South Star arranges private placements of units, notes

Executive Summary

• South Star Battery Metals Corp. announced a non‑brokered private placement of up to 27.8 million units for gross proceeds of up to C$4.17 M (US$3.0 M), each unit consisting of one common share plus one warrant priced at C$0.15 per unit.
• Concurrently, the company is offering unsecured convertible notes for gross proceeds of up to C$2.085 M (US$1.5 M); the notes bear 12% annual interest and will automatically convert into units at C$0.15 per note‑unit upon shareholder approval.
• The combined net proceeds are earmarked for exploration, development, corporate G&A expenses, and working capital, potentially diluting existing shareholders but providing needed capital for project advancement.

Key Details

• Unit Offering
• Up to 27.8 million units at C$0.15 per unit (≈ US$0.05).
• Each unit = 1 common share + 1 warrant.
• Warrant exercise price: C$0.20 per share, exercisable for 5 years from closing.

• Acceleration clause: if TSX‑V share price ≥ C$0.40 for 10 consecutive trading days after four months, warrants may be forced to expire 30 days after notice.

• Convertible Note Offering

• Principal amount: C$2.085 M (US$1.5 M).
• Interest rate: 12% per annum, payable in cash at maturity (one year) or upon conversion.
• Automatic conversion trigger: shareholder approval; notes convert into units at C$0.15 per note‑unit within 15 business days of approval.

• Converted note units have identical composition and warrant terms as the unit offering.

• Insider Participation

• Interim CEO/President & Director Tiago Cunha (and affiliates) will subscribe for the full C$2.085 M note amount.

• Cunha currently controls ~18.66% of outstanding shares; conversion would make him a control person, requiring shareholder approval per exchange policy.

• Use of Proceeds

• Exploration and development of existing projects (e.g., Santa Cruz graphite project, BamaStar project).
• Corporate general & administrative expenses.

• General working capital.

• Regulatory/Closing Conditions

• Offerings made to accredited investors in Canada under NI 45‑106 and to non‑Canadian investors on a qualification‑exempt basis.
• Subject to customary closing conditions, statutory hold periods, and receipt of all required corporate and regulatory approvals (including exchange approval).

• No minimum aggregate subscription amount.

• Finder’s Fees

• Company may pay finder’s fees within limits permitted by exchange policies.

Notable Quotes

(No direct quotes were provided in the release.)