South Star Announces Closing of First Tranche of Private Placement, Extension and US$450,000 of Bridge Loans
- NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES -
VANCOUVER, British Columbia, Aug. 06, 2025 (GLOBE NEWSWIRE) -- South Star Battery Metals Corp. ("South Star" or the "Company") (TSXV:STS) (OTCQB:STSBF), is pleased to announce that it that it has successfully completed an initial tranche of its non-brokered private placement (the "Private Placement") of units (the "Units") for gross proceeds of US$302,610 (CA$415,263.45). Proceeds from the Private Placement will be used for development and production, as well as corporate general working capital requirements. Additionally, the TSX Venture Exchange (the "TSXV") has granted an extension to the closing time of the Private Placement. The extended date for final acceptance of the Private Placement is now August 22, 2025.
Tranche 1 of the Private Placement consists of issuing 1,375,500 Units consisting of a common share priced at US$0.22 (CA$0.3019) and 1,375,500 common share purchase warrants. Each warrant is exercisable into one common share at a price of US$0.22 (CA$0.3019) for 5 years from the date of issue (the "Warrants"). The Units issued pursuant to the Private Placement will be subject to a four-month hold period. Closing of the Private Placement is subject to customary closing conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange. In connection with the Private Placement, the Company paid finder's fees of $4,296.60 and issued 19,530 non-transferable finder's warrants. Each finder's warrant is exercisable into one common share at a price of US$0.22 (CA$0.3019 for 5 years from the date of issue (the "Finder's Warrants").
The Warrants and Finder's Warrants include an acceleration clause whereby, if at any time after the four-month hold period and before expiry, the daily volume-weighted average price of the Common Shares on the Exchange (or other principal exchange) equals or exceeds C$1.25 for ten (10) consecutive trading days, the Company may provide notice that all unexercised Warrants will expire 30 days after such notice.
An Insider of the Company participated in the Private Placement for an aggregate amount of US$220,000 for 1,000,000 Units. The transaction with the insider constitutes a "related party transaction" as defined under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on the exemptions under section 5.5(a) and section 5.7(1)(a) from the formal valuation and minority shareholder approval requirements of MI 61-101, as the fair market value of the Units issued to the related party and the consideration paid by the related party under the Private Placement does not exceed 25% of Company's market capitalization, as determined in accordance with MI 61-101.
Furthermore, South Star announces that is has received bridge loans for gross proceeds of US$450,000. The bridge loans are intended to provide short term funding while the Company pursues closing the subsequent tranche of the private placement, as previously announced by the Company on July 3, 2025.
The bridge loans are evidenced by unsecured promissory notes (the "Notes"), which bear interest at 1% per month (12% per annum, compounded monthly) and mature on January 7, 2026 (the "Maturity Date"), unless repaid earlier in accordance with their terms. The Company may prepay the Notes at any time without penalty.
The Notes are subject to acceleration upon certain conditions, including the completion of subsequent debt financing of at least US$500,000 or equity financings totaling at least US$3,000,000 during the term. Upon acceleration, all outstanding principal and accrued interest become payable ...
