(TheNewswire)
Toronto , ON - TheNewswire - May 25, 2023 - Star Royalties Ltd. (“ Star Royalties ”, or the “ Company ”) (TSXV:STRR ) ( OTC:STRFF) ispleased to report its financial results for the quarter ended March31, 2023. All amounts are in U.S. dollars, unless otherwise indicated.
Q1 2023 Corporate and PortfolioHighlights
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Quarterly revenues of $271,429, representing a 12%decline over the prior-year quarter due to lower mineral sands salesat Keysbrook.
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Quarterly net income of $69,539 was positively impactedby a $606,880 recognition of equity income from the Green StarRoyalties Ltd. joint venture ( Green Star ”).
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Increased quarterly revenue from the Elk Gold mine of$54,959 related to continued improvements in mined goldgrades.
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Green Star’s flagship regenerative agriculture carbonfarming program continued to see steady farmer enrollment and is inthe process of listing under the Verra Registry.
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MOBISMART Mobile Off-Grid Power Storage Inc.( MOBISMART ”) became the first cash flowing royalty for GreenStar.
Alex Pernin, Chief Executive Officer of Star Royalties, commented:“During the first quarter of 2023, Keysbrook performed in line withinternal expectations, while Elk Gold’s continued mined gradeimprovements resulted in higher royalty payments. Our majority-ownedsubsidiary, Green Star, is pleased to report that MOBISMART became itsfirst cash flowing royalty as MOBISMART continues to execute on itscleantech sales pipeline across multiple industries. Green Star’sflagship regenerative agriculture program is undergoing listing underthe Verra Registry, which should lead to several catalysts throughoutthis year. In addition, Green Star continues to evaluate capitalraising opportunities to transact on its significantly expandedportfolio of carbon opportunities. Our team is working diligently andwe believe 2023 will be a transformative year of unlocking value forour shareholders.”
Summary of Q1 2023 FinancialResults
Quarter ended | Quarter ended | ||
March 31, 2023 | March 31, 2022 | ||
Revenue | $ 271,429 | $ 307,659 | |
Net Income (loss) | 69,539 | (706,393) | |
Basic and diluted income (loss) per share | 0.00 | (0.01) | |
Cash flow from operating activities | (369,976) | (564,625) | |
Cash flow from investing activities | - | (722,078) | |
Cash flow from financing activities | - | - | |
For complete details, please refer to the CondensedInterim Consolidated Financial Statements and associated ManagementDiscussion and Analysis for the three months ended March 31, 2023,available on SEDAR at sedar.com or on theCompany’s website at starroyalties.com .
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 delivered operating results ahead of theCompany’s internal expectations. In the first quarter of 2023,royalty revenues from Keysbrook were $216,470,which was 30% lower compared to the prior-yearquarter due to lower mineral sands sales, but was in line withinternal Q1 2023 expectations.
Elk Gold Mine
Gold Mountain Mining Corp. (“ Gold Mountain ”)(TSX: GMTN, OTCQB: GMTNF, FRA: 5XFA) continued ore mining operationsand deliveries to New Gold Inc. (TSX, NYSE American: NGD) and hasdemonstrated continued grade profile improvements through the end ofthe current quarter. For the period ending March 31, 2023, Elk Goldbenefited from continued month-over-month improvements in mined goldgrades, with the highest grades to date reported in the month ofMarch. Improved grades have been partially offset by lower orethroughput during the period, associated mostly with weather-relatedchallenges. As a result of improving mined grades, which exceeded thelast reported average mined grade of 5.5 g/t Au (in the quarter endingJanuary 31, 2023), the quarterly royalty payment from the Elk Goldmine increased to $54,959. After the end of the first quarter, Gold Mountain enteredinto a C$3.3 million silver royalty on the Elk Gold mine and completedits final C$3 million property payment related to its originalpurchase of the Elk Gold mine. These respective developments provide athird-party validation of the Company’s value accretion since havingacquired the royalty in September 2021 and enhance Gold Mountain’sfinancial position. Gold Mountain expects torelease an updated Preliminary Economic Assessment (“PEA”) and amineral resource update in the fourth quarter of 2023. The Company’smanagement conducted a site visit to the Elk Gold mine in April andreceived an update on its underground expansion potential. GoldMountain has begun discussions with the British Columbia Governmentand early engagement with surrounding Indigenous communities toproactively manage any permitting or community requirements. GoldMountain anticipates providing a more detailed project update as partof the revised PEA.
Green Star Joint Venture (61.9% interest)
During the first quarter of 2023, Green Star continuedto review and expand its investment pipeline of premium, NorthAmerican, nature-based environmental solutions. These opportunitiesinclude potential investments in regenerative agriculture, improvedforest management, livestock enteric methane reduction, biochar, andother category types. Green Star also continues to evaluate capital raising opportunities through a combinationof private and public markets to begin transacting on itsadvanced-stage 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, was appointed as Co-Chair of IETA’sworking group on Voluntary Carbon Markets (“VCM”). The workinggroup reinforces IETA’s guiding principles on trust, integrity,connectivity and ambition to implement change and provides thoughtleadership and advocacy in the continued evolution of the VCM.
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 program’s farmer enrollment is nowprogressing beyond its original 320,000-acre scope and the program iscurrently undergoing listing by Anew under the VerraRegistry . CarbonNOW is being developed under thegrouped project “Anew Agri-Carbon Project” under Verra’sMethodology for Improved Agricultural Land Management, v1.0 (VM0042).Following the listing phase, the project will undergo a publicconsultation period of 30 days, followed by validation andverification audits conducted by a third-party Verra-approvedvalidation and verification body. Once these audits are finalized, theproject will be registered and its associated carbon credits will beissued.
Soil sampling on enrolled acres is underway, with soilcarbon measurements expected over the next several months. At theprogram’s full scope of 1.32 million acres of U.S. farmland, GreenStar continues to expect to generate cash flow equivalent to well over400,000 attributable carbon credits per year.
In early 2022, Green Star acquired a 2.5% gross revenueroyalty on MOBISMART, a private operating company that specializes inmobile solar power and fuel cell generation systems with integratedbattery storage and diesel displacement capabilities. As previouslyreported, MOBISMART recently transitioned from research anddevelopment to commercialization, and in thefirst quarter of 2023, became Green Star’s first cash flowing asset,with a quarterly royalty payment of $3,131.
During the quarter, MOBISMART signed a multi-unit orderto deliver trailerized solar units to a leading provider of LIDARsystems in North America. MOBISMART’s products were selected due totheir ability to provide dependable power in remote locations whileboth eliminating their client’s reliance on diesel generators andimproving project returns. In addition, pilot unit installations areunderway with NAV CANADA, where MOBISMART aims to use its solarsolutions combined with fuel cells to provide 100% guaranteed backuppower at civil air navigation system sites maintained by NAV CANADAnationwide.
In the telecommunications segment, MOBISMART hascommenced a pilot program with a large U.S. telecommunicationsprovider to displace diesel as a primary power source as well as fuelcell technology to displace their battery backup power systems. Thisprogram is starting with major markets in Los Angeles and Dallas andis expected to continue to roll out across the United States.
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%. The EMS Forest Project representsone of four Improved Forestry Management (“ IFM ”) projectsbeing developed by Anew across 255,000 acres of Metis Settlement landsin Alberta. The project’s carbon credits are anticipated to beissued either under the IFM protocol of Canada’s Greenhouse GasOffset Credit System (federal offset system), or the TechnologyInnovation and Emissions Reduction Regulation (Alberta offset system).Both compliance-grade IFM protocols are currently under development.Environment and Climate Change Canada anticipates that a draft of thefederal protocol will be released for public comments during thesecond quarter of 2023, with the final version to follow in the fallof this year. As the federal and provincial IFM protocols nearfinalization, the project stakeholders will choose the respectiveprotocol that will maximize carbon credit value and other benefits forthe EMS Forest Project.
CONTACT INFORMATION
For more information, please visit our website at starroyalties.com orcontact:
Alex Pernin, P.Geo. | Dmitry Kushnir, CFA |
Star Royalties Ltd. is a precious metals and carbon creditroyalty and streaming company. The Company innovated the world’sfirst carbon credit royalties in forestry and regenerative agriculturethrough its majority-owned, pure-green joint venture, Green StarRoyalties Ltd., and offers investors exposure to precious metals andcarbon credit prices. The Company’s objective is to provide wealthcreation by originating accretive transactions with superior alignmentto 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 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 anycapital financing transactions, risks inherent to a possible GreenStar go-public transaction, the nature of the governance rightsbetween Star Royalties and Agnico Eagle Mines Limited in the operationand 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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