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 closed the first tranche of the offering, according to a company statement.

The upsized offering consists of up to 32 million common shares priced at CAD $0.15 per share. The company completed the first tranche by issuing 15.4 million shares for gross proceeds of CAD $2.3 million. The first closing remains subject to conditional approval by the TSX Venture Exchange.

All shares in the first tranche were purchased by a fund controlled by Tiago Cunha, the company's interim CEO and director. Following this transaction, Cunha controls 38.23% of South Star's outstanding shares. The transaction qualifies as a related party transaction under securities regulations.

South Star anticipates closing the second and final tranche by May 29, 2026, subject to final exchange approval. The shares are subject to a four-month statutory hold period from the date of issuance.

The company plans to use net proceeds to support scaling operations, including capital expenditures for expanding its Santa Cruz graphite operation in Brazil toward a production capacity of 10,000 tonnes per annum. Funds will also cover 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.

South Star develops battery metals projects in the Americas, with its Santa Cruz graphite project in southern Bahia, Brazil, being its primary focus.