(TheNewswire)
August 24, 2022 – TheNewswire - TORONTO, ON – Star Royalties Ltd. (“ Star Royalties ”, or the “ Company ”) (TSXV:STRR ) , ( OTC:STRFF) is pleased to report its financial results for thequarter ended June 30, 2022. All amounts are in U.S. dollars unlessotherwise indicated.
Q2 2022 Corporate and FinancialHighlights
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Record quarterly revenue, with a 26% increase over theprior-year quarter.
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Strategic investment by Agnico Eagle Mines Limited( Agnico Eagle ”) (NYSE, TSX: AEM) into Green Star Royalties(“ Green Star ”) was completed in May 2022, with Star Royalties now a61.9% owner of Green Star.
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The Elk Gold mine became the Company’s secondproducing royalty asset.
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Recognized an $18.6 million gain on the deconsolidationof Green Star.
Alex Pernin, Chief Executive Officer of Star Royalties,commented: “During the second quarter of 2022, Star Royalties tooksignificant steps towards unlocking the value of both our green andprecious metals royalty and streaming platforms. We crystallized thegrowing value of Green Star through the closing of a private placementby Agnico Eagle and expanded Green Star’s flagship regenerativeagriculture carbon royalty more than fourfold. We also achieved recordquarterly royalty revenues as the Elk Gold mine became our secondproducing royalty asset and as Keysbrook continued to generate royaltycash flows greater than our internal expectations. We look forward tothe remainder of 2022 as we continue to unlock further Green Starvalue by building out its pipeline and by enhancing our team withcarbon project development expertise. ”
Summary of Q2 2022 FinancialResult s
Quarter ended | Quarter ended | ||
June 30, 2022 | June 30, 2021 | ||
Revenue | $ 264,203 | $ 208,948 | |
Net income/(loss) Basic and diluted income/(loss) per share | 17,816,144 0.24 | (805,293) (0.01) | |
Cash flow from operating activities | (286,703) | (305,114) | |
Cash flow from investing activities | (135,354) | - | |
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 June 30, 2022,available on SEDAR at sedar.com or on theCompany’s website at starroyalties.com .
Corporate Developments
Green Star JointVenture (61.9% interest)
Following the closing of the previously announcednon-brokered private placement in May 2022 by Agnico Eagle, Green Staris being accounted for by Star Royalties as a joint venture held 61.9%by Star Royalties, 35% by Agnico Eagle and 3.1% by the Company’smanagement team and members of the Board of Directors. Star Royaltiescontinues to use existing management to oversee the day-to-dayactivities of Green Star.
In accordance with IFRS 11 Joint Arrangement, the Company has derecognized related assets and liabilitiesof Green Star from its consolidated financial statements as of theclosing date of the private placement transaction in May 2022 andrecorded an initial recognition of an investment in the joint venture.This recognition has resulted in a gain of $18.6 million during thecurrent quarter for the Company.
Significant Portfolio Updates
Elk Gold Mine
On June 14, 2022, Gold Mountain Mining Corp.(“ Gold Mountain ”) (TSX: GMTN, OTCQB: GMTNF, FRA: 5XFA) reported that forthe quarter ending April 30, 2022, it delivered 1,898 ounces of goldand 1,697 ounces of silver to its ore purchase partner, New Gold Inc.(TSX, NYSE American: NGD). Gold Mountain also reported that it experienced challenges during commissioning withrespect to both grade control and sampling processes, which resultedin lower than forecast ore production during the initial ramp-up. Tomitigate these challenges, Gold Mountain has implemented a number ofinitiatives, including hiring industry experts with experience miningnarrow-vein deposits, implementing a more detailed in-fill drillprogram, and examining preconcentration technologies. GoldMountain’s operating team continues tooptimize Elk Gold’s processes while scaling to the contemplated Year1 production profile.
As of June 6, 2022, Gold Mountain had completed 15,500mof drilling in the Siwash North and Gold Creek zones as part of itsPhase III exploration program. An updated resource estimate on theproperty is anticipated at the end of Q3 2022.
Copperstone Gold Project
On June 1, 2022, Sabre Gold Mines Corp.(“ Sabre Gold ”) (TSX: SGLD, OTCQB: SGLDF) announced that the CopperstoneGold Project remains on track to advance to production within twelvemonths from funding with a strategy that remains focused on minimizingdilution to its existing stakeholders. Sabre Gold reported that theirrecent addition of Mike Maslowki, COO and Sid Tolbert, Vice PresidentGeneral Manager brings considerable underground experience that isexpected to further optimize project economics.
Green Star Developments
Regenerative Agriculture Carbon Program
In April 2022, Green Star announced a fourfoldexpansion of its flagship regenerative agriculture CarbonNOW® programwith Anew Climate, LLC (“ Anew ”, formerly Blue Source, LLC). Thisprogram, in partnership with Locus Agricultural Solutions(“ LocusAG ”) aims to create premium, verifiedcarbon offset credits that will reward the adoption of regenerativeagriculture practices by North American farmers. Under the amendedagreement, Green Star’s total contribution of $20.6 million willfinance a growing number of farmers entering CarbonNOW until a totalof 1,320,000 acres of farmland across the United Sates have beenrecruited into the program. Green Star expects to generate cash flowequivalent to over 200,000 attributable carbon offset credits in 2024,increasing to over 400,000 attributable carbon offset credits perannum starting in 2025.
Initial funding has commenced, with approximately $1.2million distributed to U.S. farmers to date, and the Company ispleased to report that the expected agriculture carbon credits fromthe distributed funds have already received purchase commitments fromcarbon buyers.
The adoption of farmers into the program continues toproceed in line with internal expectations, with over 40 farmers inover 25 states with an aggregate of several hundred thousand acreshaving received initial payment of funds. The remainder of GreenStar’s contribution is expected to take place over the second halfof 2022 and through 2023.
Green Star Focus and Outlook
The Company believes that Green Star remains uniquelypositioned to become a quality leader in creating premium carbonoffset credits from North American nature-based carbon projects.Management continues to focus its efforts on growing Green Star’spipeline of projects by leveraging its existing First Nations,Indigenous, and farming community partners, as well as its partnershipwith Anew.
In addition, Management is in the process of addinginternal carbon project development and nature-based solutionsexpertise to further reinforce its focus on project and carbon creditquality. These industry leaders are expected to join the recentlyestablished Technical Committee that will review new investmentopportunities and will have equal representation from Star Royaltiesand Agnico Eagle. Star Royalties continues to use its existingmanagement and infrastructure to grow Green Star at minimal cost as aprivate majority-owned joint venture and, subject to marketconditions, unlock additional value when an appropriate public marketvaluation is achieved.
CONTACT INFORMATION
For more information, please visit our website at starroyalties.com or contact:
Alex Pernin, P.Geo.
Chief Executive Officer and Director
apernin@starroyalties.com
+1 647 801 3549
Dmitry Kushnir, CFA
Vice President, 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 itsmajority-owned, pure-green joint venture, Green Star Royalties, andoffers investors exposure to precious metals and carbon credit priceswith an increasingly negative carbon footprint. The Company’sobjective is to provide wealth creation by originating accretivetransactions with superior alignment to both counterparties andshareholders.
QUALIFIED PERSON
Timothy Strong, MIMMM, is a qualified person underNational Instrument 43-101 - Standards of Disclosure for Mineral Projects ,has reviewed and approved the scientific and technical disclosurecontained in this press release.
CAUTIONARY NOTE REGARDING FORWARD-LOOKINGINFORMATION
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 conditions, ongoing marketdisruptions caused by the Ukraine and Russian conflict, metal andmineral commodity price volatility, discrepancies between actual andestimated production, mineral reserves and resources and metallurgicalrecoveries, mining operation and development risks relating to theparties which produce the metals and minerals Star Royalties willpurchase or from which it will receive royalty payments, carbonpricing and carbon tax legislation and regulations, risks inherent tothe development of the ESG-related investments and the creation,marketability and sale of carbon offset credits by the parties, thepotential value of mandatory and voluntary carbon markets and carbonoffset credits, including carbon offsets, risks inherent to royaltycompanies, title and permitting matters, operation and developmentrisks relating to the parties which develop, market and sell thecarbon offset credits from which Green Star will receive royaltypayments, 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, the market abilityof Green Star to undertake a go-public transaction in the future, thenature of the governance rights between Star Royalties and AgnicoEagle in the operation and management of Green Star and competition.These risks, as well as others, could cause actual results and eventsto vary significantly. Accordingly, readers should exercise caution inrelying upon forward-looking statements and the Company undertakes noobligation to publicly revise them to reflect subsequent events orcircumstances, except as required by law.
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