VANCOUVER, BC, Nov. 3, 2021 /CNW/ - South Star Battery
Metals Corp. ("South Star" or the "Company") (TSXV: STS)
(OTCQB: STSBF), today announces that it has agreed to the key terms
of a proposed earn-in to the Ceylon Graphite Project ("Project") in
Alabama with Hexagon Energy
Materials Limited ("Hexagon") (ASX: HXG) and U.S. Critical Minerals
LLC ("USCM"), a privately-held exploration company incorporated in
the United States. South Star and
the vendors intend to negotiate the terms of a formal agreement
which will allow South Star to earn-in up to 75% of the Project.
The transaction is subject to customary conditions, including
preparation, finalisation and execution of formal agreements and
the receipt of all necessary approvals, including the approval of
the TSX Venture Exchange (the "TSXV").
Richard Pearce, South Star's CEO,
said: "This is another important step towards creating a
multi-asset, diversified battery metals company. We are potentially
bringing on the next project in the pipeline in another important
jurisdiction for the sector. The geology and processing flow sheets
are very similar to our Brazil
graphite asset, and we believe we can leverage our commercial
relationships and technical experience to scale the project into
near-term production. The infrastructure is excellent with access,
energy, and the Mobile port facility near-by. The Southeast
corridor of the US is transforming itself into an electric vehicle
hub, and the Project in Coosa
County is right in the middle of the action. The Project is
on private land, and we believe the permitting and licensing
efforts should be fairly straight-forward. I am very excited to be
working with our partners on moving this Project forward in the
coming years."
Hexagon's Managing Director Merrill
Gray said: "South Star is an experienced graphite
project developer and operator with significant technical resources
and the ambition to move this expertise into North
America. This earn-in deal could accelerate the Ceylon
Graphite project's development, unlocking value for Hexagon
and allowing the company to focus on the progression of our core
Australian projects, in Hydrogen and Nickel, growing our energy
materials portfolio beyond Ceylon Graphite."
CEYLON GRAPHITE PROJECT IN
ALABAMA
Currently, Hexagon owns 80% of the Project, and USCM with a
small group of individuals owning the remaining 20% of the Project.
The Project is located on the northeast end of the Alabama Graphite
Belt and covers approximately 500 acres in Coosa County, Alabama. The Project is an
historic mine active during World Wars I & II. The Ceylon
Graphite mine historically targeted friable outcropping graphite
mineralization, averaging approximately 3%-5% graphitic carbon.
Mineralization is at surface, and the graphitic host rock was mined
historically with shovels and excavators with no drilling and
blasting required.
A comprehensive preliminary exploration program and bench-scale
process have been completed by Hexagon. Work completed to date
includes:
- Regional scale and local geologic and structural mapping and
sampling program.
- 29 trenches totaling 2,769 linear metres were dug to a maximum
depth of approximately 2 metres. The trenches were mapped, logged
and 765 samples plus standards and duplicates (5 per 100 samples)
were analyzed.
- 100 tonnes of bulk ore samples were collected from across the
claims, and a bench-scale process circuit using ten (10)
representative samples was tested at GIRCU Laboratory in
Guangzhou, China. The testing
indicated a traditional crush/grind/floatation concentration
circuit achieved grades of approximately 96%-97% with approximately
86% recoveries. In general, approximately 75%-80% of the ore
concentrates (by mass) is -80 mesh material and the balance being
+80 mesh material. The ore was described as well-liberated and easy
to process.
PROPOSED EARN-IN TERMS
The following is a summary of the key terms of the proposed
earn-in:
- South Star to complete drilling, resource estimation, and
analysis needed to produce a NI 43-101 compliant Preliminary
Economic Assessment (PEA) within three years from the signing of
the final agreements ("Earn-in Period").
- South Star to fund an annual minimum expenditure of
CAD$250,000 (CAD$750,000 total minimum) during the Earn-in
Period to earn 75% of the Project.
- South Star to extend or renew, as needed, and as part of the
earn-in expenditure, the existing mineral leases and surface
agreements on the Project to ensure they are valid for a period of
a minimum of 12 months beyond the Earn-in Period.
- Upon satisfaction of the first three items listed above, South
Star shall have the right, but not the obligation, exercisable
within an agreed period, to acquire 75% of the Project, following
which (subject to the put option described below) the parties would
operate the Project as a joint venture.
- For a period of six months following the exercise of the 75%
earn-in option ("Option Period"), Hexagon and USCM individually
have the right, but not the obligation, to sell their remaining 25%
interest in the Project for an aggregate payment of CAD$250,000 in South Star shares ("Put
Option").
- During the Option Period, any expenditures will be shared pro
rata. Failure by any party to pay their share shall result in a
proportional dilution of interest in the Project.
- Should South Star's interest in the Project increase to 90% or
greater, South Star shall have the right, but not the obligation,
to purchase the entire remaining interest not owned or under its
control on a basis proportional to the Put Option.
- Within six months of the Ceylon Graphite Project achieving
commercial production, South Star shall make a payment of
CAD$250,000 in South Star shares
("Production Bonus"). The Production Bonus shall be proportionately
reduced to reflect any reduction in the remaining 25% interest held
by the parties.
Hexagon, USCM and South Star are currently negotiating the
proposed formal agreements to reflect the above terms, with the
intention of finalising and executing those agreements (if final
terms are agreed) during November
2021.
CRITICAL MATERIALS INSTITUTE
South Star is pleased to announce that it joined the Critical
Materials Institute ("CMI") as an affiliate member. CMI is a
U.S. Department of Energy ("DOE") - Energy Innovation Hub that
seeks to accelerate innovative scientific and technological
solutions to develop resilient and secure supply chains for
rare-earth metals and other materials critical to the success of
clean-energy technologies. Ames Laboratory leads the CMI team,
which includes partners from other national laboratories,
universities, and industry. CMI research works in four ways:
- Diversifying Supply;
- Developing Substitutes;
- Driving Reuse and Recycling; and
- Crosscutting Research.
MARKET DIGITAL
South Star has retained Market Digital ("MD"), a leading
provider of marketing services ("Services"), to heighten and
broaden our brand awareness within the investment community. Market
Digital shall comply with all applicable security laws and policies
of the TSX Venture Exchange ("TSXV") in providing the Services. MD
has been retained for a period of 3 months starting November 01, 2021 and will be paid a monthly fee
of C$100,000 investor for the
Services. The engagement is subject to TSXV approval.
ABOUT SOUTH STAR BATTERY METALS CORP.
South Star Battery Metals Corp. is Canadian battery metals
project developer focused on the selective acquisition and
development of near-term production projects in the Americas. South
Star's Santa Cruz Graphite Project, located in Southern Bahia,
Brazil 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 carrying
its development plan towards Phase 1 production projected in Q4
2022, pending financing. South Star trades 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
execution plan and safe operations that embrace the highest
standards of ESG principles based on transparency, stakeholder
engagement, ongoing education, and stewardship. To learn more,
please visit the Company website at
http://www.southstarbatterymetals.com.
This news release has been reviewed and approved by Richard
Pearce, P.E., a "Qualified Person" under National Instrument 43-101
and President and CEO of South Star Battery Metals Corp.
On behalf of the Board,
Mr. Richard Pearce
Chief Executive Officer
Twitter: https://twitter.com/southstarbm
Facebook:
https://www.facebook.com/southstarbatterymetals
LinkedIn:
https://www.linkedin.com/company/southstarbatterymetals/
YouTube: South Star Battery Metals - YouTube
CAUTIONARY STATEMENT
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this press release.
This news release and the Updated Technical Report contain
references to inferred resources. The Report is preliminary in
nature and includes inferred mineral resources that are considered
too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves.
FORWARD-LOOKING INFORMATION
The information contained herein contains "forward-looking
statements" within the meaning of applicable securities
legislation. Forward-looking statements relate to information that
is based on assumptions of management, forecasts of future results,
and estimates of amounts not yet determinable. Any statements that
express predictions, expectations, beliefs, plans, projections,
objectives, assumptions or future events or performance are not
statements of historical fact and may be "forward-looking
statements".
Forward-looking statements are subject to a variety of risks
and uncertainties which could cause actual events or results to
differ from those reflected in the forward-looking statements,
including, without limitation: risks related to failure to obtain
adequate financing on a timely basis and on acceptable terms; risks
related to the outcome of legal proceedings; political and
regulatory risks associated with mining and exploration; risks
related to the maintenance of stock exchange listings; risks
related to environmental regulation and liability; the potential
for delays in exploration or development activities or the
completion of feasibility studies; the uncertainty of
profitability; risks and uncertainties relating to the
interpretation of drill results, the geology, grade and continuity
of mineral deposits; risks related to the inherent uncertainty of
production and cost estimates and the potential for unexpected
costs and expenses; results of prefeasibility and feasibility
studies, and the possibility that future exploration, development
or mining results will not be consistent with the Company's
expectations; risks related to commodity price fluctuations; and
other risks and uncertainties related to the Company's prospects,
properties and business detailed elsewhere in the Company's
disclosure record. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described
in forward-looking statements. Investors are cautioned against
attributing undue certainty to forward-looking statements. These
forward-looking statements are made as of the date hereof and the
Company does not assume any obligation to update or revise them to
reflect new events or circumstances. Actual events or results could
differ materially from the Company's expectations or
projections.
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SOURCE South Star Battery Metals Corp.