South Star Announces Corporate Updates: Santa Cruz Plant Progress and Corporate Planning

• Operational Success: The Santa Cruz plant successfully completed its first week of operations following a restart approximately three months ahead of schedule.
• Production Status: Currently operating on a single-shift basis with plans to scale to 5,000 tonnes per year of concentrate as workforce training completes.
• Plant Performance: Mechanical and electrical systems showed reliable performance in the first week with no reported leaks or bottlenecks.
• Financing Pivot: The Board has decided to pursue alternative financing options rather than continuing with existing Sprott streaming and bridge loan agreements.
• Management Commentary: Interim CEO Tiago Cunha noted operational results exceeded expectations, highlighting improvements made to handle wet saprolite ore compared to last year's start.

• Operational Milestone: The successful restart ahead of schedule is a positive validation of the plant upgrades completed in early 2026 (scrubber/trommel, drying system). This confirms management's ability to execute on commissioning timelines previously set for April 2026.
• Financing Uncertainty: The decision to abandon the Sprott streaming and bridge loan agreements introduces significant uncertainty regarding future capital needs. While the company raised $4.8M in November 2025, abandoning a committed term sheet just as production ramps up suggests potential liquidity constraints or strategic disagreements on valuation/terms that were not previously disclosed.
• Market Expectations: The operational progress was largely anticipated following the April 8, 2026 restart announcement and March 10, 2026 equipment installation news. Therefore, the operational update is incremental rather than transformative.
• Risk Profile: The financing shift is a material risk factor. If alternative financing is not secured quickly, it could delay scaling to 5,000 tonnes/year or force further dilution at unfavorable terms.

• Company: South Star Battery Metals Corp. is a critical minerals developer focused on graphite production in Brazil.
• Flagship Project: Santa Cruz Graphite Mine (Itabela, Brazil). Phase 1 nameplate capacity is 12,000 tonnes per year (tpy), with licensed capacity up to 50,000 tpy for future phases.
• Product: Natural flake graphite concentrate targeting North American and global battery materials markets.
• Development Status: Commercial production commenced in June 2025 with first shipment. Currently ramping up operations following a period of idle time (approx. six months prior to April 2026 restart).