South Star Battery Metals Corp. (TSXV: STS, OTCQB: STSBF) announces a revised financing plan that raises the ceiling of its previously disclosed non-brokered private placement. The company has expanded the Share Offering from CAD $4,000,000 to up to CAD $4,800,000, reflecting robust market appetite. Under the upsized program the offering now contemplates the issuance of up to 32,000,000 common shares priced at CAD $0.15 each.
Transaction structure and recent closings
The increased size is a direct response to oversubscription of the original order book disclosed in the news release dated May 6, 2026, and all other terms remain consistent with that announcement. The company has moved to complete the first tranche, issuing 15,413,333 Shares at CAD $0.15 per share for gross proceeds of CAD $2,312,000. This first closing is being advanced subject to conditional approval from the TSX Venture Exchange (TSXV), and the company expects to complete the second and final tranche on or before May 29, 2026, subject to final approval by the TSXV.
Use of proceeds and operational priorities
Net proceeds from the offering will be allocated to scale and advance South Star’s operating plans. A principal use of funds will be capital expenditures tied to expanding the Santa Cruz graphite project in southern Bahia, Brazil, with the objective of reaching a production capacity of 10,000 tonnes per annum. Additional allocations will cover corporate general and administrative expenses and support ongoing working capital needs. The Santa Cruz graphite project is positioned as the company’s lead development asset and benefits from Brazil’s long history as a major graphite-producing region.
Timing and regulatory conditions
The company anticipates closing additional tranches in the weeks ahead; each closing will be conditional on customary conditions including receipt of required corporate and regulatory approvals. All Shares issued will be subject to a statutory hold period of four months and one day from issuance, in accordance with applicable securities laws. The company reiterates that the first tranche remains contingent upon final exchange approvals.
Insider involvement and governance considerations
All shares issued in the first tranche were acquired by a fund directed and controlled by Tiago Cunha, who serves as interim CEO, President and a director of the company. As a result of this purchase, Mr. Cunha now has direction and control of approximately 38.23% of the issued and outstanding common shares. Because this constitutes a related party transaction under Multilateral Instrument 61-101 (MI 61-101), South Star is relying on exemptions from the formal valuation and minority shareholder approval requirements provided by sections 5.5(a) and 5.7(1)(a) of MI 61-101, on the basis that the fair market value of the securities subscribed for does not exceed 25% of the company’s market capitalization.
Management comment
Management explains that the upsizing and allocation changes were made to accommodate strong demand from existing shareholders seeking to preserve their proportional ownership. Mr. Cunha’s fund reduced its relative participation to ensure strategic shareholders could participate, demonstrating a willingness to balance insider support with shareholder access to the financing.
Regulatory notice and company profile
This announcement is not being distributed in the United States and does not constitute an offer to sell or a solicitation of an offer to buy securities in the United States. The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933 and cannot be offered or sold in the United States absent registration or an available exemption. Investors should note the statutory hold period and regulatory approvals that apply to the transaction.
South Star is a Canadian developer focused on near-term battery metals projects in the Americas. Its flagship asset, the Santa Cruz graphite project in Bahia, Brazil, is intended as the company’s initial production-stage operation. The project leverages Brazil’s long-standing graphite mining industry and regional logistics to position Santa Cruz as a future producer serving North American and global markets. South Star trades on the TSX Venture Exchange under the symbol STS and on the OTCQB under the symbol STSBF.
Forward-looking statements and risk factors
This release contains forward-looking statements concerning expectations about completing subsequent tranches, anticipated gross proceeds and planned uses of funds, timing for shareholder and regulatory approvals, and broader business plans. Forward-looking information relies on management’s assumptions and is subject to risks such as the ability to secure financing on acceptable terms, regulatory and political factors affecting mining operations, environmental and permitting risks, potential delays in project development, commodity price volatility, and other uncertainties set out in South Star’s disclosure record. Additional details are available under the company’s profile on SEDAR+.
For more information, contact South Star Investor Relations at [email protected] or by phone at +1 (303) 519-5149. On behalf of the Board of Directors, Mr. Marc Leduc, Chairman, approved this release for distribution.
