South Star receives environmental permits for Brazil graphite mine expansion

South Star Battery Metals (TSXV: STS) has received environmental approval for Phases 2 and 3 for its Santa Cruz graphite mine in Brazil, allowing the company to produce up to 50,000 tonnes of natural graphite concentrates annually from eight mining claims.

Following the approvals, five of the principal claims on the project were also approved by the regional office of the National Mining Agency and forwarded to the Ministry of Mines and Energy (MME) in Brasilia for final review of the applications for the mining permit.

The environmental permits, South Star says, were approved with conditions generally in line with that of Phase 1, which features a 5,000-tonne-per-year (tpa) pilot plant that is already under construction and is expected to begin commercial production in the first quarter of 2024.

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.

South Star’s president Richard Pearce said the approvals represent “a big achievement for Santa Cruz” and are 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,” Pearce said.

The Phase 2 operations, planned for 2026, will represent a larger-scale concentration plant designed to produce up to 25,000 tpa, while Phase 3, scheduled for 2028, would bring the capacity to the targeted 50,000 tpa.

The immediate goal, Pearce said, is to have all permits and licences in hand shortly for 50,000 tpa of production and advancing the Santa Cruz feasibility study that the company aims to complete in December 2024.

Shortly after delivery of the feasibility study, South Star is expected to make an investment decision on the project. To date, the Phase 1 operation has been fully funded, while Phase 2 is partially funded. As of now, the company has $18 million available through a November 2022 agreement with Sprott Streaming for the Phase 2 expansion once it reaches the FS stage.