STSBF - South Star Mining Receives Debt Financing Pre-Approval for C$7.5 million and Environmental License Extension
(TheNewswire)
Toronto, ON, - TheNewswire - October 5, 2020 - South Star Mining Corp. ( 'South Star ' or'the Company' ) (TSX-V: STS ) (OTC: STSBF)is pleased to announce the pre-approval ofR$29.7 million (approx. C$7.5 million) in debt finance from Banco doNordeste ('the Bank'), a leading regional Brazilian development bank,as well as the approval of the renewal of the simplified environmentallicense for a period of 4 years for the Phase 1 Pilot Plant Operations(5,000tpy of concentrate) for the Santa Cruz Graphite Project ('theProject') in Bahia, Brazil. The C$7.5m financing comprise 100% of theProject debt financing requirements.
The renewed environmental license is in the process ofbeing submitted to the regulatory agency (ANM) to support the trialmining license (GU) and is anticipated to be the final approvalrequired before a construction decision is made.
South Star CEO RichardPearce commented, "We are extremely excitedabout the recent developments of the Project and continue the drivetowards 2021 production. The renewal of the environmental license for4 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 finallicense required to start the construction. The pre-approval of 100%of the debt financing requirements and the favourable terms reinforcethe strength of the Project economics. I would like to thank ourcurrent shareholders and all the Project stakeholders for theircontinued support and look forward to an exciting 2021."
DEVELOPMENT BANK DEBT Pre-approval
The Company has received pre-approval for 100% of theProject debt financing requirements from Banco do Nordeste, thelargest regional development financial institution in Latin Americaresponsible for covering the Project region. The credit committee haspre-approved the following terms:
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-R$29.7 million (~C$7.5 million) of debt;
-Required Company equity match of R$7 million (~C$1.5million);
-Annual Interest rate of approximately 5.3%; and
-Guarantees, grace period and repayment terms to benegotiated, pending technical review.
The technical engineering design documents have beensubmitted to the Bank's technical review board and are currently beingevaluated. Technical review is expected to take 45-60 days, accordingto the Bank's normal approval process. Once the technical review hasbeen completed and approved, the Project documents will be returned tothe credit committee for final negotiations and closing. Debt termsand conditions may vary depending on the evaluation of the technicalreview and final credit analysis.
South Star Mining Corp. (TSX.V: STS) is focused on theselective acquisition and development of near-term mine productionprojects in Brazil to maximize shareholder value. STS has anexperienced executive team with a strong history of discovering,developing, building and operating profitable mines in Brazil.
The Santa Cruz Graphite Project is located in SouthernBahia, the third largest graphite producing region in the world withover 70 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 planning the commissioningof 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, 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 that future exploration,development or mining results will not be consistent with theCompany's expectations; risks related to gold price and othercommodity 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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