– NOT FOR DISTRIBUTION IN THE UNITED STATES OR THROUGH US NEWS SERVICES –
VANCOUVER, British Columbia, October 10, 2025 (GLOBE NEWSWIRE) — South Star Battery Metals Corp. (“Southern Star” or “Company“) (TSXV: STS) (OTCQB: STSBF) is pleased to announce that further to its press release dated September 30, 2025, it has closed the first tranche of its previously announced non-brokered private placement of units (“Unit offer“), producing 5,521,512 units (“Units» priced at C$0.15 per unit for gross proceeds of C$828,227 (approximately US$595,847).
Each Unit consists of one ordinary share (“Share“) and one warrant to purchase a common share (“Order“). Each warrant entitles the holder to purchase one additional share at a price of C$0.20 per share for a period of five (5) years from the closing date, subject to acceleration. The expiration date of the warrants may be accelerated, at the Company's option, if at any time after the expiration of four (4) months after the closing date, the closing price of the Company's common shares on the TSX Venture Exchange (“Exchange» is or exceeds C$0.40 for ten (10) consecutive trading days, provided that the Company provides thirty (30) days' prior notice to holders by press release.
The securities issued in the first tranche of the Equity Offering are subject to a statutory hold period of four months and one day from the date of issue in accordance with applicable securities laws. The net proceeds from the unit offering will be used for exploration and development activities, general and administrative expenses and working capital. The first tranche of the Unit Offering is subject to final approval by the Exchange.
The Company expects to close one or more additional tranches of the Unit Offering in the coming weeks, the closing of which will continue to be subject to customary conditions, including the receipt of all necessary corporate and regulatory approvals, including Exchange approval.
Previously, on September 30, 2025, the Company announced that certain funds managed and controlled by Mr. Thiago Cunha, interim CEO, President and Director of the Company, agreed to complete a private placement of non-brokered convertible notes for gross proceeds of up to C$2.085 million (US$1.5 million) (“Note Suggestion“). The Company will no longer conduct the Note Offering and the funds have instead agreed to purchase C$2.085 million (US$1.5 million) of Units in accordance with the terms of the Unit Offering. As a result, the Company has increased the size of the Unit Offering to C$6,255,000 (US$4.5 million).
The funds managed and controlled by Mr. Thiago Cunha purchased 1,557,912 Units in the first tranche of the Unit Offering, resulting in Mr. Thiago Cunha having management and control of 19.9% of the issued and outstanding shares of the Company. The Company intends to hold a shareholders' meeting on or about November 17, 2025 to obtain shareholder approval for Mr. Thiago Cunha to become the controlling person of the Company, as required by the Exchange. Subject to and upon receipt of such shareholder approval, the funds managed and controlled by Mr. Thiago Cunha will complete the purchase of an additional 12,342,088 Units, representing the balance of their investment commitment of C$2.085 million (US$1.5 million).
Company insiders purchased a total of 2,007,912 Units in the first tranche of the Unit Offering (including 1,557,912 Units purchased by funds managed and controlled by Mr. Thiago Cunha). Such insider participation constitutes a “related party transaction” under Multilateral Instrument 61-101: Protection of minority security holders in special transactions (“MI 61-101The Company relies on the exemption from the formal appraisal and minority shareholder approval requirements of MI 61-101 pursuant to its sections 5.5(a) and 5.7(1)(a) because the fair market value of the securities underwritten does not exceed 25% of the Company's market capitalization.
The Company also announces that it will not proceed with any further tranches of the Company's preliminary share offering originally announced on June 4, 2025.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (“US Securities Law“) or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the United States Securities Act and applicable state securities laws or an exemption from such registration.
ABOUT SOUTH STAR BATTERY METALS CORP.
South Star is a Canadian battery metals project developer focused on selectively acquiring and developing short-term manufacturing projects in the Americas. South Star's Santa Cruz graphite project, located in Southern Bahia, Brazil, is the first in a series of industrial metals and battery projects to enter production. Brazil is the second largest graphite producing region in the world, with continuous mining going on for over 80 years. Santa Cruz has surface mineralization of unconsolidated materials and successful large-scale pilot plant testing (>30 tonnes) has been completed. Test results show approximately 65% graphite concentrate is +80 mesh with good yield and 95%-99% graphitic carbon (Cg). With excellent infrastructure and logistics, South Star Phase 1 is ramping up commercial production with first sales commencing in May 2025. Santa Cruz is the first new graphite production facility in America since 1996.
The second South Star project in development is strategically located in the center of the emerging electric vehicle, aerospace and defense manufacturing hub in Alabama, USA. The BamaStar project includes a historic mine that operated during World War I and World War II. The vertically integrated production facilities include a mine and industrial processing plant in Coosa County, Alabama, and a processing and processing plant in Mobile, Alabama, which will process natural flake graphite concentrates from the Santa Cruz and BamaStar mines. The preliminary economic assessment of NI 43-101 shows strong economic results, with a pre-tax net present value (“NPV8%)” of $2.4 billion and an internal rate of return (“IRR”) of 35%, and an after-tax NPV8% of $1.6 billion with an IRR of 27%. South Star also received a $3.2 million grant from the U.S. Department of Defense Title III program to develop a feasibility study for the BamaStar project. South Star shares trade 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 delivery plan and safe operations that meet the highest standards of ESG principles based on transparency, stakeholder engagement, ongoing learning and governance. To learn more, visit the company's website at: http://www.southstarbatterymetals.com.
This press release has been reviewed and approved for South Star by Mark Leduc, P.E., a “qualified person” under National Instrument 43-101 and Chairman of South Star Battery Metals Corp.
On behalf of the South Star Board of Directors,
MR. MARK LEDUK,
CHAIRMAN OF THE BOARD OF DIRECTORS
For more information, contact: South Star Investor Relations.
South Star Investor Relations
WARNING STATEMENT
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the 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 laws. Forward-looking statements relate to information that is based on management's assumptions, projections of future results and estimates of amounts that have not yet been determined. Any statements that express forecasts, expectations, beliefs, plans, projections, goals, assumptions or future events or results 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, the completion of subsequent tranches of the Unit Offering, the expected gross proceeds and the use of proceeds thereof, the potential creation of a new controlling entity, the timing and receipt of shareholder and regulatory approvals, and the Company's overall strategy, plans and future expectations.
Forward-looking statements are subject to a variety of risks and uncertainties that could cause actual events or results to differ from those reflected in the forward-looking statements, including, but not limited to: risks associated with the inability to obtain adequate financing on a timely basis and on acceptable terms; risks associated with the outcome of litigation; political and regulatory risks associated with mining and exploration; risks associated with maintaining stock exchange quotes; risks associated with environmental regulation and liability; the potential for delays in exploration or development or completion of feasibility studies; uncertainty of profitability; risks and uncertainties associated with the interpretation of drilling results, the geology, grade and continuity of mineral deposits; risks associated with the inherent uncertainty of production and cost estimates and the possibility of unexpected costs and expenses; the results of preliminary and feasibility studies and the possibility that future exploration, development or production results will not meet the Company's expectations; risks associated with fluctuations in commodity prices; risks associated with obtaining shareholder approval for the Notes Offering; and other risks and uncertainties associated with the Company's prospects, properties and business that are described in detail elsewhere in the Company's disclosures. Additional information regarding these and other risk factors can be found in the Company's continuous disclosure documents available on its profile on SEDAR+ at: www.sedarplus.ca.
If one or more of these risks and uncertainties materialize or if underlying assumptions prove incorrect, actual results could differ materially from those described in the forward-looking statements. Investors are cautioned not to place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof, and the Company undertakes no obligation to update or revise them to reflect new events or circumstances. Actual events or results may differ materially from the Company's expectations or forecasts.
