Star Royalties Ltd (TSX-V:STRR) said it has created the world’s first carbon negative gold royalty platform, Green Star Royalties.
Green Star will operate as a subsidiary of Toronto-based Star Royalties, which owns a portfolio of royalties on resource projects from gold to green investments.
In a statement, Star said that the rationale behind Green Star is to “address the positive response to the company’s novel green royalty model, the numerous origination opportunities, and the superior potential returns”.
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According to Star, Green Star Royalties positions the company to be carbon negative by 2023. Its existing and future carbon offset projects provide sequestration benefits that offset the company’s direct CO2 emissions from corporate activities and attributable CO2 emissions sourced from its gold equivalent ounces, it added.
Green Star will use existing management, infrastructure and oversight to grow as a private subsidiary until it achieves critical mass, determined by “appropriate market-value,” and ultimately launch as a public company, according to a statement.
A separately listed, green-dedicated royalty company will also facilitate and promote an enhanced fit with the rigorous investment mandates of rapidly expanding ESG-related funds, Star added.
Funding for Green Star will initially come from Star Royalties before bringing in a strategic capital partner.
“We are fundamentally passionate about financing a greener future with a conservative royalty and streaming investment model,” Star Royalties CEO Alex Pernin said in a statement.
“Green Star Royalties will provide our shareholders with exposure to what we believe is the inevitable and dramatic rise in carbon credit pricing required to reach global greenhouse gas emission reduction targets by 2030, as outlined in the Paris Agreement.”
Pernin told shareholders that to the company’s knowledge, Star Royalties was the first company to originate a carbon offset credit royalty.
“The potential returns we are currently seeing in the green sector are superior to what is commonplace in the precious metals sector. One of our objectives since the formation of Star Royalties was to simultaneously realize goodwill and good returns with intelligent, mutually beneficial, ESG-centred transactions.”
Green Star Royalties is expected to generate approximately 5,500 carbon offset credits per annum starting in 2023.
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