VANCOUVER, BC, Dec. 7, 2021 /CNW/ - South Star Battery Metals
Corp. ("South Star" or the "Company") (TSXV: STS) (OTCQB:
STSBF), is pleased to announce that it has entered into a binding
Earn-in and Option Agreement ("Agreement") for 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 (see November 3,
2021 press release). Under the terms of the Agreement, South
Star will have the right to earn-in to up to 75% of the
Project. The transaction is subject to the final approval of
the TSX Venture Exchange (the "TSXV").
Richard Pearce, South Star's CEO,
said "We continue to execute on creating a multi-asset, diversified
battery metals company. Our goals continue to be to get
Santa Cruz in production in 2022,
and we are excited about bringing on the next scalable critical
battery metals project in the pipeline in another important
jurisdiction for the sector. The approved Infrastructure Bill in
the US will provide a lot of opportunities. We will leverage all
our technical and commercial experience from Brazilian graphite and
move the Project forward quickly. The Southeast corridor of the US
is transforming itself into an electric vehicle, clean-tech and
defense hub, and the Project in Coosa
County is right in the middle of the action. I would like to
thank our partners for getting this done and look forward to
working together in the coming years."
Hexagon's Managing Director, Merrill
Gray, said: "We are really looking forward to working with
the team at South Star under this Agreement on the Ceylon Graphite
project, including seeing how South Star creates value for our
combined shareholder base in practical, on the ground terms."
CEYLON GRAPHITE
PROJECT
Currently, Hexagon owns 80% of the Project, and USCM with a
small group of individuals own 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 a 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. Work completed to date includes:
- Regional scale and local geologic and structural mapping and
sampling program.
- 29 trenches totaling 2,769 linear meters were dug to a maximum
depth of approximately 2 meters. 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 10 representative
samples was tested at GIRCU Laboratory in Guangzhou, China. The testing indicated
a traditional crush/grind/flotation 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.
FINAL EARN-IN TERMS
To satisfy the terms of the Agreement, South Star must complete
the following:
- The drilling, resource estimation and analysis needed to
produce a NI 43-101 compliant Preliminary Economic Analysis (PEA)
within three years.
- Fund an annual minimum expenditure of C$250,000 (C$750,000 total) to earn 75% of the project.
- Extend or renew, as needed, the currently 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 three-year
term of the definitive earn-in period.
- Upon satisfaction of the first three items listed above, South
Star shall have the right, but not the obligation, to acquire 75%
of the Project.
- 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
interest in the Project by selling for a payment of C$250,000 in South Star shares for the remaining
25% of Project.
- During the Option Period, and 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, STS shall have the right, but not the obligation, to
purchase the entire remaining interest not owned or under its
control.
- Within six months of the Ceylon Graphite Project achieving
Commercial Production ("Production Bonus"), STS shall make a
payment of C$250,000 in STS shares.
The Production Bonus shall be proportionately reduced to reflect
any reduction in the remaining 25% interest held by the
parties.
NEXT STEPS
South Star is currently developing plans and making preparations
for the Phase 1 exploration program at the Project. This
initial work will include RC drilling to further define the extent
and structure of the deposit and will be combined with additional
field mapping and surface sampling. This first phase is
tentatively scheduled to begin early in 2022. 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 the excellent
relationships with the community, as well as with local, state and
federal agencies, originally established by the Charge Minerals'
team.
ABOUT SOUTH STAR BATTERY METALS CORP
South Star Battery Metals Corp. is a 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.
On behalf of the Board,
Mr. Richard Pearce
Chief Executive Officer
For additional information, please contact:
CHF Capital Markets (IR Canada)
Cathy Hume, CEO
Phone: +1 416-868-1079 x251
Email: Cathy@chfir.com
RBMG – RB Milestone Group LLC (IR US)
Trevor Brucato, Managing Director
Email: southstar@rbmilestone.com
Mr. Dave McMillan
Chairman
Email: davemc@telus.net
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.