(TheNewswire)
T oronto , ON - TheNewswire - April 28, 2023 - Star Royalties Ltd. (“ Star Royalties ”, or the “ Company ”) (TSXV:STRR ) ( OTC:STRFF) ispleased to report its financial results for the year ended December31, 2022, as well as to provide an update on its royalty portfolio.All amounts are in U.S. dollars, unless otherwise indicated.
2022 Corporate and PortfolioHighlights
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2022 revenues represent a 43% increase over the prioryear, including record quarterly revenue in the fourthquarter.
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Record quarterly and annual revenue from the Keysbrookroyalty.
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Progressive improvements in operating performance androyalty payments from the Elk Gold Mine.
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Continued farmer enrollment into Green Star RoyaltiesLtd.’s (“ GreenStar ”) flagship regenerative agriculturecarbon farming program, now representing approximately 115 farmersfrom across the United States.
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Transition to commercialization at MOBISMART MobileOff-Grid Power Storage Inc. ( MOBISMART ”) to result in first royaltyrevenues for Green Star.
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Green Star investment pipeline now includes 22opportunities under evaluation.
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Ongoing initiatives by new management at Sabre GoldMines Corp. ( SabreGold ”) (TSX: SGLD, OTCQB: SGLDF) to acceleratefunding of the fully-permitted Copperstone Gold Mine.
Summary of Annual FinancialResults
Year ended | Year ended | ||
December 31, 2022 | December 31, 2021 | ||
Revenue | $ 1,415,498 | $ 988,030 | |
Net Income (loss) | 17,331,943 | (2,669,282) | |
Basic and diluted income (loss) per share | 0.24 | (0.04) | |
Cash flow from operating activities | (767,679) | (1,104,908) | |
Cash flow from investing activities | (901,451) | (16,321,691) | |
Cash flow from financing activities | - | 19,527,719 | |
For complete details, please refer to the AuditedConsolidated Financial Statements and associated Management Discussionand Analysis for the year ended December 31, 2022, available on SEDARat sedar.com oron the Company’s website at starroyalties.com .
Alex Pernin, Chief Executive Officer of Star Royalties, commented:“We commenced 2023 following a year of significant development andmultiple growth catalysts across our royalty portfolio. Our miningportfolio continues to demonstrate positive momentum, with continuedoutperformance from Keysbrook, promising operational improvements atElk Gold, and progressive steps at Copperstone to accelerate itsfinancing pathway. Our majority-owned subsidiary, Green Star, is wellunderway to establishing itself as the quality leader in the carboncredit royalty space, with its growing pipeline of premium carboncredit investment opportunities and its recent inclusion in theInternational Emissions Trading Association. We view 2023 as a year ofunlocking value for our shareholders. Upcoming key catalysts includeimproving cash flow visibility across our existing mining and greenroyalty and streaming assets, raising capital for Green Star with theprospect of an eventual go-public event, and executing on oursignificantly expanded portfolio of carbon opportunities.”
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 royaltypayment for the fourth quarter of 2022. Full-year 2022 royaltyrevenues from Keysbrook were 33% higher than in the prior year, drivenby a combination of strong operating performance andhigher-than-anticipated commodity prices.
Elk Gold Mine
Gold Mountain Mining Corp. (“ Gold Mountain ”)(TSX: GMTN, OTCQB: GMTNF, FRA: 5XFA) resumed ore mining operations anddeliveries to New Gold Inc. (TSX, NYSE American: NGD) during thequarter ended October 31, 2022. Gold Mountain expects a new open pitdesign from its recently completed 3,700m in-fill drill program tobetter define the grade control model, and for its drilling andblasting optimization and ore fragmentation initiatives to result inimproved efficiency and grade profile. A new mine manager and anadditional ore control geologist were recently hired to increase focuson reducing dilution and improving grade reconciliation. Gold Mountaincontinues to investigate ore preconcentration technologies to furtherimprove project economics.
In early March 2023, Gold Mountain reported continuedoperational improvements at the Elk Gold Mine, including fourconsecutive months of grade improvement, with January being the bestmonth since operations began in February 2022, with an average headgrade of 6.04 g/t Au. The revenue generated by the Elk Gold Project inthe month of January exceeded the revenue reported for the quarterended October 31, 2022.
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. The focus of GoldMountain’s exploration program is mainly on resource expansion,targeting the Gold Creek, Lake, South and Elusive Zones, and itsmanagement anticipates providing an updated resource estimate and apreliminary economic assessment in the fourth quarter of 2023. ElkGold Mine’s strong grade profile, ongoing exploration success, andlonger-term resource potential remain the key drivers for valueaccretion and the basis for Star Royalties when it acquired theroyalty in September 2021.
Copperstone Gold Mine
In the fourth quarter of 2022 and in early 2023, SabreGold had undertaken multiple restructuring initiatives to advance itsfully-permitted Copperstone Gold Mine toward production. Theseinitiatives included the sale of various non-core assets and theappointment of Andrew Elinesky, CPA as Sabre Gold’s new ChiefExecutive Officer. Specifically, Sabre Gold sold its 1% NSR royalty onthe Kerr-Addison Mine claims for a total consideration of $7 million,with proceeds of the sale allocated to the buyback and cancellation ofa 3% NSR royalty on Copperstone, as well as reduction and extension ofits overall debt. Sabre Gold also announced the sale of non-coreassets and a closing of the first tranche of an equity financing of upto C$1.5 million. Sabre Gold continues to explore additionalopportunities to further optimize its asset portfolio and acceleratethe funding of the Copperstone Gold Mine. Sabre Gold’s managementbelieves that their improved financial position and lower royaltyburden should facilitate discussions with potential financial partnersto bring the Copperstone Gold Mine in Arizona to production.
Green Star JointVenture (61.9% interest)
In late 2022, Green Star’s appointments of TanushreeBagh Mukherjee as Chief Development Officer and Rina Cerrato as ChiefCommercial Officer significantly strengthened its carbon market andproject development expertise. Its expanded investment pipeline ofpremium, North American, nature-based environmental solutions nowincludes multiple opportunities in regenerative agriculture, improvedforest management, livestock enteric methane reduction, biochar, andother category types. Green Star’s advanced-stage pipeline now consists of 22 opportunities,whose aggregate capital required would exceed C$200 million. GreenStar is actively evaluating capital raising opportunities through acombination of private and public markets to begin executing on itsgrowing pipeline.
In addition, in early 2023, Green Star became a memberof the International Emissions Trading Association (“ IETA ”), a leadingindustry association focused on market-based climate solutions. IETArepresents approximately 500 Canadian and international companies overmultiple sectors on the design and implementation of carbon pricingand climate finance mechanisms. In April, Rina Cerrato, Green Star’sChief Commercial Officer, has been appointed as Co-Chair of theInternational Emissions Trading Association (“IETA”) working groupon Voluntary Carbon Markets (“ VCM ”). The working group reinforces IETA’sguiding principles on trust, integrity, connectivity and ambition toimplement change and provides thought leadership and advocacy in thecontinued evolution of the VCM.
Regenerative Agriculture Carbon Farming Program
Green Star’s flagship regenerative agricultureCarbonNOW® farming program is a partnership with Anew Climate LLC andLocus Agricultural Solutions® (“ Locus AG ”). Duringthe fourth quarter of 2022 and into 2023, the program continued toenroll new farmers, as well as optimize the effectiveness of itsaward-winning microbial probiotic solutions. Its premium, verifiedcarbon credits will reward the adoption of regenerative agriculturepractices by North American farmers. As of the 2023 Springenrollment, the program has exceeded its original pilot scope of320,000 acres and now includes approximately 115 growers across theUnited States. At its full scope of 1.32 million acres of U.S.farmland, the program will represent just ~0.3% of total U.S. rowcrops, with significant potential for further expansion. Soil samplingis currently underway on enrolled farmland, with additional projectupdates expected in the coming months.
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 storageand diesel displacement capabilities. Green Star is pleased to reportthat MOBISMART has since transitioned from research and development tocommercialization, with its key sales and marketing initiativesfocused on the North American telecommunications, defense, andconstruction industries. In the renewable energy and instrumentationsegment, MOBISMART has already sold several units, with deliveryoccurring in the first quarter of 2023 and further new unit ordersanticipated from this segment throughout the coming year.
Green Star is pleased to announce that MOBISMART becameits first revenue-generating royalty in the first quarter of 2023 andit welcomes MOBISMART’s growing manufacturing and sales trajectory.Additional information and outlook on MOBISMART’s maiden royaltypayment will be provided with the financial results for the firstquarter of 2023.
CONTACT INFORMATION
For more information, please visit our website at starroyalties.com orcontact:
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. 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 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 relatingto the parties which develop, market and sell the carbon offsetcredits from which Green Star will receive royalty payments, changesin crop yields and resulting financial margins regulatoryrestrictions, activities by governmental authorities (includingchanges in taxation), currency fluctuations, the global, federal andprovincial social and economic climate in particular with respect toaddressing and reducing global warming, natural disasters and globalpandemics, dilution, risk inherent to anycapital financing transactions, risks inherent to a possible GreenStar go-public transaction, the nature of the governance rightsbetween Star Royalties and Agnico Eagle in the operation andmanagement 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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