STRR:CC - Star Royalties Announces Record Preliminary Q4 2022 Revenues and Provides Portfolio Update

(TheNewswire)

January 26, 2023 – TheNewswire - TORONTO, ON – Star Royalties Ltd. (“ Star Royalties ”,or the “ Company ”)(TSXV:STRR ) , ( OTC:STRFF)is pleased to announce record preliminary revenues 1 for the quarter ended December31, 2022, as well as to provide an operational update on its royaltyportfolio. All amounts are in U.S. dollars, unless otherwiseindicated.

Q4 2022 Corporate and PortfolioHighlights

• Record preliminary quarterly revenues of $305,000, a 30% increase over the previousquarter.

• Record preliminary quarterly revenue from the Keysbrookroyalty.

• Progressive improvements in operating performance androyalty payments from the Elk Gold Mine.

• Continued farmer enrollment into Green Star RoyaltiesLtd.’s (“ GreenStar ”) flagship regenerative agriculturecarbon farming program, now covering 22 U.S. states.

• Transition to commercialization at MOBISMART MobileOff-Grid Power Storage Inc. ( MOBISMART ”) to result in first royaltyrevenues for Green Star.

• Forest inventory and baseline assessment preparationscontinue at the Elizabeth Metis Settlement Forest Project.

• Green Star investment pipeline expanding rapidly andnow includes 22 opportunities under evaluation.

• Ongoing initiatives by new management at Sabre GoldMines Corp. ( SabreGold ”) (TSX: SGLD, OTCQB: SGLDF) to acceleratefunding of the fully-permitted Copperstone Gold Mine.

Alex Pernin, Chief Executive Officer of Star Royalties, commented:“2022 was our Company’s first full year being public. Our miningroyalty portfolio demonstrated positive momentum during the fourthquarter of 2022, as Keysbrook continued to exceed our expectations andsequential improvements in operating performance at Elk Goldculminated in record preliminary quarterly revenues. While Copperstoneremains delayed with respect to initial expectations, new managementat Sabre Gold is aggressively driving towards securing funding for themine restart by improving the balance sheet and the confidencesurrounding project economics.”

“Star Royalties’ majority-owned subsidiary, Green Star, has madesignificant progress in the fourth quarter with the addition of twocarbon experts and the meaningful expansion of our opportunitypipeline.”

“We are truly excited for 2023 and see strong potential to unlockvalue for our shareholders in the year ahead. Upcoming key catalystsinclude improving cash flow visibility across our existing mining andgreen royalty and streaming assets, raising capital for Green Starwith the prospect of an eventual IPO, and executing on oursignificantly expanded portfolio of carbon opportunities. Managementcontinues to be fully aligned with our shareholders, as exemplified byits purchases of Star Royalties shares in the public market and equityparticipation in the Green Star private placement, totallingapproximately C$1.5 million in 2022.”

Record Preliminary QuarterlyRevenues 1

For the three months ended December 31, 2022, StarRoyalties is expected to receive preliminary quarterly revenues of$305,000, representing a record to date and a 30% increase over theprevious quarter. The increase in royalty revenues is attributable torecord royalty contribution from the Keysbrook Mine and improvedoperating performance at the Elk Gold Mine over the previousquarter.

Significant Portfolio Updates

Keysbrook Mine

Star Royalties owns a 2% minerals royalty on theKeysbrook Mine, an open pit mineral sands (leucoxene, zircon) minelocated 70 km south of Perth, WA, Australia, and in operation sincelate 2015. Since Star Royalties acquired the royalty in late 2020, theKeysbrook Mine has consistently delivered operating results ahead ofthe Company’s internal expectations, including a record expectedroyalty payment for the fourth quarter of 2022. Preliminary full-year2022 royalty revenues from Keysbrook were 38% higher than internalexpectations, driven by a combination of strong operating performanceand higher-than-anticipated commodity prices.

Green Star Joint Venture (61.9% interest)

In November 2022, Green Star announced the appointmentsof Tanushree Bagh Mukherjee as Chief Development Officer and RinaCerrato as Chief Commercial Officer. These appointments represented asignificant strengthening of Green Star’s carbon market and projectdevelopment expertise and have since further expanded Green Star’srobust investment pipeline of premium, North American, nature-basedenvironmental solutions. Since their appointments, Mrs. Mukherjee andMrs. Cerrato have improved and accelerated the assessment of multipleopportunities in regenerative agriculture, improved forest management,livestock enteric methane reduction, biochar, and others, whileleveraging industry relationships from nearly 40 years of combinedexperience in the carbon sector. In addition, Green Star is in theprocess of becoming a member of the International Emissions TradingAssociation (“ IETA ”), a leading industry association onmarket-based climate solutions. IETA represents over 150 Canadian andinternational companies over multiple sectors on the design andimplementation of carbon pricing and climate finance mechanisms. Itsmarket and technical expertise is regularly called-upon to informpolicies and market trading frameworks that results in real andverifiable greenhouse gas emission reductions.

As Green Star continues to implement its mandate ofquality, scalability, longevity and integrity, it continues to growits investment pipeline and aims to become a quality leader in thecarbon credit royalty space. With enhanced internal project evaluationcapabilities, Green Star’s advanced-stage pipeline now consists of22 opportunities, including 19 new projects and three projectexpansions. In aggregate, the capital required for all theseopportunities would exceed C$150 million. As such, Green Star isactively evaluating capital raising opportunities through acombination of private and public markets to execute on its growingpipeline.

Regenerative Agriculture Carbon Farming Program

Green Star’s flagship regenerative agricultureCarbonNOW® farming program is a partnership with Locus AgriculturalSolutions® (“ LocusAG ”) and Anew Climate LLC. During the fourthquarter of 2022, the program continued to enroll new farmers, as wellas optimize the effectiveness of its award-winning microbial probioticsolutions. The program aims to create premium, verified carbon creditsthat will reward the adoption of regenerative agriculture practices byNorth American farmers. By the end of 2022, more than 70 growersacross 22 U.S. states were signed up for the carbon farming program,whose scope of 1.32 million acres of U.S. farmland represents just~0.5% of total U.S. row crops, and has significant potential forfurther expansion. Farmer enrollment to date continues to trackin-line with internal expectations and Green Star looks forward tosharing additional project updates in the coming months following theofficial closing of the Spring 2023 enrollment.

In the fall of 2022, Locus AG, Green Star’s soilprobiotic partner in the CarbonNOW program, expanded its line ofRhizolizer® and Pantego® biologicals by launching 11 newcrop-specific formulations that feature novel microbial strains. Theseproducts enable the correct pairing of microbial strains with thecorrect plant species, allowing easy-to-use, cost-effectivebiologicals to meet each crop’s specific agronomic needs, andenabling broader crop categories to qualify for the carbon farmingprogram. In turn, this results in enhanced nutrient uptake andutilization as well as higher amounts of organic carbon being storedin soil, ultimately leading to crop yield increases. These factors areexpected to increase financial margins to the growers, as the increasein crop yield is expected to be complemented by revenues from the saleof carbon offsets, which stem from the sequestered carbon in the soil.Additional information on the new line of microbial solutions can befound at https://locusag.com/news-releases/agricultural-biologicals-boost-yields .

As farmer enrollment continues to ramp up towards the1.32-million-acre scope of the program, Green Star continues to expectto generate cash flow equivalent to well over 400,000 attributablecarbon credits per year at full capacity.

MOBISMART

In early 2022, Green Star acquired a 2.5% gross revenueroyalty on MOBISMART, a private operating company that specializes inmobile solar power generation systems with integrated battery storage.Its product offering includes mobile solar power trailers andcontainers with leading-edge power electronics and remote monitoring.As a result, MOBISMART’s products address a wide range of powergeneration requirements while displacing diesel usage.

Green Star is pleased to report that MOBISMART hassince transitioned from research and development to commercialization,with numerous pilot projects underway and two major exclusivityagreements signed. Key sales and marketing initiatives are focused onthe North American telecommunications sector (converting off-gridcellular towers from diesel power generation to solar/wind), thedefense sector (replacing mobile diesel power generation to integratedsolar systems), the construction industry (converting mobile officetrailers from diesel power generation tosolar/wind) as well as the conversion of refrigeration trucks fromdiesel power generation to solar.

As MOBISMART’s sales and marketing efforts turn tocommercialization, Green Star expects MOBISMART to become its firstrevenue-generating royalty in the first quarter of 2023. As per theoriginal royalty agreement, the royalty has a term of 15 years andGreen Star had granted MOBISMART an initial payment holiday on theroyalty until January 2023. In the renewable energy andinstrumentation segment, MOBISMART has already sold several units,with delivery anticipated in the first quarter of 2023 and further newunit orders anticipated from this segment throughout the comingyear.

Elizabeth Metis Settlement Forest

In January 2022, Green Star expanded its original grossrevenue royalty on the sale of carbon credits from forested landslocated in Elizabeth Metis Settlement (the “ EMS Forest Project ”) from 13.5% to 40.5%. Green Star is pleased to reportthat progress at the EMS Forest Project continues with Anew preparingto undertake the forest carbon inventory in the fall of 2023, acritical step towards the issuance of compliance-grade offsets for usein the Alberta Offset System. The EMS Forest Project represents one offive improved forestry management projects being developed by AnewClimate across 320,000 acres of Metis Settlement lands in Alberta. Avideo update on these projects and their positive impact on localcommunities can be viewed at https://vimeo.com/765870094 .

Elk Gold Mine

Gold Mountain Mining Corp. (“ Gold Mountain ”)( TSX: GMTN, OTCQB: GMTNF, FRA: 5XFA) reported revenue of C$2.1 million for thequarter ended October 31, 2022, representing a meaningful improvementover their previous quarter. During the quarter, Gold Mountain resumedore mining operations and deliveries to New Gold Inc. (TSX, NYSEAmerican: NGD). A new open pit design from its recently completed3,700m in-fill drill program is expected to better define the gradecontrol model. Ore mining initiatives including drilling and blastingoptimization and improved ore fragmentation are also expected toresult in improved efficiency and grade profile. Furthermore,a n additional ore control geologist washired in late 2022 to increase focus on reducingdilution and improving grade reconciliation of mined material. Gold Mountain is also investigating orepreconcentration technologies to further improve project economics.

Gold Mountain is expected to provide an updatedresource estimate and accompanying preliminary economic assessment(“ PEA ”) in the coming months. The PEA is expected to confirm theproposed underground expansion to over 65,000 ounces per year andreinforce the long-term value proposition of the project. Permittingdiscussions with the province and surrounding Indigenous Communitiesand First Nations have also commenced.

Gold Mountain intends to restart its Phase IVexploration drilling program in 2023 after a pause in 2022 to focus onin-fill drilling and ore control optimization. Phase IV explorationhad focused mainly on resource expansion, targeting the Gold Creek, Lake, South andElusive Zones. Elk Gold Mine’s ongoingexploration success and longer-term resource potential remain theprincipal components of value and investment rationale for StarRoyalties when it acquired the royalty in September 2021.

Gold Mountain’s sequential improvements in operatingperformance and mined grades have resulted in an expected royaltypayment to Star Royalties of approximately C$54,000 for the fourthquarter of 2022. While the Elk Gold Minecontinues to operate below Gold Mountain’s estimated productionlevels, the latest royalty payment highlighted sequential monthlyimprovements in both gold and silver mined grades.

Copperstone Gold Mine

In the fourth quarter of 2022, Sabre Gold undertooknumerous restructuring initiatives to advance its fully-permittedCopperstone Gold Mine toward production. These initiatives includedthe sale of various non-core assets and the appointment of AndrewElinesky, CPA as Sabre Gold’s new Chief Executive Officer. Mr.Elinesky brings an extensive financial pedigree and has takensignificant steps to improve Sabre Gold’s balance sheet and reduceCopperstone’s encumbrances.

Specifically, Sabre Gold announced the sale of its 1%NSR royalty on the Kerr-Addison Mine claims owned by Gold Candle Ltd.for a total consideration of $7.4 million, with proceeds allocated tothe elimination of an existing 4.5% NSR royalty on Copperstone,retirement of a portion of its long-term debt and extension of itsremaining outstanding debt maturity to end of 2024. Sabre Gold alsoannounced the sale of non-core assets for proceeds of C$800,000 andannounced a share consolidation and proposed equity financing of up toC$1.5 million. Sabre Gold continues to explore additionalopportunities to further optimize its asset portfolio and acceleratethe funding of the Copperstone Gold Mine. As such, Sabre Goldmanagement believes that their strengthened financial position shouldfacilitate discussions with potential financial partners to bring thefully-permitted Copperstone Gold Mine in Arizona to production.

Note 1: Preliminary figures are unaudited and maychange materially. Revenues include royalty income from Keysbrook andElk Gold. Keysbrook revenue figures are net of Australian withholdingtaxes. Please also refer to the cautionary note regardingforward-looking information.

CONTACT INFORMATION

For more information, please visit our website at starroyalties.com or contact:

Alex Pernin, P.Geo. DmitryKushnir, CFA
Chief Executive Officer and Director Vice President, InvestorRelations
apernin@starroyalties.com        dkushnir@starroyalties.com
+1 647 494 5001 +1 647 494 5088

About Star Royalties Ltd.

Star Royalties Ltd. is a precious metals and carboncredit royalty and streaming company. The Company innovated theworld’s first carbon credit royalties in forestry and regenerativeagriculture through its majority-owned, pure-green joint venture,Green Star Royalties Ltd., and offers investors exposure to preciousmetals and carbon credit prices with an increasingly negative carbonfootprint. The Company’s objective is to provide wealth creation byoriginating accretive transactions with superior alignment to bothcounterparties and shareholders.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this news release may constitute"forward-looking statements", including those regardingfuture market conditions for metals, minerals and carbon offsetcredits. Forward-looking statements are statements that address ordiscuss activities, events or developments that the Company expects oranticipates may occur in the future. When used in this news release,words such as "estimates", "expects","plans", "anticipates", "will","believes", "intends" "should","could", "may" and other similar terminology areintended to identify such forward-looking statements. Forward-lookingstatements are made based upon certain assumptions and other importantfactors that, if untrue, could cause the actual results, performancesor achievements of Star Royalties and Green Star to be materiallydifferent from future results, performances or achievements expressedor implied by such statements. Forward-looking statements should notbe read as a guarantee of future performance or results and will notnecessarily be an accurate indication of whether or not such resultswill be achieved.

A number of factors could cause actual results,performances or achievements to differ materially from suchforward-looking statements, including, without limitation, changes inbusiness plans and strategies, market and capital finance conditions,ongoing market disruptions caused by the Ukraine and Russian conflict,metal and mineral commodity price volatility, discrepancies betweenactual and estimated production and test results, mineral reserves andresources and metallurgical recoveries, mining operation anddevelopment risks relating to the parties which produce the metals andminerals Star Royalties will purchase or from which it will receiveroyalty payments, carbon pricing and carbon tax legislation andregulations, risks inherent to the development of the ESG-relatedinvestments and the creation, marketability and sale of carbon offsetcredits by the parties, the potential value of mandatory and voluntarycarbon markets and carbon offset credits, including carbon offsets,risks inherent to royalty companies, title and permitting matters,operation and development risks relating to the parties which develop,market and sell the carbon offset credits from which Green Star willreceive royalty payments, changes in crop yields and resultingfinancial margins regulatory restrictions, activities by governmentalauthorities (including changes in taxation), currency fluctuations,the global, federal and provincial social and economic climate inparticular with respect to addressing and reducing global warming,natural disasters and global pandemics, dilution, risk inherent to any capital financing transactions, risksinherent to a possible Green Star go-public transaction, the nature ofthe governance rights between Star Royalties and Agnico Eagle in theoperation and management of Green Star and competition.

These risks, as well as others, could cause actualresults and events to vary significantly. Accordingly, readers shouldexercise caution in relying upon forward-looking statements and theCompany undertakes no obligation to publicly revise them to reflectsubsequent events or circumstances, except as required by law.

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