South Star Battery Metals Corp. 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:
PROPOSED EARN-IN TERMS
The following is a summary of the key terms of the proposed earn-in:
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:
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