Star Royalties Ltd (TSX-V:STRR) has added a new green royalty to its portfolio.
The Toronto-based company announced an agreement with Elizabeth Metis Settlement (EMS) to acquire a 13.5% gross revenue royalty on EMS’s revenue share of carbon credit offsets from the EMS Forest Project in Alberta.
EMS derives revenue from the creation and sale of emission reduction benefits from 15,457 hectares of forest located in the province. Star Royalties has paid C$300,000 for the 13.5% royalty and expects it to start generating revenue in 2023.
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Under the term sheet, the royalty covers the entire EMS Forest Project and has a term of either 10 years starting on the date EMS receives any gross revenue from the monetization of emission reduction benefits or until the first 225,000 emission reduction benefits are issued and sold – whichever comes first.
Alex Pernin, Star Royalties’ CEO, told investors that the project has the potential to sequester significant amounts of atmospheric CO2 per year from “enhanced management” of the forest resource.
“This royalty transaction not only represents a pure green investment in a tier-one jurisdiction with cash flow visibility, but it also highlights the potential for us to transact with other Indigenous communities in unlocking their many carbon sequestration opportunities. Our company is committed to sustainable environmental solutions and continues to view this as a highly scalable business model with attractive returns," he said in a statement.
Star Royalties is targeting 80% of its capital allocation to precious metals, with up to 20% available for predominantly green investments, which includes a 16% gross revenue royalty on AurCrest Gold’s forest carbon sequestration revenue share in the Lac Seul First Nation forest pilot project.
It also owns royalties on the Copperstone gold project in Arizona and Keysbrook, a mineral sands project in Western Australia.
Contact Angela at angela@proactiveinvestors.com
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