Mr. Tiago Cunha reports

SOUTH STAR ANNOUNCES NON-BROKERED PRIVATE PLACEMENTS

South Star Battery Metals Corp. has arranged a non-brokered private placement of units for gross proceeds of up to $4.17-million ($3.0-million (U.S.)) and a concurrent non-brokered private placement of unsecured convertible notes for gross proceeds of up to $2,085,000 ($1.5-million (U.S.)).

Unit offering

The company intends to issue up to 27.8 million units pursuant to the unit offering at a price of 15 cents per unit. Each unit will consist of one common share and one common share purchase warrant. Each warrant will entitle the holder to acquire one share at a price of 20 cents per warrant share for a period of five years from the closing date, subject to acceleration. The expiry date of the warrants may be accelerated, at the option of the company, if, at any time after four months following the closing date, the closing price of the company's common shares on the TSX Venture Exchange is at or above 40 cents for 10 consecutive trading days, provided that the company gives 30 days prior notice to the holders by news release, in which case all unexercised warrants will expire at the end of such 30-day period.

Note offering

Tiago Cunha, interim chief executive officer, president and a director of the company, together with his affiliates, has agreed to subscribe for $2,085,000 ($1.5-million (U.S.)) principal amount of notes pursuant to the note offering. The principal amount of the notes will automatically convert into units of the company at a price of 15 cents per note unit subject to and effective within 15 business days of the company obtaining shareholder approval for the conversion of the notes. The note units will have the same composition and terms as the units issued in the unit offering, consisting of one share and one warrant, with each warrant exercisable into one warrant share at 20 cents for five years, subject to acceleration on the terms described above.

Mr. Cunha and affiliated entities currently own or control 11,555,552 shares, representing approximately 18.66 per cent of the company's issued and outstanding shares. Accordingly, the conversion of the issuance of the note units will result in Mr. Cunha becoming a control person of the company and is subject to shareholder approval under the policies of the exchange. The company intends to convene a meeting of its shareholders to seek such approval.

The notes will bear interest at 12 per cent per annum, payable in cash on the maturity date, being one year from the closing date, unless earlier converted pursuant to the automatic conversion trigger. If conversion occurs, all accrued but unpaid interest will be payable in cash on the date of conversion. In the absence of such conversion, the principal amount and all accrued but unpaid interest will be repayable in cash on the maturity date.

The notes and the units will be offered and sold by private placement: (i) in Canada to accredited investors and other exempt purchasers under National Instrument 45-106 (Prospectus Exemptions); and (ii) outside of Canada on a basis that does not require qualification or registration of the securities. All securities issued under the offerings will be subject to statutory hold periods under applicable securities legislation.

Net proceeds are expected to be used for exploration, development, corporate general and administrative expenses, and general working capital.

The company may pay finders' fees in connection with the offerings, within the limits permitted by the policies of the exchange. Closing of the offerings remains subject to customary conditions, including receipt of all necessary corporate and regulatory approvals, including approval of the exchange. The offerings are not subject to a minimum aggregate subscription amount.

Insiders, including related parties as defined under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions, may participate in the offerings. As described above, Tiago Cunha, interim CEO, president and a director of the company, together with his affiliates, is expected to subscribe for $2,085,000 ($1.5-million (U.S.)) principal amount of notes. Such insider participation will constitute a related-party transaction under MI 61-101. The company expects this participation to be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) as the fair market value of the securities subscribed for will not exceed 25 per cent of the company's market capitalization.

About South Star Battery Metals Corp.

South Star is a Canadian battery metal 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 metal 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 graphite concentrate is plus 80 mesh with good recoveries and 95 per cent to 99 per cent graphitic carbon. With excellent infrastructure and logistics, South Star phase 1 is ramping up commercial production with first sales shipped in May, 2025. Santa Cruz is the first new graphite production in the Americas since 1996.

South Star's second project in the development pipeline is strategically located in Alabama, United States, in the centre of a developing electric vehicle, aerospace and defence hub in the southeastern United States. The BamaStar project includes a historic mine active during the First and Second World Wars. The vertically integrated production facilities include a mine and industrial concentrator in Coosa county, Alabama, and a downstream value-add plant in Mobile, Ala., which will be upgrading natural flake graphite concentrates from both Santa Cruz and BamaStar mines. A National Instrument 43-101 preliminary economic assessment demonstrates strong economic results with a pretax net present value discounted at 8 per cent of $2.4-billion (U.S.) and an internal rate of return of 35 per cent, as well as an after-tax NPV discounted at 8 per cent of $1.6-billion (U.S.) with an internal rate of return of 27 per cent. South Star has also received a $3.2-million (U.S.) grant commitment from the U.S. Department of Defence Title III program to advance a feasibility study on the Bamastar project. South Star trades on the TSX Venture Exchange under the symbol STS and on the OTCQB under the symbol STSBF.

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

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

We seek Safe Harbor.