South Star Announces Indicative Term Sheet for US$4M Debt Financing for the Santa Cruz Graphite Mine in Brazil and Appointment of New CFO
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Non-Binding Indicative Term Sheet for a US$4,000,000 loan facility with Sprott Streaming over a 3-year maturity period for the Santa Cruz Graphite Mine in Brazil;
The funds will be used to support the continued development and optimization of the Phase 1 Santa Cruz Graphite Mine in Brazil; and
South Star and Sprott are working on the definitive documentation and expect the financing to close on an expediated schedule.
Mr. Darren Prins has been appointed to the role of chief financial officer.
VANCOUVER, British Columbia, Aug. 26, 2025 (GLOBE NEWSWIRE) -- South Star Battery Metals Corp. ("South Star" or the "Company") (TSXV:STS) (OTCQB:STSBF), is pleased to announce that it has signed a non-binding indicative term sheet ("Term Sheet") with Sprott Streaming and Royalty ("Sprott Streaming") for a US$4,000,000 loan facility ("Loan") to support the continued development of the Phase 1 Santa Cruz Graphite Mine in Brazil. The Loan has a 3-year maturity, with final terms and Loan documentation being finalized on an expedited basis. The initial Loan tranche of US$200,000 at closing is conditional on US$2,000,000 equity or subordinated debt financing.
A detailed development plan and use of proceeds has been prepared to further improve operational performance, de-risk the production ramp-up, and ensure consistent product quality at Santa Cruz. The Loan proceeds will be used exclusively for Santa Cruz Graphite Mine for equipment adjustments and upgrades, working capital and ongoing process optimization aimed at enhancing operational efficiency for 450 tonnes per month ("tpm") of concentrate production and supporting the continued transition to 1,000 tpm. Funds will also be used to enhance operating robustness while adding financial flexibility to ensure the smooth execution of the development plan.
Richard Pearce, CEO of South Star, commented, "We are very pleased to continue our financing partnership with Sprott Steraming, a globally recognized leader in resource investments. This facility provides flexible, milestone-based funding that will allow us to continue advancing the Santa Cruz Graphite Mine into consistent production and to further strengthen our position as a critical materials supplier for the energy transition. We look forward to building long-term value for our shareholders as we execute on our growth strategy."
Key Loan Terms
Loan Amount:
US$4,000,000.
Loan Term:
3 years (36 months) from Loan closing.
Disbursement:
Funds will be made available in tranches based on agreed upon milestones over a 24-month period following the Loan closing.
Interest Rate:
12% per annum (compounded monthly) for first 24 months; 18% per annum for the final 12-month period.
Grace Period:
12 months with accrued interest capitalized to principal amount.
Repayment Terms:
Quarterly cash interest payments after 12-month grace period. Repayment of amortized interest and principal starting 18 months after the Loan closing. 50% of the principal and capitalized interest will be amortized over the following 24 months, with the remaining 50% due at maturity.
Senior Security:
