Press Release: South Star Battery Metals Announces Binding Final Agreement for GraphiteProject in Coosa County, AlabamaSouth Star Battery Metals Announces Binding Final Agreement for Graphite Project in CoosaCounty, Alabama Canada NewsWire VANCOUVER, BC, Dec. 7, 2021 VANCOUVER, BC, Dec. 7, 2021 /CNW/ - South Star Battery Metals Corp. ("South Star" orthe "Company") (TSXV: STS) (OTCQB: STSBF), is pleased to announce that it has enteredinto a binding Earn-in and Option Agreement ("Agreement") for the Ceylon Graphite Project("Project") in Alabama with Hexagon Energy Materials Limited ("Hexagon") (ASX: HXG) andU.S. Critical Minerals LLC ("USCM"), a privately-held exploration company incorporated inthe United States (see November 3, 2021 press release). Under the terms of theAgreement, South Star will have the right to earn-in to up to 75% of the Project. Thetransaction 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 amulti-asset, diversified battery metals company. Our goals continue to be to get SantaCruz in production in 2022, and we are excited about bringing on the next scalablecritical battery metals project in the pipeline in another important jurisdiction for thesector. 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 andmove the Project forward quickly. The Southeast corridor of the US is transforming itselfinto an electric vehicle, clean-tech and defense hub, and the Project in Coosa County isright in the middle of the action. I would like to thank our partners for getting thisdone and look forward to working together in the coming years." Hexagon's Managing Director, Merrill Gray, said: "We are really looking forward toworking 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 inpractical, on the ground terms." CEYLON GRAPHITE PROJECT Currently, Hexagon owns 80% of the Project, and USCM with a small group of individualsown the remaining 20% of the Project. The Project is located on the northeast end of theAlabama Graphite Belt and covers approximately 500 acres in Coosa County Alabama. TheProject is a historic mine active during World Wars I & II. The Ceylon Graphite minehistorically targeted friable outcropping graphite mineralization, averagingapproximately 3-5% graphitic carbon. Mineralization is at surface, and the graphitichost rock was mined historically with shovels and excavators with no drilling andblasting required. A comprehensive preliminary exploration program and bench scale process have beencompleted. 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 1exploration program at the Project. This initial work will include RC drilling tofurther define the extent and structure of the deposit and will be combined withadditional field mapping and surface sampling. This first phase is tentatively scheduledto begin early in 2022. Subsequent phases will include diamond core drilling, bench andpilot scale metallurgy, preliminary resource estimation and engineering. South Star willalso continue to expand and develop the excellent relationships with the community, aswell as with local, state and federal agencies, originally established by the ChargeMinerals' team. ABOUT SOUTH STAR BATTERY METALS CORP South Star Battery Metals Corp. is a Canadian battery metals project developer focusedon the selective acquisition and development of near-term production projects in theAmericas. South Star's Santa Cruz Graphite Project, located in Southern Bahia, Brazil isthe first of a series of industrial and battery metals projects that will be put intoproduction. Brazil is the second-largest graphite-producing region in the world with morethan 80 years of continuous mining. Santa Cruz has at-surface mineralization in friablematerials, and successful large-scale pilot-plant testing (>30t) has been completed. Theresults of the testing show that approximately 65% of Cg concentrate is +80 mesh withgood recoveries and 95-99% Cg. With excellent infrastructure and logistics, South Star iscarrying its development plan towards Phase 1 production projected in Q4 2022, pendingfinancing. South Star trades on the TSX Venture Exchange under the symbol STS, and on theOTCQB under the symbol STSBF. South Star is committed to a corporate culture, project execution plan and safeoperations that embrace the highest standards of ESG principles based on transparency,stakeholder engagement, ongoing education and stewardship. To learn more, please visitthe Company website at http://www.southstarbatterymetals.com. This news release has been reviewed and approved by Richard Pearce, P.E., a "QualifiedPerson" under National Instrument 43-101 and President and CEO of South Star BatteryMetals. 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: [email protected] RBMG -- RB Milestone Group LLC (IR US) Trevor Brucato, Managing Director Email: [email protected] Mr. Dave McMillan Chairman Email: [email protected] Twitter: https://twitter.com/southstarbm Facebook: https://www.facebook.com/southstarbatterymetals LinkedIn: https://www.linkedin.com/company/southstarbatterymetals/ YouTube: South Star Battery Metals - YouTube
HXG Price at posting:
7.9¢ Sentiment: Buy Disclosure: Held
