(TheNewswire)
APRIL 13, 2022 – TheNewswire - TORONTO, ON – Star Royalties Ltd. (the “ Company ” or “ StarRoyalties ”) (TSXV:STRR ) , ( OTC:STRFF) is pleased to report its financial results for theyear ended December 31, 2021.
All amounts are in U.S. dollars unless otherwiseindicated.
Summary of Annual Results
December 31, 2021 | December 31, 2020 | ||
Revenue | $ 691,621 | $ 9,801 | |
Net loss Basic and diluted loss per share | (2,669,282) (0.04) | (799,893) (0.05) | |
Cash flow from operating activities | (1,104,908) | (578,540) | |
Cash flow from investing activities Cash flow from financing activities | (16,321,691) 19,527,719 | (9,818,047) 12,053,714 | |
For complete details, please refer to the AuditedConsolidated Financial Statements and associated Management Discussionand Analysis for the year ended December 31, 2021, available on SEDARat sedar.com oron the Company’s website at starroyalties.com .
Alex Pernin, Chief Executive Officer of Star Royalties,commented: “2021 was a transformation year for Star Royalties. InFebruary , we transitioned to a public companywith the completion of our upsized and oversubscribed IPO . In September, we acquired the Elk Gold royalty which nowrepresents cash flow in a tier-one jurisdictionfrom a high-margin gold mine. Our Keysbrookroyalty continues to outperform and exceed our cash flowexpectations. More recently, we established ourpure-green subsidiary, Green Star Royalties, in order to accelerateour green strategy. With that, we were able to secure a strategicinvestment from Agnico Eagle, a gold mining giant and a global ESGleader. This allowed us to immediately pursue a fourfold expansion ofour flagship regenerative agriculture royalty in partnership withBluesource, North America’s largest and most reputable carbon offsetdeveloper and marketer. We look forward to continuing the momentuminto what should be a yet-again transformational 2022.”
Corporate Developments
On March 31, 2022, the Company announced a non-brokeredprivate placement of 15,384,620 shares of its subsidiary Green StarRoyalties Ltd. (“ Green StarRoyalties ”), at a price of CAD$1.00 per GreenStar share (each a “ GreenStar Share ”). Agnico Eagle Mines Limited(“ Agnico Eagle ”) (TSX, NYSE: AEM) had agreed to purchase 14,134,620 GreenStar Shares for an aggregate purchase price of CAD$14,134,620. TheCompany’s management team and Board of Directors had agreed toconcurrently purchase the remaining 1,250,000 Green Star Shares for anaggregate purchase price of CAD$1,250,000.
Upon completion of this private placement, expected inApril 2022, Green Star Royalties will be owned in the approximateamounts as follows: 61.9% by Star Royalties; 35% by Agnico Eagle; and3.1% by the Company’s management team and Board of Directors.
Significant Portfolio Updates
Elk Gold Project
On February 3, 2022, Gold Mountain Mining Corp. (“ Gold Mountain ”) (TSX:GMTN, OTCQB: GMTNF, FRA: 5XFA) announced that ithad completed its first delivery of ore to New Gold Inc.’s (“ New Gold ”) (TSX, NYSEAmerican: NGD) New Afton processing plant. Thematerial was mined from the Elk Gold Mine’s 1300 vein, located atthe footwall of historic Pit 2, which was last mined from 2012 to 2014at an average gold grade of 16.7 g/t. Under its ore purchase agreement(“ OPA ”), Gold Mountain will deliver to New Gold 70,000 tonnes ofhigh-grade ore per annum in years 1 to 3 and then up to 350,000 tonnesper annum in years 4 to 11. The metal payable split from the orepurchase agreement is 89% to Gold Mountain and 11% to New Gold. TheOPA allows Gold Mountain to be paid on a monthly basis for all oredelivered.
On February 15, 2022, Gold Mountain announced thediscovery of a new high-grade gold system in the Elusive Zone, located5km southwest of the Siwash North mineral resource. The diamond drillintercepts, including hole SND21-051 with 2.07m grading 51.15 g/t Au,confirmed the presence of multiple high-grade zones.
On March 22, 2022, Gold Mountain announced that it hadreceived payment for its first-month of ore delivery to NewGold.
Copperstone Gold Project
On February 23, 2022, Sabre Gold Mines Corp.(“ Sabre Gold ”) (TSX: SGLD, OTCQB: SGLDF) provided a Copperstone Gold Project update andindicated that significant progress had been made with detailed mineplanning, process engineering and mine-rehabilitation. These effortswere a continuation of earlier work completed to prepare the fullypermitted mine for start-up and progression to full production. Acomprehensive detailed mine plan and production schedule was completedby Mine Development Associates in Reno, Nevada that defined stopes andproduction areas for the initial five years of mine-life. The mineplan indicated annual production of approximately 40,000 to 45,000ounces per annum, while demonstrating favourable economics includingfuture expected conversion of additional resources based on the openextent nature of both the Copperstone and Footwall zones. Years 5 to13 are scheduled to produce from areas that currently have inferredresources and yet un-delineated extensions of the existing resources.Sabre Gold’s cash flow model included the required excavation ofdrill platforms as operational headings advance and the associateddrilling required to identify, confirm and define mineableareas.
Sabre Gold further stated that they continue to makesignificant progress at Copperstone in preparation of start-up withprogression to full production in the near term, now only subject toproject funding. Definition drilling and results to date arecontinuing to show strong grades and continuity, while adding furtherconfidence to the updated geological model anddetailed mine plan. Estimated project capital for the restart ofCopperstone remains in line with previous estimates, as they continueto advance discussions with project lenders as well as other keystakeholders, with an update on project funding to be provided in Q22022.
Regenerative Agriculture Carbon Program
In April 2022, the Company announced a fourfoldexpansion of its agreement with Blue Source, LLC (“ Bluesource ”),originally entered in December 2021, to create premium, verifiedcarbon offset credits that will reward the adoption of regenerativeagriculture practices by North American farmers. Under the amendedagreement, Green Star Royalties will be financing a regenerativeagriculture carbon program being developed and managed by Bluesourcefor total contribution of $20,625,000 in cash. Cash will beavailable to growers in this program through Locus AgriculturalSolutions’ (“ LocusAG ”) CarbonNOW ® program. LocusAG will be actively recruiting growers under this project until atotal of 1,320,000 acres of farmland across the United Sates have beenadopted into the program. The Company expects initial funding of$5,000,000 to commence in the second quarter of 2022, with theremaining $15,625,000 to be invested in 2023. This project investmenthas a term of 11.5 years and the future financial benefits derivedfrom the monetization of the project’s carbon offset credits will besplit between the growers, Bluesource, and the Company. The programexpects to generate revenues from an average of over 2,000,000 carbonoffset credits per annum, which will be available for sale in thevoluntary carbon marketplace. Green Star Royalties expects to generatecash flow equivalent to over 200,000 attributable carbon offsetcredits in 2024, and increasing to over 400,000 attributable carbonoffset credits per annum starting in 2025.
Elizabeth Metis Settlement Forest Carbon OffsetProject
In January 2022, the Company acquired an additional 27%gross revenue royalty on Elizabeth Metis Settlement’s(“ EMS ”) revenue share from the creation and sale of carbonoffset credits from forested lands located in Elizabeth MetisSettlement (the “ EMS ForestProject ”) in Alberta, Canada for $475,587(CAD$600,000) in cash. The gross revenue royalty covers the entireEMS Forest Project and has a term of the earlier of: 1) 10 yearscommencing on the date EMS receives any gross revenue from themonetization of carbon offset credits, or 2) the date hereof until thefirst 225,000 carbon offset credits are issued and sold in connectionwith the EMS Forest Project. In combination with the Company’spreviously acquired 13.5% gross revenue royalty in July 2021, theCompany now owns an effective 40.5% gross revenue royalty on the EMSForest Project.
CONTACT INFORMATION
For more information, please visit our website at starroyalties.com orcontact:
Alex Pernin, P.Geo.
Chief Executive Officer and Director
apernin@starroyalties.com
+1 647 801 3549
Dmitry Kushnir, CFA
Head of Investor Relations
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 regardingfuture market conditions for metals and minerals. Forward-lookingstatements are statements that address or discuss activities, eventsor developments that the Company expects or anticipates may occur inthe future which include but are not limited to statements relating tothe further expansion of gold mineralized zones at Arizona Gold, theexecution on opportunities within the Star Royalties pipeline,potential for re-rating catalysts, deployment of IPO funds, and thepursuit of a pipeline of additional green investments and preciousmetals investments. When used in this news release, words such as"estimates", "expects", "plans","anticipates", "will", "believes","intends" "should", "could","may" and other similar terminology are intended to identifysuch forward-looking statements. Forward-looking statements are madebased upon certain assumptions and other important factors that, ifuntrue, could cause the actual results, performances or achievementsof Star Royalties 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 numberof factors could cause actual results, performances or achievements todiffer materially from such forward-looking statements, including,without limitation, changes in business plans and strategies, marketconditions, share price, best use of available cash, the ability ofthe Company to identify and execute future acquisitions on acceptableterms or at all, risks inherent to royalty and streaming companies,title and permitting matters, metal and mineral commodity pricevolatility, discrepancies between actual and estimated production,mineral reserves and resources and metallurgical recoveries, miningoperation and development risks relating to the parties which producethe metals and minerals Star Royalties will purchase or from which itwill receive royalty payments, regulatory restrictions, activities bygovernmental authorities (including changes in taxation), currencyfluctuations, the global social and economic climate, naturaldisasters and global pandemics, in particular COVID-19, dilution, 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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