Published on February 4, 2019 in News RNS

South Star Mining Announces Strategic Private Placement to Advance the Santa Cruz Graphite Project

February 4th, 2019 – Vancouver, B.C. – South Star Mining Corp. (“South Star” or the “Company”) (TSXV: STS) (OTCQB: STSBF) announces that it intends to complete an insider-led, non-brokered private placement of Units (the “Private Placement”) to raise C$500,000.  Management and insiders have committed to purchase a minimum of C$400,000 of the offered Units.

The Private Placement will consist of 5,000,000 Units priced at C$0.10 per unit (the “Units”). Each Unit will consist of one (1) common share and one (1) common share purchase warrant (the “Warrants”). Each Warrant will entitle the holder to purchase one additional common share of the Company at an exercise price of C$0.15 per common share for a period of 2 years from the date of issue.   The securities will be subject to a four month hold period from the date of closing and approval by the TSX Venture Exchange.  The Private Placement will be available to existing shareholders of the Company and all Warrants issued under the Private Placement will be subject to an acceleration clause. See below for further details.

The proceeds from the Private Placement will be used to advance on-going work at the Santa Cruz Graphite Project including engineering, testing, environmental permitting and licensing.  CEO Eric Allison commented “After the successful completion of our drilling campaign in Q4 of 2018, we are excited to be moving to the next phases of the project.  Our objective this year will be to complete those critical activities, deliver a 43-101 prefeasibility study and obtain a trial mining license for the planned 5,000 tonnes per year plant.  It is a strong endorsement of the value of the project that the members of our team have agreed to support this financing and help push Santa Cruz towards production as rapidly as possible.”

Acceleration Clause, Existing Shareholder Exemption and Investment Dealer Exemption

If over a period of 10 consecutive trading days between the date that is four (4) months following the closing of the private placement and the expiry of the Warrants, the daily volume weighted average trading price of the common shares of the Company on the TSX Venture Exchange (or such other stock exchange where the majority of the trading volume occurs) exceeds $0.25 on each of those 10 consecutive days, the Company may, within 30 days of such an occurrence, give written notice to the holders of the Warrants that the Warrants will expire at 4:00 p.m. (Vancouver time) on the 30th day following the giving of notice unless exercised by the holders prior to such date.  Upon receipt of such notice, the holders of the Warrants will have 30 days to exercise their Warrants.  Any Warrants which remain unexercised at 4:00 p.m. (Vancouver time) on the 30th day following the giving of such notice will expire at that time.

In addition to other prospectus exemptions commonly relied on in private placements, the Offering will be available to existing shareholders of the Company who, as of the close of business on February 1, 2019, held common shares of the Company (and who continue to hold such common shares as of the closing date), pursuant to the prospectus exemption set out in BC Instrument 45-534 – Exemption From Prospectus Requirement for Certain Trades to Existing Security Holders and in similar instruments in other jurisdictions in Canada (the “Existing Shareholder Exemption”). The Existing Shareholder Exemption limits a shareholder to a maximum investment of CAD$15,000 in a 12-month period unless the shareholder has obtained advice regarding the suitability of the investment and, if the shareholder is resident in a jurisdiction of Canada, that advice has been obtained from a person that is registered as an investment dealer in the jurisdiction. If the Company receives subscriptions from investors relying on the Existing Shareholder Exemption exceeding the maximum Offering, the Company may adjust the subscriptions received on a pro-rata basis.

The Company will also make the Offering available to certain subscribers pursuant to BC Instrument 45-536 – Exemption From Prospectus Requirement for Certain Distributions Through an Investment Dealer (the “Investment Dealer Exemption”). In accordance with the requirements of the Investment Dealer Exemption, the Company confirms that there is no material fact or material change about the Company that has not been generally disclosed.

In connection with the private placement, the Company proposes to issue Units to directors, officers and insiders of the Company.  As a result, the private placement will constitute a related party transaction pursuant to TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 (“MI 61-101”).  The Company has determined that exemptions from the various requirements of TSX Venture Exchange Policy 5.9 and MI 61-101 are available for the issuance of the Units to related parties. The Company will rely on Section 5.5(c) of MI 61-101 for an exemption from the formal valuation requirement on the basis that the transaction will be a distribution of securities for cash, and on Section 5.7(1)(b) of MI 61-101 for an exemption from the minority shareholder approval requirement, as the fair market value of the transaction, insofar as it involves related parties, will not be more than $2,500,000.

ABOUT SOUTH STAR MINING CORP.

South Star Mining Corp. is focused on the acquisition and development of near-term mine production projects to maximize shareholder value. The Company is currently advancing the Santa Cruz Graphite Project toward planned production in the Bahía State of Brazil. To learn more, please visit the Company website at www.southstarmining.com.

On behalf of the Board,

Mr. Eric Allison
Chief Executive Officer
Ph: +1 (203) 918-3098
Email: [email protected]

For additional information, please contact:

Dave McMillan
Chairman
Ph: +1 (778) 773-4560
Email: [email protected]

Mr. Kris Kottmeier
VP Corp Development
Ph: +1 (604) 506-2502
Email:  [email protected]hstarmining.ca

CAUTIONARY STATEMENT
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

This news release and the PEA contain references to inferred resources. The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized.

Forward-Looking Information
This news release contains “forward-looking information” within the meaning of applicable securities laws. Generally, any statements that are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or indicates that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, “occur” or “be achieved”. Although the Company believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements.