Mr. Richard Pearce reports

SOUTH STAR BATTERY METALS ANNOUNCES CLOSING OF TRANCHE 2 OF OVERSUBSCRIBED, NON-BROKERED PRIVATE PLACEMENT AND TWO-YEAR EXTENSION OF THE BAMASTAR LANDOWNERS/MINERAL RIGHTS AGREEMENT

South Star Battery Metals Corp. has completed the successful closing of the second and final tranche of its oversubscribed, upsized non-brokered private placement by issuing 2,485,209 shares priced at 72 cents per common share, for additional gross proceeds of $1,789,352. Proceeds from the private placement will be used for accelerating exploration, development, construction activities, as well as corporate general and administrative, and general working capital requirements.

The private placement consists of issuing a total of 9,301,532 shares priced at 72 cents per share for a total gross proceeds of $6,697,119 (refer to the company's press releases dated Dec. 14, 2023, Jan. 26, 2024, and Feb. 13, 2024). The shares 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 final approval of the TSX Venture Exchange. In connection with the second tranche, the company paid $46,250 in cash and issued 44,452 shares in equity as finders' fees.

A director and an officer of the company participated in the private placement for an aggregate amount of $57,600. The transaction with the officer constitutes a "related party transaction" as defined under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. 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 per cent of the company's market capitalization, as determined in accordance with MI 61-101. The company did not file a material change report in respect of the related party transaction at least 21 days before the closing of the private placement, as the details of the participation by related party of the company were not settled until shortly prior to closing of the private placement.

In addition, South Star and its BamaStar project partners Hexagon and US Critical Minerals have extended the current existing mineral leases and surface agreements on the project for an additional two-year period beyond the initial five-year term of the original agreements (refer to the company's press release dated Dec. 7, 2021). The earn-in option agreement remains unchanged.

Richard Pearce, chief executive officer of South Star, commented: "We are very excited to get the oversubscribed private placement successfully closed and be on very solid financial footing, while also executing on our strategy of near-term production with scalable graphite assets in Tier 1 jurisdictions at a critical time when the global supply chains require more graphite products sourced outside of China. We are aiming to produce at Santa Cruz around 5,000 tonnes of graphite concentrates in 2024 and 13,000 tonnes in 2025. We are getting ready to kick off our National Instrument 43-101 preliminary economic assessment for BamaStar, including the value-add plant in the southeast corridor of the U.S., which we are planning to have preliminary results completed in approximately three months. We had excellent meetings recently with the Economic Development Partnership of Alabama, as well as the Louisiana Economic Development Agency. Two thousand and twenty-four is going to be an exciting year for South Star as we become the first new graphite producer in the Americas this century."

About South Star Battery Metals Corp.

South Star 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 large0-scale pilot plant testing (more than 30 tonnes) has been completed. The results of the testing show that approximately 65 per cent of curium (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 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 the first quarter of 2024. Phase 2 production (25,000 tonnes per annum) is partially financed and planned for 2026, while phase 3 (50,000 tonnes per annum) is scheduled for 2028.

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