South Star Completes Its Inaugural Graphite Sale from Santa Cruz

South Star Battery Metals Corp. (referred to as "South Star" or the "Company") (TSXV: STS) (OTCQB: STSBF) is pleased to announce the execution of a binding sales agreement (the "Agreement") for the initial purchase of 100 metric tonnes of the Company’s graphite concentrate sourced from its Santa Cruz Graphite Mine in Brazil. The graphite will be transported in five (5) industry-standard intermodal ISO 20-foot shipping containers, each capable of holding 20 one-tonne super sacks. South Star anticipates fulfilling and delivering the initial orders during the third quarter of 2024..

The Agreement was officially signed on May 3, 2024, with a leading American industrial graphite buyer (referred to as the “US Client”). The US Client has additionally shown interest in exploring ongoing purchases, subject to favorable test outcomes for particular applications. Due to competitive considerations, the identity of the US Client and the precise commercial terms of the Agreement are kept confidential.

Furthermore, South Star is delighted to announce that a prominent US graphite firm has assessed, tested, and effectively approved the Santa Cruz graphite concentrate on behalf of its key client, specifically endorsing it for a green-energy application. South Star has achieved notable advancements in certifying its Santa Cruz graphite concentrate with various major graphite consumers globally, who have conducted thorough product evaluations as part of their diligence procedures for potential offtake agreements. The Company anticipates providing further updates to the market regarding the advancement of discussions with other prospective customers once details are concluded.

South Star's primary asset, the Santa Cruz Graphite Mine ("Santa Cruz"), located in the northeastern region of Brazil's Bahia state, is on track to finalize construction of the Phase-1 Plant by June 2024. Upon its completion, Santa Cruz will represent the first newly established graphite mine in the Americas since 1996. Following construction, the plant is expected to undergo approximately six weeks of commissioning before initiating commercial production in August 2024. Upon reaching steady-state production, the current Phase-1 Plant configuration is capable of producing approximately 1,000 tonnes per month.

The forthcoming drilling campaign and the development of an NI 43-101-compliant feasibility study technical report for Phase 2 at Santa Cruz are currently in their final planning phases, with the initial exploration scheduled to begin later this month. Environmental permits for Phase 2 (with a planned capacity of 25,000 tonnes/year) and Phase 3 (with a planned capacity of 50,000 tonnes/year) have already been granted. Definitive mining permits are undergoing final review by Brazil’s National Mining Agency (Agência Nacional de Mineração). The Company aims to secure all necessary permits and licenses for Phases 2 and 3 of development at Santa Cruz before the Phase-1 Plant is commissioned.

South Star’s commercial approach involves the initial production of top-tier graphite concentrates tailored for diverse industrial uses and sectors. At the same time, ongoing studies, technical assessments, and programs are in progress to enhance midstream and downstream products for value-added applications. This includes battery graphite products, such as specialty coated spherical purified graphite (CSPG) for lithium-ion (Li-ion) battery applications, and conductivity-enhancement products for various primary and secondary battery chemistries. Commercial sales for these products are targeted for late 2026 or early 2027.