South Star Battery Metals Corp. (TSXV: STS) (OTCQB: STSBF) increased the size of its non-brokered private placement from CAD $4 million to CAD $4.8 million and completed the first tranche of the offering.

The company issued 15,413,333 common shares at CAD $0.15 per share for gross proceeds of CAD $2.312 million in the first closing. The expanded offering will consist of up to 32 million shares at the same price.

All shares in the first tranche were purchased by a fund controlled by Tiago Cunha, the company's interim CEO, president and director. This transaction gives Cunha direction and control of 38.23% of South Star's outstanding shares.

The company plans to close the second and final tranche on or before May 29, 2026, subject to TSX Venture Exchange approval. The shares are subject to a four-month hold period from issuance.

South Star will use net proceeds to support operations scaling, including capital expenditures for expanding its Santa Cruz graphite operation toward 10,000 tonnes annual production capacity, plus general corporate expenses and working capital.

"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," Cunha stated.

The insider participation constitutes a related party transaction under securities regulations. South Star is relying on exemptions from formal valuation and minority shareholder approval requirements as the transaction value does not exceed 25% of the company's market capitalization.