risksrelated to the inherent uncertainty of production and cost estimatesand the potential for unexpected costs and expenses; results ofprefeasibility and feasibility studies, and the possibility thatfuture exploration, development or mining results will not beconsistent with the Company's expectations; risks related to goldprice and other commodity price fluctuations; and other risks anduncertainties related to the Company's prospects, properties andbusiness detailed elsewhere in the Company's disclosure record. Shouldone or more of these risks and uncertainties materialize, or shouldunderlying assumptions prove incorrect, actual results may varymaterially from those described in forward-looking statements.Investors are cautioned against attributing undue certainty toforward-looking statements. These forward-looking statements are madeas of the date hereof and the Company does not assume any obligationto update or revise them to reflect new events or circumstances.Actual events or results could differ materially from the Company'sexpectations or projections.
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