Mr. Tiago Cunha report

SOUTH STAR ANNOUNCES UPSIZE AND CLOSING OF FIRST TRANCHE OF NON-BROKERED PRIVATE PLACEMENT OF SHARES

South Star Battery Metals Corp. has increased the size of its previously announced non-brokered private placement of common shares from $4-million to up to $4.8-million. The upsized share offering will consist of up to 32 million common shares at a price of 15 cents per share. The increase in the size of the share offering was driven primarily by strong investor demand, with the order book remaining oversubscribed even after the increase from the originally announced size. All other terms of the share offering remain unchanged from those set out in the company's news release dated May 6, 2026.

The company is also pleased to announce that it is moving to close the first tranche of the share offering, issuing 15,413,333 shares at a price of 15 cents per share for gross proceeds of $2,312,000. The first closing remains subject to conditional approval by the TSX Venture Exchange. The company anticipates closing the second and final tranche of the share offering on or before May 29, 2026. The final closing remains subject to final approval by the TSX-V.

The shares are subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities laws. Net proceeds from the share offering will be used to support the continued scaling and advancement of the company's operations, including the execution of capital expenditures associated with the planned expansion of the Santa Cruz graphite operation toward a production capacity of 10,000 tonnes per annum, as well as for corporate general and administrative expenses and general working capital purposes. The first tranche of the share offering remains subject to final approval of the exchange.

The company anticipates closing one or more additional tranches of the share offering in the coming weeks, the closing of which remains subject to customary conditions, including the receipt of all necessary corporate and regulatory approvals, including approval of the exchange.

All of the shares issued in the first tranche of the share offering were purchased by a fund directed and controlled by Tiago Cunha, interim chief executive officer, president and a director of the company, resulting in Mr. Cunha having direction and control of 38.23 per cent of the company's issued and outstanding shares. Such insider participation constitutes a related-party transaction under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). The company is relying on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) thereof as the fair market value of the securities subscribed for does not exceed 25 per cent of the company's market capitalization.

Mr. Cunha, interim CEO, stated, "In connection with the upsizing of the share offering and the strong participation from existing shareholders seeking to maintain their proportional ownership interests, my fund agreed to reduce its participation in the financing in order to accommodate strategic shareholder demand."

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 is anticipated to be put into production. Brazil is the third-largest graphite-producing region in the world with more than 80 years of continuous graphite mining. With excellent infrastructure and logistics, Santa Cruz is slated to be the newest graphite producer in the Americas. 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.

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