South Star receives environmental permits for Brazil graphite mine expansion

South Star Battery Metals (TSXV: STS; US-OTC: STSBF) has received environmental approval to expand its Santa Cruz graphite mine in Brazil, where initial production from a pilot plant under construction is expected to start this quarter.

The environmental permits, South Star says, were approved with conditions generally in line with that of its initial operation, which features a 5,000-tonne-per-year pilot plant slated to begin commercial production in the first quarter.

The expansion will allow South Star to produce up to 50,000 tonnes of natural graphite concentrates annually from eight mining claims.

Once complete, Santa Cruz will be the first new graphite mine in the Americas since 1996. The open-pit mine in Bahia state is expected to have a life of 12 years through three phases.

Following the approvals of its second and third phases of production, five of the principal claims on the project were also approved by the regional office of the National Mining Agency (ANM). They’ve also been forwarded to the Mines Ministry in Brasilia for final review of the company’s mining permit application.

South Star’s president Richard Pearce said the approvals represent “a big achievement for Santa Cruz” and is a key step forward in de-risking its future operations and scaling production at a critical time for battery metals.

“Once the full mining concessions incorporating Phases 2 and 3 are approved by the MME, we will be able to increase our Phase 1 production to name plate capacity of 13,000 tpa from 5,000 tpa and deliver more high-quality Brazilian flake graphite to our clients,” he added.

The second phase operations, planned for 2026, will represent a larger-scale concentration plant designed to produce up to 25,000 tonnes per year, while phase three, scheduled for 2028, would bring the capacity to the targeted 50,000 tonnes annually.

The immediate goal, according to Pearce, is to have all permits and licences in hand shortly for all stages of production and completing a Santa Cruz feasibility study in December.

South Star will make an investment decision on the project after the study is completed. The initial operation is fully funded, with phase two partially funded. The company has US$18 million available through a November 2022 agreement with Sprott Streaming for the initial expansion, once it reaches the feasibility study stage.