South Star Provides Updates on Changes to Management and Board and Provides Operational Update

Executive Summary

• Tiago Cunha appointed Interim CEO, President and Director; subscribes for C$2.085 M of convertible notes.
• New CFO/Corporate Secretary Darren Prins hired; General Manager Rogerio Barcellos assigned to Santa Cruz graphite project.
• Operational performance at Santa Cruz improves: second 20‑tonne container shipped in 1.5 months with product mix moving toward design specs; identified ~40 % operating cost savings and re‑evaluation of contractor agreements.

Key Details

• Interim CEO Appointment: Tiago Cunha, largest shareholder, to subscribe for C$2.085 M (US$1.5 M) convertible notes into units of the Company.
• CFO Appointment: Darren Prins joins as Chief Financial Officer and Corporate Secretary; brings 20+ years of finance, treasury, M&A experience.
• General Manager Appointment: Rogerio Barcellos effective July 11 2025; tasked with debottlenecking Santa Cruz plant and expanding capacity to 10,000 t/yr graphite concentrate.
• Director Resignation: Roger Mortimer resigned on August 20 2025.
• Production Update – First Shipment (May 7 2025): ~20 t of graphite concentrate produced over eight months; product mix 75 % fines / 25 % flakes (design: 33 % fines / 66 % flakes).
• Production Update – Second Shipment: Same 20 t produced in 1.5 months; product mix improved to 25 % fines / 75 % flakes, aligning closer to design specifications.
• Cost‑Saving Review: Potential ~40 % operating cost reduction identified through permanent (energy efficiency) and temporary measures during next six months of ramp‑up.
• Contractor Agreements: All contractor agreements under re‑evaluation to further reduce cash costs during plant debottlenecking.
• Strategic Partnerships: Company actively evaluating partnerships to strengthen cash position, market presence, and accelerate capital execution.
• Financing Outlook: Proceeds from private placements (announced Sep 30 2025) and the Sprott Bridge Loan Facility (announced Aug 26 2025) expected to fund achievement of 5,000 t/yr design capacity in 2026.

Notable Quotes

• “The appointment of Tiago Cunha as Interim CEO brings seasoned capital‑markets expertise at a critical time for South Star,” – Marc Leduc, Chairman of the Board.
• “Our operational improvements and cost‑saving initiatives demonstrate that we are on track to meet our design capacity targets and deliver value to shareholders,” – Darren Prins, CFO.