(TheNewswire)
All amounts are in U.S. dollars unless otherwiseindicated.
APRIL 11, 2022 – TheNewswire - TORONTO, ON - Star Royalties Ltd.( the “ Company ” or “ StarRoyalties ” ) (TSXV:STRR ) ( OTC:STRFF), through its pure-green subsidiary, Green StarRoyalties Ltd. (“ Green StarRoyalties ”), is pleased to announce a fourfoldexpansion of its agreement with Blue Source, LLC (“ Bluesource ”),announced on December 13, 2021, to create premium, verified carbonoffset credits that will reward the adoption of regenerativeagriculture practices by North American farmers.
This amended agreement materially expands theCarbonNOW ® carbon farming program that will further enable theBluesource and Locus Agricultural Solutions ® (“ Locus AG ”) partnership to incentivize regenerative agriculturepractices on 1.32 million acres of farmland.
Green Star Royalties and Bluesource expect the expandedprogram to start generating credits for the 2023 growing season, withLocus AG beginning farmer enrollment within the coming months. Theenlarged program is expected to generate over 2 million premium carbonoffset credits per annum on average, which will be available for salein the voluntary carbon marketplace. This program has been financed byGreen Star Royalties, with Bluesource executing carbon offsetdevelopment and sales.
Regenerative Agriculture ProgramHighlights
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Sustainable farming: This initiative aims to finance and accelerate the transitionof North American farmers to sustainable farming practices that willimprove soil health and accelerate atmospheric CO removal and sequestration into soils.
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Innovative, aligned benefitstructure: Pioneered by Green Star Royalties andBluesource, this novel approach, in partnership with grower-facingorganizations such as Locus AG, enables farmers to participate in thecarbon credit market, maximizing benefits and alignment to all programparticipants.
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Premium credits in a low-riskjurisdiction: Providing carbon finance togrowers across the United States to create premium regenerativeagriculture carbon offset credits for the voluntary carbonmarkets.
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Material increase in scope: Project expansion from 320,000 to 1.32 millionacres reflects strong grower enrollment.
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Originating carbon offset credits: Green Star Royalties anticipates generatingannual cash flow equivalent to approximately 400,000 carbon offsetcredits from the expanded project (100,000 previously).
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Preferred partnership drives growth: Green Star Royalties and Bluesource look tofinance progressively larger regenerative agriculture projects withfurther potential of over one billion acres of additional prospectivefarmland in the United States and in Canada.
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Highly reputable partner: Bluesource is North America's leading carbonoffset developer and marketer, with a proven track record spanningover 21 years in developing and monetizing nature-based carbon offsetprojects.
Alex Pernin, Chief Executive Officer of Star Royalties,commented: “We are thrilled to deepen our partnership withBluesource and Locus AG in tackling climate change throughregenerative agriculture practices. Just over four months have passedsince we established this partnership and we arenow more than quadrupling this investment in response to strong demandfrom U.S. farmers to participate in the CarbonNOW carbon farmingprogram. Our teams are jointly passionate about financing a greenerfuture. We are demonstrating the application of our royalty investmentmodel as an innovative solution to financing the transition of U.S.farmers to regenerative agriculture, and in turn, to originatingpremium carbon offset credits. The expansion of the project reflectsour first-mover advantage in a novel and highly scalable businessmodel, and we look forward to funding significantly larger projectsacross the North American farming industry.”
Jamie MacKinnon, Executive Vice President ofBluesource, stated: “The early success of this program is due inlarge part to well-designed incentives for growers and an alignmentamongst the program partners on maximizing the value retained by thegrower as a means of attracting more acres into the program andcreating scale. It is also due to the considerable resource thatBluesource and Locus AG are deploying to onboard and supportgrowers.”
Chad Pawlak, Chief Executive Officer of Locus AG, said:“CarbonNOW provides unique economic, agronomic and environmentaladvantages that make it a highly attractive program for all parties.The financial incentives and high eligibility eliminate many farmerhesitations, while our carbon-accelerating soil health probioticsamplify farm and program performance. In the uncertainties of anever-changing economy, we’ve built a carbon farming program thathelps ensure a successful future for the agriculture industry and alasting legacy for farmers.”
Transaction Terms
Green Star Royalties has agreed to finance aregenerative agriculture carbon offset program being developed andmanaged by Bluesource for an increased capital contribution of up to$20.6 million in cash. Cash will be made available to growers in thisprogram through Locus AG’s CarbonNOW program. Locus AG will beactively recruiting growers under this project until a total of 1.32million acres of farmland across the United Sates have been adoptedinto the program.
Green Star Royalties expects initial funding of theinvestment to commence in Q2 2022, with further quarterly tranchesdrawn by Bluesource, as required, until the entire $20.6 million isinvested. Green Star Royalties currently expects $5 million will beinvested in 2022 and the remainder in 2023.
This project investment has a term of 11.5 years andthe future financial benefits derived from the monetization of theproject’s carbon offset credits will be split between the CarbonNOWgrowers, Bluesource, and Green Star Royalties. The program expects togenerate revenues from an average of over 2 million carbon offsetcredits per annum, starting in 2023. Green Star Royalties expects togenerate cash flow equivalent to over 200,000 attributable carbonoffset credits in 2024, and increasing to over 400,000 attributablecarbon offset credits per annum starting in 2025.
Regenerative Agriculture
Regenerative agriculture is a wholesome conservationand rehabilitation approach to food and farming systems. The purposeof regenerative agriculture is to promote soil health regeneration andto rebuild soil organic matter while improving water management,reducing or eliminating nitrogen-based fertilizers, and increasingbiodiversity. This can be done by implementing traditional practicessuch as no or low tillage and cover cropping,and accelerated through the use of Locus AG’s soil healthprobiotics. In addition to benefiting farmers and enhancing long-termsoil health and crop performance, regenerative agriculture practicesreverse climate change by sequestering significant additional amountsof atmospheric CO 2 intosoils than would have been released to the atmosphere by utilizingconventional farming practices. By accurately quantifying the amountof sequestered carbon into these farmlands, Bluesource is able todevelop premium and verified carbon offset credits that are then soldto a variety of companies looking to voluntarily offset theirCO 2 emissions.
CarbonNOW Program
Locus AG’s CarbonNOW carbon farming program is builtthrough a partnership with Bluesource and Green Star Royalties. Theprogram has received rapid interest from U.S. farmers based on keydifferentiators from other carbon farming programs, including:
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Upfront payments and guaranteed minimums
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Performance bonuses that accrue for larger long-termpayouts
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Premium carbon credits and secure buyers
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No program fees and full program management
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High eligibility rates and access tocarbon-accelerating technology
As high fuel and input prices continue to rise, thechance to maximize farm earnings is a selling point for farmers tojoin CarbonNOW. There are no costs involved in the carbon farmingprogram other than the purchase of Locus AG’s soil probiotics. Useof these products results in higher return on investment per acrethrough better nutrient use efficiency and uptake, along withincreases in crop yields, and improved carbon sequestration.
About Bluesource
As announced in 2022, Bluesource has merged withElement Markets to create the largest marketer and originator ofcarbon and environmental credits in North America and one of thelargest in the world. The combination brings together ElementMarkets’ leading position in low carbon fuels and greenhouse gasmarkets with Bluesource’s expertise in nature-based solutions,project development, capital formation and advisory services to createa vertically integrated, climate-focused company that serves allsectors and geographies to accelerate the fight against climate changeand environmental degradation. As it relates to regenerativeagriculture, Bluesource partners with organizations in the ag supplychain to design, develop, and manage a carbon program to leverage thecarbon opportunity for their network of growers. More informationabout the company is available at www.bluesource.com.
About Locus AgriculturalSolutions ®
Locus Agricultural Solutions ® (Locus AG) isan agtech, certified B Corp™ and innovator member of the WorldBusiness Council for Sustainable Development that is helping to solvethe interrelated challenges of climate change and food security. Itsinnovative microbial soil health probiotic technologies and globallyrecognized CarbonNOW ® carbon farming program give farmers a newway to boost yields, profit and accelerate carbon sequestration whilereducing operating costs and environmental impact. Locus AG gets itscore scientific capabilities from its parent company, LocusFermentation Solutions (Locus FS), an Ohio-based green technologycompany. For more information, visit LocusAG.com.
Locus AG: Award-Winning MicrobialSoil Probiotics
Source: locusag.com
Carbon Offset Credits
The Paris Agreement was adopted by 196 nations andentered into force in 2016 with the purpose of reducing globalgreenhouse gas (“GHG”) emissions. Specifically, the ParisAgreement reaffirms the goal to limit global temperature increase tobelow 2°C above pre-industrial levels, with a secondary aggressivetarget of limiting that increase to 1.5°C. In order to achieve theselevels, many governments have meaningfully increased their commitmentin recent years to reducing GHG emissions, with over 100 countries andthousands of corporations having since committed to significantlyreducing GHG emissions by 2030 and being carbon-neutral by2050.
Carbon offsets are generated from any activity thateither prevents or reduces carbon emissions (such as renewableenergies or methane capture technology) or improves carbonsequestration (such as regenerative agriculture or reforestation andconservation of forested lands). Carbon offset credits are effectivelya measurable net benefit from an activity versus the status quo. Theirunits are measured in tonnes of carbon dioxide equivalent,(“ CO 2 e ”), meaning one carbon offset credit isequal to one tonne of CO 2 eemission reduction, avoidance or removal.
CONTACT INFORMATION
For more information, please visit our website at starroyalties.com or contact:
Star Royalties Ltd. BlueSource LLC
Alex Pernin, P.Geo. Jeanethe Falvey
Chief Executive Officer and Director Sr.Director, Communications & Marketing
apernin@starroyalties.com jfalvey@bluesource.com
+1 647 801 3549 +1 857 507 7688
Locus Agricultural Solutions
Teresa DeJohn
Director of Marketing & PR
tdejohn@locusfs.com
+1 440 561 0800 x117
ABOUT STAR ROYALTIES LTD.
Star Royalties Ltd. is a precious metals and carboncredit royalty and streaming company. The Company created theworld’s first carbon negative gold royalty platform through itspure-green subsidiary, Green Star Royalties, and offers investorsexposure to precious metals and carbon credit prices with anincreasingly negative carbon footprint. The Company’s objective isto provide wealth creation by originating accretive transactions withsuperior alignment to both counterparties and shareholders.
CAUTIONARY NOTE REGARDING FORWARD-LOOKINGINFORMATION
Certain statements in this news release may constitute"forward-looking statements", including those regarding thestrategies and business plans of the Company. Forward-lookingstatements are statements that address or discuss activities, eventsor developments that the Company expects or anticipates may occur inthe future. When used in this news release, words such as"estimates", "expects", "plans","anticipates", "will", "believes","intends" "should", "could","may" and other similar terminologyare intended to identify such forward-looking statements.Forward-looking statements are made based upon certain assumptions andother important factors that, if untrue, could cause the actualresults, performances or achievements of Star Royalties to bematerially different from future results, performances or achievementsexpressed or implied by such statements. Forward-looking statementsshould not be read as a guarantee of future performance or results andwill not necessarily be an accurate indication of whether or not suchresults will be achieved. A number of factors could cause actualresults, performances or achievements to differ materially from suchforward-looking statements, including, without limitation, the abilityof the parties to successfully implement the project, the ability toattract farmers into the project, the ability to achieve carboncredits from the project, changes in business plans and strategies,market conditions, share price, best use of available cash, theability of the Company to identify and execute future acquisitions onacceptable terms or at all, risks inherent to royalty and streamingcompanies, title and permitting matters, metal and mineral commodityprice volatility, discrepancies between actual and estimatedproduction of carbon credits, and development risks relating to theparties which produce the carbon credits from the project, regulatoryrestrictions, activities by governmental authorities (includingchanges in taxation), currency fluctuations, the global social andeconomic climate, natural disasters and global pandemics, includingCOVID-19, dilution, and competition. These risks, as well as others,could cause actual results and events to vary significantly.Accordingly, readers should exercise caution in relying uponforward-looking statements and the Company undertakes no obligation topublicly revise them to reflect subsequent events or circumstances,except as required by law.
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