STRR - Star Royalties Reports Q3 2023 Financial Results

(TheNewswire)

November 22, 2023 – TheNewswire - TORONTO, ON – Star Royalties Ltd. (“ Star Royalties ”,or the “ Company ”)(TSXV:STRR ) ( OTC:STRFF) ispleased to report its financial results for the quarter endedSeptember 30, 2023. All amounts are in U.S. dollars, unless otherwiseindicated.

Q3 2023 Financial and CorporateHighlights

• Quarterly revenues of $271,567, representing a 44%increase over the prior quarter due to improved mineral sands sales atKeysbrook.

• Quarterly net loss of $277,408 included a $251,851foreign exchange-driven equity gain from the Green Star Royalties Ltd.joint venture ( GreenStar ”).

• Green Star’s flagship regenerative agriculture carbonfarming program was officially listed under Verra’s Methodology forImproved Agricultural Land Management, v2.0 (VM0042) (“ Verra ”) and iscurrently proceeding to third-party validation.

• The recently announced Copperstone gold streamrestructuring improved the Company’s balance sheet and enhanced theproject’s economics and funding options.

• MOBISMART Mobile Off-Grid Power Storage Inc.( MOBISMART ”) continues to expand sales volumes and their customerpipeline.

Alex Pernin, Chief Executive Officer of Star Royalties, commented:“During the third quarter of 2023, our team continued to workdiligently to position both Star Royalties and Green Star for upcomingsuccess. Keysbrook performed in-line with internal expectations, andwe restructured Copperstone’s stream to achieve a 400% increase inexposure to its life-of-mine production profile and significantexploration potential, while converting a portion of its value intoimmediate and near-term cash and securities. Green Star’s flagshipregenerative agriculture program continues to advance and has nowentered the third-party validation phase under the Verra registrationprocess. Lastly, but importantly, we continue to actively evaluatecapital raising opportunities to be well positioned to begintransacting on Green Star’s expanded pipeline of carboninvestments.”

Summary of Q3 2023 FinancialResults

For complete details, please refer to the CondensedInterim Consolidated Financial Statements and associated ManagementDiscussion and Analysis for the three months ended September 30, 2023,available on SEDAR+ at sedarplus.c aor on the Company’s website at starroyalties.com .

Significant Portfolio Updates

Keysbrook Mine

In the third quarter of 2023, royalty revenues fromKeysbrook were $245,194, roughly in-line withoperator’s budget, and higher compared to theprior quarter due to increased mineral sands sales in the period,reflecting the variability inherent in bulk-shipped products.

Elk Gold Mine

Gold Mountain MiningCorp. (“ GoldMountain ”) (TSX: GMTN, OTCQB: GMTNF, FRA:5XFA) continued ore mining operations and deliveries to New Gold Inc.(TSX, NYSE American: NGD) during the third quarter. The third quarterroyalty payment from the Elk Gold Mine declined to $26,373 compared to$52,801 in the previous quarter, primarily due to lower ore shipmentsby Gold Mountain. For its quarter ended July 31, 2023, Gold Mountainreported total gold sales of 965 ounces gold and generated totalrevenue of C$2.2 million from the Elk Gold Mine. Revenues from the ElkGold Mine were also affected by a lower average gold grade deliveredas a result of negative grade reconciliation during the period.

Gold Mountain reported in its fiscal quarter outlook inSeptember that it is overcoming its operational challenges and itanticipates transitioning into a steady state of production during theremainder of 2023. In particular, Gold Mountain reported that it islooking to improve the accuracy of grade forecasting, as well asleverage improved data collection/analysis, drilling and blastingdesigns, and sampling techniques to reduce the volatility of futureoperating results. In addition, Gold Mountain has stated that it islooking to initiate technical and economic studies required for thepermit expansion from 70,000 tonnes of ore mining per year to 324,000tonnes of ore mining per year in 2024.

Copperstone Gold Project

On September 14, 2023, Sabre Gold Mines Corp.(“ Sabre Gold ”) (TSX: SGLD, OTCQB: SGLDF) announced the sale of itsBrewery Creek Project and other certain mineral assets in the Yukon toVictoria Gold Inc. (“ Victoria Gold ”) (TSX: VGCX) for an aggregateconsideration of C$13.5 million.

Following the end of thequarter, on October 3, 2023, Star Royalties entered into a non-bindingagreement with Sabre Gold to restructure its existing gold streamingagreement on the Copperstone Gold Mine (“ Copperstone ”). TheCopperstone gold stream restructuring closed on October 31, 2023,where the stream was revised from 6.6% of gold produced withproduction-based step-downs to a flat 4% of gold produced for theduration of Copperstone’s life-of-mine. Under the terms of thestreaming agreement, Star Royalties will continue to provide a cashpayment to Sabre Gold equal to 25% of the spot gold price for eachounce of gold delivered. As part of the restructuring, additionalconsideration of C$4.55 million will be paid by Sabre Gold to StarRoyalties in a combination of cash and Victoria Gold shares receivedfrom Sabre Gold’s sale of its Brewery CreekProject.

On November 1, 2023, Star Royalties received the firsttranche of its additional consideration, consisting of C$1.55 millionin cash and 7,407,407 Sabre Gold shares at a price of C$0.135 percommon share of Sabre Gold, equating to C$1 million in Sabre Goldshares at the time. As a result, Star Royalties is currently a 9.4%shareholder of Sabre Gold. Additional information on the terms of therestructuring and its rationale can be found in the Company’s pressreleases dated October 3 and November 2, 2023. The Company believes that the new structure of theCopperstone gold stream is a positive development in that it improvesthe Company’s balance sheet, enhances project economics, andimproves the long-term optionality on Copperstone’s exploration andproduction potential.

Green Star Joint Venture (61.9% interest)

During the third quarter of 2023, Green Star continuedto advance its investment pipeline of premium North American,nature-based carbon offset projects. In addition, management wasfocused on progressing the evaluation of private-market capitalraising opportunities that would allow Green Star to make futureinvestments in regenerative agriculture, improved forest management,reforestation, livestock enteric methane reduction, grasslands,biochar, and other category types. Green Star will look to transact onseveral of these projects upon completion of an eventual capitalraise.

Voluntary Carbon Market Update

Green Star is committed to funding premium NorthAmerican, nature-based solutions in both the compliance and voluntarycarbon markets. Carbon credit pricing in Green Star’s focus marketsremains robust and at near-peak levels, which is in stark contrast topricing for lower-quality credits that have been subject to severalnegative news articles. Green Star expects the bifurcation of thevoluntary carbon market to continue, with higher quality projects inpremium jurisdictions garnering increasing premiums from domesticemitters, while projects that do not meet integrity and qualitybenchmarks likely to attract lower demand and pricing. Theoverwhelming theme in the voluntary carbon market for much of 2023 hasbeen about ensuring project quality and carbon credit integrity.During New York Climate Week, industry leaders called uponcorporations to act now and unlock the required supply ofhigh-integrity carbon credits. Given the current undersupply of thesecredits, their associated pricing premiums could outperform othercarbon assets, well positioning Green Star with its strategic focus onNorth America and nature-based solutions positions for success in aquality-driven voluntary carbon market.

Looking into 2024, further voluntary carbon marketdevelopments are anticipated from two main initiatives: The IntegrityCouncil for the Voluntary Carbon Market (“ ICVCM ”) and theVoluntary Carbon Markets Integrity Initiative (“ VCMI ”). During thethird quarter of 2023, both VCMI and ICVCM commenced working groups tofacilitate an industry-wide understanding of quality.

• VCMI launched the VCMI Stakeholder Forum to ensure thatits guidance is well designed, easy to understand, and effective. TheForum will provide feedback on the Claims Code of Practice, releasedin June 2023, to provide clear guidance when voluntary carbon creditscan be used as a part of an emissions reduction strategy and toprovide clarity on the claims that can be made regarding the use ofcarbon credits. Following early market reaction that the code is toorestrictive, VCMI has publicly indicated the next release, expected inlate November, will provide additional flexibility for better use caseoptions.

• ICVCM released the first part of the Core CarbonPrinciples ( CCP ”) and the Program-Level Assessment Framework andAssessment Procedure, followed by the Category Assessment Frameworklater in the year. The CCP label is intended to be assigned to carboncredits of high integrity, quality, and transparency, while theframeworks are designed to assess which categories of carbon credits(i.e., energy, forestry, waste management, etc.) are aligned with theCCP and, consequently, are of high integrity and could receive CCPlabels. Green Star anticipates CCP-labelled credits will trade at apremium and will allow companies using these carbon credits to makecredible claims about their net-zero commitment while eliminatingreputational risks. The first set of fast-tracked credit categories isexpected to be announced in early 2024.

Other notable developments:

• Carbon-crediting programs such as Verra can now applyfor CCP assessment. Once assessments are complete, programs deemed tobe CCP-eligible will be able to issue CCP-labelled credits fromCCP-Approved categories of carbon credits.

• California passed a bill related to voluntary carbonmarkets. Bill AB1305 (Voluntary Carbon Market Disclosures) willrequire buyers and sellers of voluntary carbon credits to disclosespecific information about carbon projects on their website, or facefines. This bill reflects the growing focus by regulators to ensuretransparency on transactions in carbon markets.

Regenerative Agriculture Carbon Farming Program

Green Star’s flagship regenerative agricultureCarbonNOW® farming program is a partnership with Anew Climate LLC(“ Anew ”) and Locus Agricultural Solutions® (“ Locus AG ”).

The CarbonNOW program was officially listed underVerra’s Methodology for Improved Agricultural Land Management, v2.0(“ VM0042 ”) on September 19, 2023, under the “Anew Agri-carbonAggregation 1” project (ID 4236). The project’s 30-day publicconsultation period was completed in October and the project is nowtransitioning to its validation phase with the engagement of athird-party validation and verification body. In parallel, Green Starcontinues to engage with Anew and Locus AG to ensure the project isoptimized for maximum carbon offset generation as well as to ensuremaximum alignment between all involved parties.

While VM0042 v2.0 has introduced additionalconservatism, including revisions to buffer pool requirements andstatistical uncertainty discounts, Green Star continues to expect togenerate cash flow equivalent to well over 400,000 attributable carboncredits per year at the program’s full scope of 1.32 millionacres.

MOBISMART

Green Star owns a 2.5% gross revenue royalty onMOBISMART, a private operating company that specializes in mobilesolar power and fuel cell generation systems with integrated batterystorage and diesel displacement capabilities. In early 2023, MOBISMARTtransitioned from research and development to commercialization, andbecame Green Star’s first cash flowing asset.

During the third quarter of 2023,MOBISMART significantly increased solar unit sales to North Americancustomers that are building out their wind LiDAR fleets. In addition,MOBISMART has continued to expand its fuel cell offerings using higherpowered cells to further penetrate the telecommunication marketsacross North America. MOBISMART expects that this higher powerspectrum will accelerate the adoption of its products in decarbonizingthe telecom sector, as evidenced by a current engagement with a majorUS telecom company to pilot its products as power backup systems forcell towers in California and Texas.

CONTACT INFORMATION

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

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. The Company’s objective is toprovide wealth creation by originating accretive transactions withsuperior alignment to both counterparties 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 or GreenStar expects or anticipates may occur in the future. When used in thisnews release, words such as "estimates","expects", "plans", "anticipates","will", "believes", "intends""should", "could", "may" and othersimilar terminology are intended to identify such forward-lookingstatements. Forward-looking statements are made based upon certainassumptions and other important factors that, if untrue, could causethe actual results, performances or achievements of Star Royalties andGreen Star to be materially different from future results,performances or achievements expressed or implied by such statements.Forward-looking statements should not be read as a guarantee of futureperformance or results and will not necessarily be an accurateindication of whether or not such results will 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 governmental authorities (including changes intaxation), currency fluctuations, the global, federal and provincialsocial and economic climate in particular with respect to addressingand reducing global warming, natural disasters and global pandemics,dilution, risks 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 MinesLimited in the operation and management of Green Star andcompetition.

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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