South Star Mining Announces Updated Mineral Resource At Its Santa Cruz Graphite Project
South Star Mining Announces Updated Mineral Resource At Its Santa Cruz Graphite Project
July 08th, 2019 – Vancouver, B.C. – South Star Mining Corp. (“South Star” or the “Company”) (TSXV: STS) (OTCQB: STSBF) is pleased to announce updated mineral resources incorporating the 2018 exploration program (Program) at its Santa Cruz Graphite Project (Project) in Bahia, Brazil. The updated mineral resource is now 3.95 million tonnes at 2.40% Cg of measured, 11 million tonnes at 2.25% Cg of indicated and 7.9 million tonnes at 2.32% Cg of inferred resources.
The goals of the Program were to upgrade the resource in the São Manoel target to support the planned 2020 pilot plant operations and perform some step out drilling in the São Manoel and São Rubens targets to better understand mineralization controls, define limits and expand the overall resource estimate. The Program included field investigations along with approximately 530 meters of diamond (8 holes – HQ) and 1285 meters (32 holes) of reverse circulation (RC) drilling.
Company CEO Richard Pearce stated “The results from the 2018 Exploration Program have successfully achieved our goals and objectives. The Updated Mineral Resource estimates are excellent, proving the strong geologic potential and continuity of high-quality graphite mineralization in friable, easily mined, weathered materials. We continue to find new areas with at surface mineralization, and the deposit is open both along strike and at depth. An important accomplishment of the Program was the development of an excellent preliminary outline of a higher grade mineralized zone that can be used during initial pilot plant production and the earlier stages of the life of the Project. Project operations should be amenable to low cost, open pit mining and the production of high-quality flake graphite concentrates.”
Mr Pearce added “Less than 5 percent of the land package has been explored, and there is great potential for exploration upside and resource expansion at Santa Cruz. We expect that the deposit will continue to grow, and excellent quality flake mineralization will enable us to be a long-term, low cost producer of large flake graphite, similar to the high-quality product continuously produced in this region of Brazil for over 70 years. We are pushing hard to meet our near-term goal of commissioning a pilot plant in the second semester of 2020 with a production capacity of 5000t of concentrate per annum. Near-term cash flow based on profitable, safe operations are a cornerstone of our investment thesis and project development philosophy.”
Highlights of Mineral Resource Update
- Combined Measured and Indicated Mineral Resource (M&I) are reported at 14.9M tonnes with an average grade of 2.3% Cg, with 25% of M&I total resource being upgraded to the measured category.
- Inferred Mineral Resource are reported at 7.9M tonnes with an average grade of 2.3% Cg, representing a doubling of tonnes and a 1.8x increase in contained Cg versus the previous mineral resource estimation.
|Mineral Resource Estimate||Tonnage||Cg||In-situ Graphite|
|Total M &I||14,903,100||2.29||341,240|
- Mineral Resources are as defined by the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves.
- Mineral Resources are estimated using ordinary kriging method and a three-dimensional block model using a cut-off grade of 0.75% and 1% Cg, depending on the modeled zones.
- Numbers have been rounded.
- Mineral Resources that are not Mineral Reserves do not have economic viability.
- Inferred Mineral Resource in this estimate are exclusive of the Measured and Indicated Resources.
- Inferred Mineral Resource have a lower level of confidence than that applied to an Indicated Mineral Resource. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.
A comparison of Project resource estimate (tonnes) between the 2017 PEA and the 2019 resource update is presented in following figure:
An important result of the Program was the identification of at-surface higher grade zones (4% – 5% Cg) in the São Manoel North B1 Target that can be used for pilot plant operations. In addition, several sections in the south of this Target have significant mineralized intervals with holes that stopped in higher grade material. The high-grade zones for pilot plant operations and the Southern Extension of this São Manoel North B1 Target will be targeted with in-fill drilling in 2020. A mine plan and sequence of the high-grade zones will be studied in upcoming Prefeasibility Report, which is scheduled for end of Q3 2019. A plan view and section from this zone follows:
The Updated Mineral Resource Report will have an effective date of June 30, 2019, which is the date of the mineral resource estimates contained in this Press Release. The Company plans to incorporate the results of the Updated Mineral Resource Report into a prefeasibility report scheduled for Q3 of 2019, along with the detailed engineering design package for the pilot plant scheduled for Q4 of 2019. Engineering, testing, environmental and licensing activities to support those plans are all on-going.
The technical information contained in this news release pertaining to the Santa Cruz Graphite Project has been reviewed and approved by Luiz Eduardo Pignatari, an independent qualified person under National Instrument 43-101–Standards of Disclosure for Mineral Projects (“NI43-101”). The qualified person has verified the information disclosed herein, including the sampling, preparation, security and analytical procedures underlying such information, and is not aware of any significant risks and uncertainties that could be expected to affect the reliability or confidence in the information discussed herein.
ABOUT SOUTH STAR MINING CORP.
South Star Mining Corp. is focused on the selective acquisition and development of near-term mine production projects in Brazil to maximize shareholder value. STS has an experienced executive team with a strong history of discovering, developing, building and operating profitable mines in Brazil.
The Santa Cruz Graphite Project is located in Southern Bahia in the third largest graphite producing region in the world with over 70 years of continuous mining. The Project has at surface mineralization in friable materials, and successful large-scale pilot plant testing (>30t) has been completed. The results of the testing show approximately 65% of Cg concentrate is +80 mesh with good recoveries and 95-99% Cg.
To learn more, please visit the Company website at www.southstarmining.com.
On behalf of the Board,
Mr. Richard Pearce
Chief Executive Officer
Ph: +1 (314)266-0793 (US)
Ph: +55 (11) 2308-6839 (Brazil)
For additional information, please contact:
Mr. Dave McMillan
Ph: +1 778-773-4560
Mr. Kris Kottmeier
VP Corp Communications
Ph: +1 604 506-2502
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
This news release and the Updated Technical Report contain references to inferred resources. The Report is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves.
This news release contains “forward-looking information” within the meaning of applicable securities laws. Generally, any statements that are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or indicates that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, “occur” or “be achieved”. Although the Company believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements.
Cautionary Note to United States Investors Concerning Estimates of Reserves and Resources
Reserve and resource estimates included in this news release have been prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards on Mineral Resources and Mineral Reserves. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for public disclosure by a Canadian company of scientific and technical information concerning mineral projects. Equivalent U.S. reporting requirements are currently governed by the United States Securities and Exchange Commission (“SEC”) Industry Guide 7 (“Industry Guide 7”) under the U.S. Securities Act of 1933, as amended. Canadian standards, including NI 43-101, differ significantly from the requirements of the SEC currently in effect under Industry Guide 7, and reserve and resource information contained in this news release may not be comparable to similar information disclosed by U.S. companies. In particular, the term “resource” does not equate to the term “reserves”. Under the SEC’s disclosure standards currently in effect under Industry Guide 7, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The SEC has not recognized the reporting of mineral deposits which do not meet the Industry Guide 7 definition of “reserve” prior to the adoption of the Modernization of Property Disclosures for Mining Registrants, which rules will be required to be complied with in the first fiscal year beginning on or after January 1, 2021. As a result, the SEC’s disclosure standards currently in effect normally do not permit the inclusion of information concerning “measured mineral resources”, “indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the SEC. You are cautioned not to assume that resources will ever be converted into reserves. You should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. You should also not assume that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. You are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC’s disclosure standards currently in effect under Industry Guide 7 normally only permit issuers to report mineralization that does not constitute “reserves” by such standards as in-place tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of “reserves” are also not the same as those of the SEC’s disclosure standards currently in effect under Industry Guide 7, and reserves reported in compliance with NI 43-101 may not qualify as “reserves” under such SEC standards. Accordingly, information concerning mineral deposits set forth in this news release may not be comparable with information made public by companies that report in accordance with U.S. standards.