South Star Battery Metals Corp. (TSX-V:STS, OTCQB:STSBF) told investors it is set its Santa Cruz open-pit flake graphite mining project in Brazil into production in 2023 — the first new graphite production in the Americas since 1996.
In a letter to shareholders, South Star CEO Richard Pearce said that in 2022, the company finalized the Phase 1 financing, and is fully funded for Phase 1 construction.
“Our team is focused on construction that will result in our Santa Cruz Mine achieving commercial production by year end 2023,” said Pearce.
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He added that the company mobilized contractors for civil and earthworks in December last year and made down payments on the major equipment.
Santa Cruz has a 12-month construction and commissioning schedule, according to the company.
Management’s experience has helped South Star to secure a US$28 million streaming deal from Sprott Private Resource Streaming and Royalty Corp. South Star has earmarked $10 million of Sprott’s funding for Phase 1 construction.
“Santa Cruz Phase 1 (5,000 tons per year concentrates) is fully financed, in construction with commercial production scheduled for December 2023,” said Pearce. “Santa Cruz is one of only three projects in the world that I know of that are bringing new capacity to the markets in 2023.”
South Star had its geophysics team in the field in November 2022, and said it “will have drills turning midyear 2023” covering 3,000 to 4,000 meters (m) to expand current resources and reserves to extend the mine life.
“We also generated and shipped 100-gram samples of various product samples to potential clients. Those samples are in evaluation,” said Pearce.
Mining license for Phases 2
Phase 2 operations will represent a larger-scale concentration plant to produce between 25,000 to 30,000 tons per year of concentrate. The sizing of the Phase 2 plant could be increased depending on the successes of the Phase 1 operations, according to South Star, as well as ongoing development of commercial relationships.
“We plan to submit the Phases 2 and 3 environmental reports and documentation in March 2023. Our goals are to have both the mining and environmental permits and licenses required for Phases 2 and 3 approved in 2023 before finalizing the commissioning of Phase 1 operations,” said Pearce.
BamaStar Graphite project
Pearce noted that 2022 was an “excellent start” to developing the BamaStar project in the US, “meeting our commitments to our joint venture partners” and progressing towards a feasibility study on our strategic plan.
“We completed the pilot scale metallurgy program, processed 3 tons of ore, and confirmed the bench scale tests and flowsheet,” added Pearce.
The maiden resource estimate is underway, and the company said that it expects that to be published in the first quarter of this year.
In 2023, the firm plans to increase resource and reserve estimates and complete the testing program to support a 43-101 PEA of the strategic plan in 1Q 2024.
Vertically integrated production
“South Star's 5-to-7 year strategic plan forecasts Santa Cruz and BamaStar each producing 50,000 tpa of high-quality graphite concentrates,” said Pearce.
According to the company, part of this production will be directed to a value-add plant in the southeast corridor of the US producing value-add products such as micronized, purified graphite, and expanded graphite.
Investors can find more details regarding the company’s catalysts for 2023, and robust balance sheet here.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive