Financings
South Star Announces Closing of Final Tranche of Non-Brokered Private Placement of Shares
South Star Battery secures $4.8m to ramp up the Santa Cruz graphite project ahead of its first shipment.
Executive Summary
- South Star Battery Metals Corp. closed the final tranche of a non-brokered private placement, issuing 16,587,667 shares at CAD $0.15 for CAD $2,488,000, bringing total gross proceeds to CAD $4,800,000.
- The offering included significant insider participation, with Interim CEO Tiago Cunha and Director Priscila Costa Lima purchasing shares, raising their combined directional control to 29.67%.
- Proceeds are allocated to capital expenditures for expanding the Santa Cruz graphite operation to 10,000 tonnes per annum, alongside corporate G&A and working capital.
- Concurrently, the company reported May operational results, transitioning the Santa Cruz plant to a continuous 24-hour cycle.
- Throughput reached ~5,136 tonnes of ROM ore since restart, producing ~25 tonnes of graphite concentrate at grades up to 97% carbon.
- The first graphite concentrate shipment has been prepared, marking a transition toward commercial sales.
- Near-term objectives focus on stabilizing filtration, optimizing the grinding circuit, and scaling to the technical report target of 5,000 tonnes per annum.
Material Impact
- The financing closing is an expected follow-up to the May announcements and upsizing. It provides necessary liquidity but comes with ~15% dilution.
- The operational update confirms the April restart is progressing as planned. Achieving a 24-hour cycle and producing 97% grade concentrate are positive incremental milestones.
- However, the volume produced (~25 tonnes) is minimal relative to the 5,000 tpa target. The company is still in the commissioning and optimization phase.
- The cash infusion of CAD $4.8M, combined with existing cash, addresses the immediate working capital deficit but does not eliminate the going concern risk long-term without sustained production and revenue.
- The news is positive but routine, reflecting planned capital deployment and expected operational milestones.
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Company Overview
- South Star Battery Metals Corp. is a graphite developer focused on the Santa Cruz Graphite Mine in Brazil.
- The flagship project underwent a six-month shutdown for upgrades and successfully restarted in April 2026, three months ahead of schedule.
- The company abandoned the BamaStar graphite project in Alabama to focus resources on Santa Cruz.
- The plant is currently operating on a single-shift basis transitioning to 24-hour operations, with a target of 5,000 tpa in the near term and 10,000 tpa upon expansion.
- The company is evaluating downstream processing partnerships in the United States to enhance value chain returns.
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Jun 09, 2026 · 09:30