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South Star Battery Metals

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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 to meet the growing demand for energy storage. If you are an investor looking for exposure in this market, there is no better time to invest

South Star Battery Metals (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. Santa Cruz Phase 1 construction is on budget and on schedule with commercial production planned for January 2024.

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.

Southstar Battery Metals’ 5-7 Year Strategic Plan

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 13,000-tonnes-per-year (tpy) Phase 1 pilot plant. Phase 2 production (25,000 tpy) is partially funded and planned for 2026, while Phase 3 (50,000 tpy) is scheduled for 2028.

Leveraging the rapidly growing graphite demand and positive market outlook, South Star aims to become a significant producer in the battery metals space.

Meanwhile, after a successful pilot plant metallurgical testing conducted at the company’s BamaStar Graphite Project in Alabama in 2022, South Star announced the completion of the project’s maiden mineral resource estimate (MRE) indicating 520,000 tonnes of contained graphite with an open pit-constrained mineral resource estimate of 22 million tonnes of inferred resources at an average grade of 2.4 percent (Cg), based on a 1.1 percent cut-off grade. A drilling program composed of 2,000 tp 2,500 meters is underway to support a NI 43-101 preliminary economic assessment( PEA) planned for Q1 of 2024.

The 2023 drilling campaign has been completed at the BamaStar Graphite Project designed to test continuity and limits of mineralization in support of the upcoming NI 43-101 preliminary economic assessment. Fifteen holes totaling approximately 1,900 meters were successfully completed, and all holes at BamaStar have intercepted significant intervals of graphite mineralization. The company has received a US$3.2-million grant (C$4.4 million) from the Department of Defense to advance the NI 43-101 feasibility study for the BamaStar Graphite Project.

South Star’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.

Company Highlights

South Star Battery Metals is positioned to emerge as the first new graphite producer since 1996 as it develops near-term production projects in Brazil and the United States.The company’s flagship Santa Cruz graphite project leverages mining-friendly conditions and its strategic position 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.The company started Phase 1 construction of the Santa Cruz Graphite mine in June 2022 with production commencing in January 2024. South Star’s current market capitalization stands at C$10.6 millionThe company has received a US$3.2 million grant (C$4.4 million) from the Department of Defense to advance an NI 43-101 Feasibility Study for the BamaStar Graphite Project in Alabama.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.

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 meters of drilling and a successful pilot plant test on over 30 tonnes of mineralized material. In 2017, South Star completed a PEA technical report for the project that indicated resources of 14.99 million tonnes at 2.70 percent graphite and inferred resources of 3.57 million tonnes at 2.90 percent graphite. An NI 43-101 PFS and updated resource estimate have also been completed.

Phase 1 operations include a 13,000-tpy fully licensed pilot plant. Phase 2 operations represent a larger scale concentration plant with 25,000 tonnes per year planned production scalability and environmental work program scheduled.

South Star has a streaming agreement with Sprott Resources Streaming and Royalty Corp. worth up to US$28 million as prepayment for graphite concentrates from the Santa Cruz Graphite Project. On June 2, 2022, South Star commenced Phase 1 construction of the Santa Cruz mine and planned commercial production is slated for January 2024.

The property hosts sizable geologic upside, with 95 percent of the project unexplored.

Alabama Graphite Project

South Star’s Alabama Graphite Project covers approximately 500 acres on the northeast end of the Alabama Graphite Belt, located in Coosa County, Alabama. It’s a historic mine, active during both World Wars. Historically, the Ceylon Graphite mine targeted outcropping graphite mineralization, averaging 3 to 5 percent carbon. The mineralization is at the surface, where the graphite host was originally mined with shovels and excavators. This shows potential upside for modern mining approaches.

South Star is preparing for its first phased exploration, with initial work including RC drilling to further define the extent and structure of the deposit. It will be combined with additional field mapping and surface sampling. 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 excellent relationships with the community, as well as with local, state and federal agencies, originally established by the Charge Minerals’ team.

The Alabama Graphite Project recently received results from a regional-scale and local geologic and structural mapping and sampling program. It showed more than 29 trenches, totalling 2,769 linear meters, dug to a two-meter depth. The results resulted in upwards of 765 samples, plus standards and duplicates, being analyzed. The GIRCU Laboratory in Guangzhou, China tested 10 representative samples. It indicated a crush-grind-flotation concentration of 96 to 97 percent, with recoveries of approximately 86 percent. The study described the ore as well-liberated and easy to process.

Management Team

Richard Pearce – CEO and 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 and incorporation services, deal origination, mergers and acquisitions 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, the US, and most countries throughout Latin America. He is passionate about supporting companies and helping them grow and explore the Brazilian markets. He is also a qualified person (QP) as defined by NI 43-101.

Marc Leduc – Chairman

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. Leduc was president and CEO of Luna Gold, operator of the Aurizona mine in Brazil, from 2015 to 2016. He holds a Bachelor of Science in Mining Engineering, with honors, from Queen’s University and a Bachelor of Science in Geology from the University of Ottawa.

Eric Allison – Executive 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. Previously, he was the director of research and chief geologist at Casimir Capital, specializing in junior mining companies and served as 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.

Daniel Wilton – Independent Director

Daniel Wilton has 25 years of experience in mergers and acquisitions, corporate finance, and principal investing in the mining sector. He was most recently a partner at Pacific Road Capital Management, a mining-focused private equity investment firm with approximately C$800 million under management. At Pacific Road, Wilton reviewed a number of projects in Brazil, led the investment in Luna Gold, now Equinox Gold, and financed the development of the Aurizona gold project through critical pre-feasibility and permitting activities. Prior to joining Pacific Road, his roles included managing director and head of the Global Mining and Metals Group at National Bank Financial and other corporate finance and mergers and acquisitions roles at global institutions based in London, Toronto, and New York.

Priscila Costa Lima – Independent Director

Priscila Costa Lima is a finance and accounting executive with a proven track record in the entertainment and junior mining/resource industries. She is experienced in financial reporting, risk management and corporate finance of publicly traded companies, and in the implementation of new accounting systems, and budget processes. Costa Lima is also currently the director of finance and administration at Mangrove Lithium and a board member at West Vault Mining.

Samantha Shorter – CFO

Samantha Shorter is chief financial officer at South Star Battery Metals and secretary for Osprey Gold Development. She is also on the board of Pacific Empire Minerals Corp., Orogen Royalties, Hawthorn Resources and Sorrento Resources and Partner at Red Fern Consulting. Shorter received an undergraduate degree from the University of British Columbia.

Key Team Members – Santa Cruz Graphite Mine Phased Construction and Operations

Julio Jose Da Silva – General Mine Manager

Julio Da Silva is a mechanical engineer and project manager with over 22 years of experience in the mining and mineral resource sector in Brazil. His expertise includes operations, maintenance, engineering, construction, open-pit mining, metallurgy, placing plants on care and maintenance, mine start-up, quality assurance and control, inventory controls, security, logistics, and the general operations of mine management. He has held various senior management positions at Mineração Morro Verde, Luna/Trek, Yamana, and Aura Minerals. He has degrees in mechanical engineering and project management and is a native Portuguese speaker with intermediate English.

Marcia Cota – Controller and Finance Manager

Marcia Cota is a finance professional with more than 20 years of experience in controls, treasury, finance, data analysis, ERP implementation, tax, audits, cash flow management, logistics, budgeting, and forecasting. She has held several senior management positions in Brazil and overseas with Net Brasil, W Torre, Genea Angola, Locar Guindastes e Transportes, and Mineração Morro Verde. She has a master’s of business administration with a specialization in advanced finance analysis. She is a native speaker of Portuguese and fluent in English.

Antonio de Assis – Sales and Marketing Director

Antonio Assis has over 30 years of sales and marketing experience, with much of that time spent in the natural flake and synthetic graphite markets. He has a long, successful career and has held various senior sales, marketing, and business development positions with Syrah Resources, Nacional de Grafite, Technografit, and Grupo Unimetal. Throughout his career he has worked on overseeing sales teams, creating marketing plans to increase exposure and sales, and developing extensive commercial relationships in the industrial and value-add graphite markets in more than 50 countries around the world. His expertise includes prospecting, sales, marketing, customer relations, technical performance, customer support, contracts, and negotiations. He has degrees in business administration as well as marketing and sales, in addition to being fluent in Portuguese, English, and Spanish.

Marcelo Castro – Construction Project Manager

Castro is a mechanical engineer with over 25 years of engineering, design, construction, and project management experience, with most of that expertise focused on the mining and mineral resource space in Brazil. Castro has been involved with large construction projects with CAPEX of over US$100 million, and overseeing large teams associated with EPCM projects. He has held various senior project management positions with Lyon Engineering, Beadell, Luna, and Ausenco. He has degrees in mechanical engineering, business administration for engineers, and workplace safety engineering. Castro is native Portuguese speaker and fluent in English.

Luciano Lazaro – Supply Chain and Procurement Manager

Luciano Lazaro is an experienced supply chain manager with more than 30 years of experience with supply chain, procurement, logistics, COMEX, contracts, and planning and controls. He has held several senior positions with Vale, Ericsson Telecommunications, Brazilian Pipeline Carriers, Anglo Ferrous, Aura Minerals, Ferrous Resources, Luna, and Mineração Morro Verde. He has degrees in economic sciences, urban and regional planning and project management. He is a native speaker of Portuguese and fluent in English.

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