South Star updates phase 1, 2, 3 progress at Santa Cruz graphite mine, Brazil

South Star Battery Metals Corp. [STS-TSXV; STSBF-OTCQB] has begun a construction and project development for the 100%-owned Santa Cruz graphite mine in Bahia, Brazil.

Phase 1 construction update: The majority of the major equipment has been contracted and down payments made to lock in largest portion of phase 1 capital expenditures (capex). All major equipment contracts are on schedule to be signed by January 2023. Shop drawings are being finalized by equipment manufacturers, and final engineering documentation for construction is on schedule to be completed by February 10, 2023.

Civil and earthworks contractors are under contract and mobilized. Civil infrastructure including initial offices, showers, bathrooms and other infrastructure is 50% completed and on schedule to be completed by January 6, 2023. The earthworks contractor is mobilized and clearing and topsoil stockpiling operations of the plant site are underway.

The owner’s team is complete and mobilized to oversee the 12-month construction and commissioning schedule.

Phases 2 & 3 permitting and licensing update: The field work for the environmental permitting of Phases 2 & 3 has been completed, and the company is on schedule to submit the permitting documentation/studies to the Municipality of Itabela, Bahia by the end of January 2023. The terms of reference and requested studies for Phases 2 & 3 are similar in process and substance to the Phase 1 environmental permitting process.

Requests for definitive mining concession and the Planned Economic Analysis reports (PAE) doubling production to 50,000 tpy of graphite concentrates for 11 of the 13 mining claims have been submitted to Brazilian Mining Agency for review and comment. All 13 PAEs are planned to be submitted by January 2023.

Permitting and licensing for Phases 2 & 3 are planned to be approved around the time the Phase 1 operations are in commissioning in Q4 of 2023.

The geophysics team has completed the field work for the first three lines of electrical resistivity (ER) with 10 metres electrode spacing with an estimated penetration of 80-90 metres. The lines were completed on sections with known geology and graphite grades based on recent drilling program. The results are being interpreted and then will be compared to the known geologic sections and graphitic carbon (Cg) grade. If the ER proves effective in identifying potential targets and mineralized zones/limits, then additional 3-4 km of ER will be completed in January 2023. The results will be used to plan and prioritize the 2023 drilling program.

Richard Pearce, CEO of South Star, said, “We are closing out 2022 having reached another important milestone, and Phase 1 commercial production is planned for December 2023. It is great to be fully funded for Phase 1, as well as getting equipment purchased and contractors mobilized. Civil support infrastructure construction is about 50% complete and clearing and stripping operations of the plant site are underway. We will be working through the end of the year and look forward to hitting the ground running so that 2023 will be a watershed moment for South Star, as we transition from a development project to an operating mine. We are confident in delivering on our promise to be the first new graphite production in the Americas since 1996. We will be posting regular updates, videos and photos on our social media and website, so that shareholders, stakeholders and potential clients have a clear vision of our path to production.”

South Star’s Santa Cruz Graphite Project is the first of a series of industrial and battery metals projects that will be put into production. Brazil is the second-largest graphite-producing region in the world with more than 80 years of continuous mining. Santa Cruz has at-surface mineralization in friable materials, and successful large-scale pilot-plant testing (>30t) has been completed. The results of the testing show that approximately 65% of Cg concentrate is +80 mesh with good recoveries and 95%-99% Cg. With excellent infrastructure and logistics, South Star is fully funded for Phase 1, and the 12-month construction and commissioning are underway. Santa Cruz will be the first new graphite production in the Americas since 1996 with Phase 1 commercial production projected in Q4 2023.

South Star’s next project in the development pipeline is a project in Alabama located in the middle of a developing electric vehicle, aerospace and defense hub in the southeastern United States. The project is a historic mine active during World Wars I & II. Trenching, phase 1 drilling, sampling, analysis and preliminary metallurgic testing has been completed. The testing indicated a traditional crush/grind/flotation concentration circuit achieved grades of approximately 94-97% with approximately 86% recoveries. South Star is executing on its plan to create a multi-asset, diversified battery metals company with near-term operations in strategic jurisdictions.