Mr. Richard Pearce reports

SOUTH STAR BATTERY METALS ANNOUNCES SANTA CRUZ GRAPHITE MINE PHASE 1 CONSTRUCTION AND LICENSING UPDATE

South Star Battery Metals Corp. has provided a phase 1 construction update through the end of July for the company's flagship Santa Cruz graphite mine in Bahia, Brazil, as well as providing a permitting and licensing update for phases 2 and 3 operations.

Richard Pearce, chief executive officer of South Star, commented: "We are extremely pleased with the construction progress through the end July on the Santa Cruz phase 1 plant and mine installations. The build continues on budget and on schedule, and we are very proud of our ongoing safety record. The team will continue to work hard and focus on our ongoing commitment to safe, responsible operations. Significant progress has been made on the concrete and foundation work, which should be substantially completed in next couple weeks. Equipment manufacturing is on schedule and should be largely wrapped up in next six weeks, with all major equipment delivered to the mine. The electrical and mechanical contractor is in the process of mobilizing. We are firmly on track to be commissioning Santa Cruz in November and starting commercial production by EOY [end of year] 2023. Notably, the start of commercial production at Santa Cruz will be a significant milestone achievement marking the first new graphite producer in the Americas since 1996. Additionally, our BamaStar projected is expected to commence vertically integrated production in 2027."

Santa Cruz construction and licensing update

Construction through the end of July, 2023, is on schedule and on budget for phase 1 commercial production planned for the EOY 2023. South Star's Q3 2023 primary work programs include:

• Civil construction, foundations and retention walls for the plant area;
• Structural, electrical and mechanical assemblies;
• Electrical substation and internal electrical distribution network;
• Laboratory, cafeteria, changing rooms, warehouse, shops and other appurtenant support structures;
• Delivery of 100 per cent of the major equipment.

Initial comments from Brazil's National Mining Agency have been received and responded to for the majority of the final mining concessions incorporating a phased approach to phases 1, 2 and 3 and up to 50,000 tonnes per year of concentrate production. The biannual condition precedents report associated with Santa Cruz's environmental licence has also been submitted to the environmental regulatory agency. The company expects to receive the definitive mining licences and environmental permits for phases 1, 2 and 3 in early Q1 2024.

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 (greater than 30 tonnes) 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 tpa) is partially financed and planned for 2026, while phase 3 (50,000 tpa) is scheduled for 2028.

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

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