Mr. Richard Pearce reports

SOUTH STAR BATTERY METALS ANNOUNCES CORPORATE UPDATE INCLUDING SANTA CRUZ GRAPHITE MINE PHASE 1 CONSTRUCTION UPDATE

South Star Battery Metals Corp. has provided a phase 1 construction update for the Santa Cruz graphite mine in Bahia Brazil, and has provided a general corporate update.

Highlights:

• Santa Cruz phase 1 construction is on budget and on schedule through end of April with commercial production planned for the EOY (end of year) 2023.
• Drilling at BamaStar to support National Instrument 43-101 preliminary economic assessment (PEA) mobilized May 15, 2023, for a two-month diamond drilling program.
• South Star is reviewing proposals for the NI 43-101 preliminary economic assessment (PEA) scheduled for end of Q1 2024.
• South Star will participate in 121 Mining Investment Conference in New York and Benchmark Gigafactories USA conference in Washington, D.C.
• South Star has hired a new market making service provider.
• Closing of private placement.

Richard Pearce, chief executive officer of South Star, commented: "Santa Cruz construction on the phase 1 plant and mine installations continues on budget and on schedule through the end April, 2023. BamaStar is moving forward. The same drillers we used on the maiden resource program at BamaStar mobilized May 15 for a two-month diamond drilling campaign in support of the upcoming PEA, which will present our five-to-seven-year strategic plan of two mines producing a 100,000 tonne per year (tpy) of high-quality concentrates and 60[,000] to 70,000 tpy of value-add and battery anode materials. South Star has two scalable assets in strategic, stable, mining-friendly jurisdictions, and the team to build and operate them in a safe responsible manner in partnership with communities and stakeholders. It's happening at the perfect time, when supply is constrained and demand is growing exponentially. This dynamic is expected to place significant pressure on the graphite price in 2023 and for the foreseeable future. Santa Cruz will be the first new graphite producer in the Americas since 1996, and BamaStar is expected to be producing in 2027."

Santa Cruz construction and licensing update

Construction through the end of April, 2023, is on schedule and on budget for phase 1 commercial production at the EOY 2023. Q2 2023 the main work programs include:

• Civil construction, foundations and retention walls for the plant area;
• Civil infrastructure including entrance, security, additional offices, supply chain storage warehouse and contractor support area;
• Electrical substation and internal electrical distribution network;
• Delivery of approximately 35 per cent of the major equipment.

BamaStar PEA

The drilling company has mobilized for a two-month drilling program in support of the upcoming PEA, planned for completion end of Q3 2024. The driller is the same company that completed the recently filed maiden resource definition drilling program. The PEA program will include approximately 1,500 to 2,000 metres, and the goals are to expand the existing mineral resources, continue testing boundaries and improve the understanding of the geology and mineralization controls. The drilling program includes both stepout drilling to expand resource definition and some infill drilling to upgrade inferred resources into measured and indicated categories. The program will also include some oriented core in key holes to better understand structures and geotechnical/geomechanical parameters.

In addition, the company is reviewing proposals for the upcoming PEA, which will present the five-to-seven-year strategic plan of two mines in strategic jurisdictions producing a 100,000-tonne-per-year (tpy) of high-quality concentrates and 60,000 to 70,000 tpy of value-add and battery anode materials. The company is advancing with studies associated with value-add physical and chemical characterizations, battery suitability tests, as well as floatation, purification, micronization and spheronization technologies.

South Star participation in upcoming 121 Mining Investment Conference in New York and the Benchmark Minerals Intelligence Gigafactory USA Conference in Washington, D.C.

South Star is pleased to announce its participation in the upcoming 121 Mining Investment Conference in New York on June 5 to June 6. 121 Mining Investment New York will be hosting approximately 80 mining companies and more than 300 investors for two days of targeted one to one meetings. In addition, the company will be participating in the Benchmark Minerals Intelligence Battery Gigafactories USA 2023 Conference in Washington, D.C., on June 8 to June 9. The conference will explore the rise of the United States's lithium ion battery gigafactory economy and the need to build secure, sustainable supply chains for lithium, nickel, graphite, cobalt, manganese, rare earths and other critical raw materials.

South Star retains Red Cloud Securities Inc. to provide market-making services

South Star has retained Red Cloud Securities Inc., an arm's-length party, to provide market stabilization and liquidity services in compliance with the policies and guidelines of the TSX Venture Exchange. Red Cloud is an established IIROC (Investment Industry Regulatory Organization of Canada) regulated broker dealer offering corporate issuers advisory, investment banking, research and distribution services. As consideration for the services, the company has agreed to pay Red Cloud a flat monthly fee of $5,000, payable quarterly in advance. Red Cloud will provide the services on an ongoing basis unless the agreement is terminated by either party with no less than 30 days of prior notice.

Red Cloud and/or its clients may have an interest, directly or indirectly, in the securities of the company. There are no performance factors contained in the agreement with Red Cloud and Red Cloud will not receive any common shares or options from the company as compensation for its services. The engagement of Red Cloud is subject to the approval of the TSX Venture Exchange.

Closing of a non-brokered private placement

South Star has completed a non-brokered private placement of units for total proceeds of $67,800.25. Net proceeds from the private placement will be used for exploration, development, phase 1 construction activities, corporate G&A (general and administrative) and general working capital requirements. Phase 1 commercial production is planned for Q4 2023.

The private placement consists of 127,925 units priced at 53 cents per unit. Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the company at an exercise price of $1.25 per common share for a period of five years from the date of issue, subject to acceleration as set out herein. The securities issued in this private placement will be subject to a four-month hold period from the date of closing and approval by the TSX-V, expiring Sept. 24, 2023.

If during a period of 10 consecutive trading days between the date that is four 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-V (or such other stock exchange where the majority of the trading volume occurs) exceeds $2.50 for each of those ten 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 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 p.m. (Vancouver time) on the 30th day following the giving of such notice will expire at that time.

About South Star Battery Metals Corp.

South Star Battery Metals is a Canadian battery metals project developer focused on the selective acquisition and development of near-term production projects in the Americas. South Star's Santa Cruz graphite project, located in southern Bahia, Brazil, is the first of a series of industrial and battery metals projects that will be put into production. Brazil is the second-largest graphite-producing region in the world with more than 80 years of continuous mining. Santa Cruz has at-surface mineralization in friable materials and successful large-scale pilot-plant testing (over 30 tonnes (t)) has been completed. The results of the testing show that approximately 65 per cent of Cg concentrate is plus-80 mesh with good recoveries and 95 per cent to 99 per cent Cg. With excellent infrastructure and logistics, South Star is fully financed for phase 1, and the 12-month construction and commissioning are under way. Santa Cruz will be the first new graphite production in the Americas since 1996, with phase 1 commercial production projected in Q4 2023. Phase 2 production (25,000 tonnes per year (tpy)) is partially financed and planned for 2026, while phase 3 (50,000 tpy) is scheduled for 2028.

South Star's second project in the development pipeline is strategically located in Alabama in the centre of a developing electric vehicle, aerospace and defence hub in the southeastern United States. The BamaStar project is a historic mine active during World Wars I and II. Trenching, phase 1 drilling, sampling, analysis and preliminary metallurgical testing have been completed. The testing indicates a traditional crush/grind/flotation concentration circuit that achieved grades of approximately 94 per cent to 97 per cent Cg, with approximately 86 per cent recoveries. South Star is executing on its plan to create a multiasset, diversified battery metals company with near-term operations in strategic jurisdictions.

South Star is committed to a corporate culture, project execution plan and safe operations that embrace the highest standards of ESG (environmental, social and governance) principles based on transparency, stakeholder engagement, continuing education and stewardship.

This news release has been reviewed and approved by Richard Pearce, PE, a qualified person under National Instrument 43-101 and president and chief executive officer of South Star Battery Metals.

We seek Safe Harbor.