STSBF - South Star Mining Corp. Announces an Additional Five-Year Offtake Agreement and Conversion of Convertible Debt
(TheNewswire)
Toronto, ON – TheNewswire - May 12, 2021 – South Star Mining Corp. ( “South Star ” or “the Company” ) (TSXV: STS ) (OTC:STSBF) is pleased to announcethat it has entered into a Memorandum of Understanding(“Agreement”) for 20,000 tonnes of natural flake graphiteconcentrate over a period of five years for the Santa Cruz GraphiteProject (“Project”). The strategic offtake was signed on May10 th , 2021 with a United States industrial specialist(“Partner”) in high-quality graphite including coated sphericalpurified graphite (CSPG), downstream processing and marketing. Termsand conditions of the Agreement are confidential for competitivemarket conditions.
Richard Pearce, President and CEO of South Star,commented: “With this latest offtake agreement we have the majorityof our production sold for the Phase 1 operations and a great start onPhase 2 operations. The tonnages associated with this agreement willmainly be processed into CSPG for the growing lithium-ion battery(LiB) markets. The recent offtake agreements reinforce thehigh-quality nature of the deposit that create value for our Partnersand ensure that the future of Santa Cruz is very bright with adiversified product line across a broad array of market sectors. Ialso think the recent agreements reinforce the phased approach toproduction, which underscores risk management and effective allocationof capital. This is another important achievement in moving theProject from development into production in 2022 and then scaling itup for Phase 2 operations. Once again, we look forward to developing along-term relationship with our Partners, and we are excited abouthaving a strong presence in the LiB market and the electrificationrevolution. We are quickly building this Company into the first newoperation in continuous commercial production in the Americas in morethan a decade.”
Convertible Debt
The Company is also announcing the retirement andconversion of 100% of the Convertible Debenture (May 6, 2020 PressRelease). Pursuant to the terms and conditions of the agreement,5.6M common shares have been issued along with 5.6M warrants for theaggregate gross proceeds of C$280,000. With the conversion of thedebenture, South Star is now debt free.
About South Star Mining Corp.
South Star Mining Corp. is focused on the selectiveacquisition and development of near-term production projects inBrazil. South Star is driven to create fundamental value in thebattery metals sector for clients and investors with real projectsthat have strong intrinsic financial and operating metrics, and thatcan be profitable throughout the resource cycle. South Star has anexperienced executive team with a strong history of discovering,developing, building and operating profitable mines in Brazil.
The Santa Cruz Graphite Project, located in SouthernBahia, is the first of a series of battery metals projects that willbe put into production. Brazil is the second-largestgraphite-producing region in the world with more than 80 years ofcontinuous mining. The Project has at-surface mineralization infriable materials, and successful large-scale pilot-plant testing(>30t) has been completed. The results of the testing show thatapproximately 65% of Cg concentrate is +80 mesh with good recoveriesand 95-99% Cg. With excellent infrastructure andlogistics, South Star is carrying its development plan towards Phase 1production projected in Q4 2022, pending financing.
The Santa Cruz project is being developed in a phasedapproach. Phase 1 operations for the 5,000 tpy pilot plantoperations are fully licensed, and the Company is preparing to startconstruction in September 2021 with commercialproduction targeted for Q4 2022. Phase 2 operations will represent alarger scale concentration plant currently planned to produce between25,000 to 30,000 tpy of concentrate. The sizing of Phase 2 plant couldbe increased depending on the successes of the Phase 1 operations,ongoing development of commercial relationships, and marketconditions.
South Star is committed to a corporate culture, projectexecution plan and safe operations that embrace the highest standardsof ESG principles based on transparency, stakeholder engagement,ongoing education and stewardship. To learnmore, please visit the Company website at http://www.southstarmining.ca .
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.
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 x251
Email: cathy@chfir.com
Mr. Dave McMillan
Chairman
Email: davemc@telus.net
Twitter: https://twitter.com/southstarmining
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LinkedIn:
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.
This news release and the UpdatedTechnical Report contain references to inferred resources. The Reportis preliminary in nature and includes inferred mineral resources thatare considered too speculative geologically to have the economicconsiderations applied to them that would enable them to becategorized as mineral reserves.
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 and on acceptable terms; risksrelated to the outcome of legal proceedings; political and regulatoryrisks associated with mining and exploration; risks related to themaintenance of stock exchange listings; risks related to environmentalregulation and liability; the potential for delays in exploration ordevelopment activities or the completion of feasibility studies; theuncertainty of profitability; risks and uncertainties relating to theinterpretation of drill results, the geology, grade and continuity ofmineral deposits; risks related to the inherent uncertainty ofproduction and cost estimates and the potential for unexpected costsand expenses; results of prefeasibility and feasibility studies, andthe possibility that future exploration, development or mining resultswill not be consistent with the Company's expectations; risks relatedto commodity price fluctuations; and other risks and uncertaintiesrelated to the Company's prospects, properties and business detailedelsewhere in the Company's disclosure record. Should one or more ofthese risks and uncertainties materialize, or should underlyingassumptions prove incorrect, actual results may vary materially fromthose described in forward-looking statements. Investors are cautionedagainst attributing undue certainty to forward-looking statements.These forward-looking statements are made as of the date hereof andthe Company does not assume any obligation to update or revise them toreflect new events or circumstances. Actual events or results coulddiffer materially from the Company's expectations orprojections.
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