South Star Announces Corporate Update

The March 10, 2026, update provides three key developments: - Operational Progress: A critical scrubber/trommel has been installed at the Santa Cruz mine in Brazil. Testing begins next week with a four-week commissioning period expected. - Strategic Pivot: The company is officially abandoning the BamaStar graphite project in Alabama, USA, citing project economics that fell below expectations. - Management Change: Rogerio Barcellos has been promoted to Chief Operating Officer (COO) and granted 1,000,000 RSUs tied to strict production milestones (5,000 tonnes and 10,000 tonnes per year).

The impact is Neutral. While the installation of the scrubber is a necessary step toward restarting the Santa Cruz plant (which has faced significant delays and equipment failures since 2025), it is a routine operational update. The abandonment of BamaStar is a double-edged sword: it removes a potential growth pillar but preserves capital for the struggling Santa Cruz flagship. The market likely anticipated BamaStar's struggles given the company's recent desperate need for capital and management turnover. The RSU grants for the new COO are heavily weighted toward achieving "stable production," which aligns management with shareholders but highlights that the mine is still not operating at its nameplate capacity.

South Star is focused on the Santa Cruz Graphite Mine in Bahia, Brazil. It was touted as the first new graphite production in the Americas since 1996. However, after a "first shipment" in mid-2025, the company faced severe bottlenecks (high-frequency screens, rod mills, and filter presses failing to meet specs). The project is currently being "debottlenecked" to reach a Phase 1 target of 5,000 tpy, with a long-term goal of 50,000 tpy.