Star Royalties Reports Q1 2025 Financial Results

(TheNewswire)

May 27, 2025, TORONTO, ON –TheNewswire - Star Royalties Ltd. (“Star Royalties”, or the “Company”) (TSXV: STRR, OTCQX:STRFF) today reported its financial results for the quarter endedMarch 31, 2025. All amounts are in U.S. dollars, unless otherwiseindicated.

Q1 2025 Financial and CorporateHighlights

• Quarterly revenues of $160,539 represented a decreasefrom the prior-year period due to less materials being sold at theKeysbrook Mine (Keysbrook”). Keysbrook’s performance thisquarter was in line with its operator-provided budget. 

• The Copperstone Gold Mine (Copperstone”) wasacquired by Minera Alamos Inc. (“Minera Alamos”)(TSXV: MAI, OTCQX: MAIFF),resulting in an accelerated pathway to production in 2026, withmultiple development and construction catalysts expected over the next12 months. In addition, the Company’s corporate liquidity wasimproved by the conversion of a C$2 million receivable into additionalMinera Alamos equity as part of the transaction. 

• Outlook for the Company’s mining royalty portfoliohas improved considerably since the prior-year period primarily due toCopperstone’s de-risking and the increase in the gold price to wellabove $3,000/oz. 

• At 45.9%-owned Green Star Royalties Ltd. (Green Star”),worsening carbon market conditions and a deteriorating CarbonNOWrisk/return profile resulted in the decision to terminate futurecapital commitments to the carbon farming program. 

Summary of Annual FinancialResults

For complete details, please refer to the CondensedInterim Consolidated Financial Statements and associated ManagementDiscussion and Analysis for the three months ended March 31, 2025,available on SEDAR+ at sedarplus.ca or on the Company’s websiteat starroyalties.com.

Alex Pernin, Chief Executive Officer of Star Royalties, commented:“We remain focused on Copperstone’s pathway to production in 2026and look forward to its upcoming milestones later this year, whichinclude financing package completion and refurbishment activities atsite. Copperstone’s de-risking progress and the current gold priceenvironment of over $3,000/oz have not been reflected in our shareprice, and we believe this valuation gap will close as this keyinvestment advances towards meaningful revenue generation.”

“During the first quarter, operations at Keysbrook were in line withthe operator’s budget and our expectations, and we are encouragedwith the operator’s ongoing activities to extend Keysbrook’s LOM.At Elk, Gold Mountain’s management is undertaking an internal reviewof Elk’s technical report which should result in a more accurateunderstanding of the resource model and a more reliable mining plan.At our Green Star joint venture, the team is actively evaluatingseveral decarbonization opportunities with the support of ourjoint-venture partners. We look forward to providing our shareholderswith tangible updates across our portfolio over the course of 2025 aswe progress towards meaningful cash flow generation in 2026.”

Significant Portfolio Updates

Mining Royalty Portfolio Updates

Keysbrook Mine

Star Royalties owns a 2% minerals royalty on Keysbrook,
an open pit mineral sands (leucoxene, zircon) mine located 70 km south
of Perth, WA, Australia, and in operation since 2015. First quarter
2025 royalty income from Keysbrook was $152,834, a decrease from
$265,015 in the prior-year period due to less materials being sold
than produced in the most recent quarter. Operating results were in
line with the operator’s production budget and the Company’s
expectations. Furthermore, the Company understands that Keysbrook’s
operator is actively undergoing routine landowner access approval
processes to extend Keysbrook’s Life-of-Mine (“LOM”). These LOM
extensions are currently being reviewed by various Australian federal,
state and shire authorities. The Company estimates these efforts would
result in Keysbrook having a LOM extension to 2029, with a potential
further LOM extension into the 2030’s subject to additional landowner access approvals.

Copperstone Gold Mine

On February 6, 2025, Minera Alamos announced the
closing of its previously announced acquisition of Sabre Gold Mines
Corp. (“Sabre
Gold”), the prior owner of Copperstone.
Following the closing of the transaction, the Company’s holding of
13,842,4136 shares of Sabre Gold were converted into 9,592,792 shares
of Minera Alamos, while its 4% gold stream on Copperstone remained
unchanged. At the end of the reporting period, the value of the Minera
Alamos equity held by the Company was C$3.3 million.

On March 12, 2025, Minera Alamos re-issued
Copperstone’s Preliminary Economic Assessment (“PEA”), which
estimated Copperstone would generate $298 million in after-tax net
cash flow, have an after-tax NPV5% of $227 million, and generate an
after-tax IRR of 171% assuming a gold price of $3,000/oz. Minera
Alamos has identified several opportunities to enhance value at
Copperstone that will be further evaluated during the development
phase, including:

• additional drilling with the goal of expanding mineral
  resources; 
  

  
  

• investigating if previous marginal grade material can
  be added to production stopes given improved gold prices; 
  

  
  

• evaluating opportunities to increase plant throughput
  from potential increases in mining rates and from potential resource
  expansion; 
  

  
  

• as well as evaluating options for leveraging used
  equipment to reduce initial capital expenditures and lead
  time. 
  

  
  

Minera Alamos has also identified several exploration
opportunities to further enhance value at Copperstone,
including:

• drill testing for the presence of the Footwall Zone at
  depth and underneath the D Zone; 
  

  
  

• continued drilling to define and expand the Southwest
  Zone located 760m southwest of the Copperstone pit; 
  

  
  

• following up on the historic drill hole CS-266 that
  intercepted 3.4 g/t gold over 3.0m approximately 200m southwest of the
  Copperstone pit; 
  

  
  

• as well as following up on historic drill hole 06CS-20
  that intercepted 20.5 g/t gold over 1.5m approximately 900m southwest
  of the Copperstone pit. 
  

  
  

The Company is relying on Minera Alamos’ disclosure
from its March 12, 2025 press release for the accuracy of
Copperstone-related information and on Mr. Darren Koningen, P. Eng.,
Minera Alamos’ CEO, as the Qualified Person responsible for the
technical content related to Copperstone under National Instrument
43-101.

Subsequent to the current reporting period, on May 1,
2025, Minera Alamos announced that it was reviewing several indicative
term sheets connected to Copperstone’s project financing with due
diligence already underway. Minera Alamos anticipates finalizing a
complete project finance package for Copperstone early in the second
half of 2025. It also announced the appointment of Kevin Small,
P.Eng., as EVP Operations as part of its plan to rapidly advance
engineering for Copperstone’s restart. Mr. Small is a mining
engineer with 35 years in the industry who has extensive experience with the development and operation of
underground mining projects, and has already been actively involved in
the engineering work underway for Copperstone. The project engineering
work includes the optimization of the underground mine restart plans
along with an adjustment to the existing Plan of Operations for the
site which is anticipated to be approved towards the end of 2025.
 Minera Alamos reported that final preparations are being completed
to transfer its existing used process plant equipment to Copperstone
so that refurbishment activities can be initiated in advance of their
installation at site. Minera Alamos continues to anticipate
Copperstone production to commence in 2026.

Elk Gold Mine

First quarter 2025 royalty income from the Elk Gold
Mine (“Elk”) was $7,705 compared to $10,380 in the 2024 comparable
period. On March 17, 2025, Gold Mountain Mining
Corp. (“Gold
Mountain”) (TSX: GMTN,
OTCQB: GMTNF, FRA: 5XFA) provided an operational update for the
quarter ended January 31, 2025. During this period, Gold Mountain
continued to focus on waste stripping, but did report mining 10,055
tonnes of ore from the Siwash North Pit with an average delivered ore
grade of 1.23 g/t gold.

On May 12, 2025, Gold Mountain provided a further
operational update on Elk, explaining that low production results for
the preceding several quarters were attributable to substantially
reduced operational activities during this period. Gold Mountain
commenced an internal review of its Technical Report for Elk, which
includes a complete relogging of all core data. Gold Mountain
anticipates that relogging will be completed in late 2025, with
production operations to be reduced substantially until a new mine
plan, National Instrument 43-101 compliant mineral resource estimate,
and technical report are issued. Additionally, Gold Mountain plans to
incorporate upcoming exploration drilling results from the Bullion
Zone, an area located immediately north of the Siwash North Pit, into
its resource estimate, where preliminary observations support
additional drilling.

In light of this announcement, the Company does not
anticipate generating meaningful royalty income from Elk for the
remainder of 2025 and will update its expectations of royalty payments
upon release of the aforementioned disclosure from Gold Mountain later
in 2025.

Non-Core Assets

The Company holds a 1.5% gross revenue royalty in
respect of the Baavhai Uul property located in Mongolia and operated
by Lithium ION Energy Ltd (TSXV:ION, FSE:ZA4). The Company also holds
a 2% net smelter return royalty in respect of the Bayan Undur copper
project located in Mongolia and operated by Aranjin Resources Ltd
(TSXV:ARJN). The operators of the Baavhai Uul and Bayan Undur projects
announced on April 30, 2025, that exploration efforts for both
projects would be discontinued and both projects were deemed fully
impaired by the respective operators. Consequently, the Company
recognized an impairment loss on the Baavhai Uul royalty of $130,650
and an impairment loss on the Bayan Undur royalty of $139,384 in the
current reporting period.

Green Star Joint
Venture (45.9% interest)

Green Star continues to operate as a joint venture
between Star Royalties, Agnico Eagle Mines Limited (“Agnico Eagle”)
(NYSE, TSX: AEM), Cenovus Energy Inc. (“Cenovus”) (NYSE,
TSX: CVE), and certain members of Star Royalties’ and Green Star’s
management teams and Boards of Directors (collectively,
“Management”). The Company retains ownership of approximately 45.9% of
Green Star’s common shares, Agnico Eagle and Cenovus each own
approximately 25.9% of the common shares and the remaining 2.3% is
owned by Management.

Green Star Strategy

On April 28, 2025, the Company provided an update on its Green Star
strategy, which can be found on the Company’s website at News Release (Apr 28,
2025) - Star Royalties. As previouslyreported, considerable headwinds in North American voluntaryand compliance carbon markets negatively impacted carbon markets overthe past several quarters, resulting in reduced carbon pricing anddemand. During first quarter of 2025, nature-based solutions carbonoffsets experienced a 10% price decrease overall, while total carbonoffset issuances declined by 20% year-over-year to 61.2 million, thelowest first-quarter volume since 2020, primarily due to a significant(33.5%) decrease in forestry issuances.

Following a reassessment of the risk/return profile of several ofGreen Star’s assets, Green Star decided to terminate future capitalcommitments to the CarbonNOW® carbon farmingprogram, as described in detail in the Company’s April 28 pressrelease. Green Star’s mandate to grow into a long-term decarbonization investment firm continues to be supported bythe Company’s joint-venture partners and Green Star’s remainingcapital of $7.2 million will be allocated to high-quality, de-risked,cash-flowing royalties on decarbonization projects with a strict focuson robust cleantech and premium carbon credit opportunities intop-tier jurisdictions. A key priority is to ensure that Green Starremains fully funded and self-sufficient over the longer term.

Regenerative Agriculture Carbon Farming Program

Green Star’s regenerative agriculture investment inthe CarbonNOW® farming program was a partnership with LocusAgricultural Solutions® that incentivized the adoption ofregenerative agriculture practices by North American farmers on up to1.32 million acres of farmland. As reported inthe Company’s April 28 press release, Green Star and its projectpartners reached an agreement to terminate future capital commitmentsto the CarbonNOW program due to a deteriorating return profile and aconclusion that the program could not be sufficiently restructured towarrant additional investment. Following termination of the program,Green Star has no further funding obligations nor investment interestin CarbonNOW.

NativState Improved Forest Management Carbon OffsetPortfolio

Green Star owns several gross revenue royalties on acarbon offset-issuing portfolio of Improved Forest Management(“IFM”) projects in the southeastern United States, developed byNativState LLC (“NativState”). NativState is anArkansas-based forest carbon project developer that aggregatessmall-to-medium forest landowners into IFM projects under the AmericanCarbon Registry (“ACR”). These royalties are expected todeliver voluntary carbon offsets to Green Star over a 20-year period,with the first approximately 120,000 carbon offsets received from theNativState investment in 2024.

During the first quarter of 2025, Green Star engagedwith multiple voluntary carbon market intermediaries to monetizealready-issued avoidance and removal offsets from Project ACR 783.Subsequent to the reporting period, all removal offsets in GreenStar’s inventory had been sold, along with a small portion of theavoidance offsets. Green Star is continuing efforts to monetize theremainder of avoidance offsets through active bids via intermediariesand is exploring other monetization strategies, such as long-termofftakes with corporate partners, as well as participating in directsales through NativState. The Company looks forward to providing anupdate on these efforts in the coming months.

In addition to Project ACR 783, Green Star’sinvestment financed the conservation of approximately 60,000 acres offorestland to be enrolled by NativState and registered as ACRprojects. As previously reported, the first two of these additionalprojects are Project ACR 912 and Project ACR 913, which are currentlybeing prepared for validation and verification under ACR’smethodology Improved Forest Management (IFM) on Non-Federal U.S.Forestlands version 2.1. Additional information on Projects ACR 783,ACR 912 and ACR 913 can be found on the Company’s website atNativState - Star
Royalties.

Outlook and CorporateExpenditures

Since founding Star Royalties, a principal goal ofmanagement has been to ensure maximum alignment between the Company'smanagement and its shareholders. Given the Company’s strictobjective of ensuring adequate working capital until the Companybegins to generate free cash flow, management has initiated severalcost-saving initiatives, including eliminating all remainingnon-essential expenses, deferring senior management salaries, andreducing the size of its Board of Directors. With these additionalcash conservation measures, the Company is projected to have thelowest G&A and management compensation among its gold royaltypeers.

The Company's equity ownership of Minera Alamosrepresents an additional source of liquidity and management believesthis equity ownership to not only be a meaningful asset but anundervalued one as well based on Minera Alamos’ track record ofdeveloping mines into production, and its diversified portfolio ofproducing and development assets in Mexico and Arizona, all supportedby a robust gold price environment of well over $3,000/oz. Managementexpects that the ongoing cost-saving initiatives, alongside itsinvestment holding of 9.6 million Minera Alamos shares, should ensure the Company is wellpositioned until it begins to receive gold stream revenues fromCopperstone production in 2026.

CONTACT INFORMATION

For more information, please visit our website atstarroyalties.com orcontact:

About Star Royalties Ltd.

Star Royalties Ltd. is a precious metals and carbon credit royalty andstreaming company. The Company’s objective is to provide wealthcreation by originating accretive transactions with superior alignmentto both counterparties and shareholders. The Company offers investorsexposure to precious metals and carbon credit prices, as well ascleantech and other decarbonization projects through its pure-greenjoint venture, Green Star Royalties Ltd.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this news release may constitute“forward-looking statements”, including those regarding theRoyalties transaction, future market conditions for metals, mineralsand carbon offset credits, future capital raising opportunities andcommitments, timing with respect to the carbon offset issuances underthe NativState projects, demand and growth of the MOBISMART products,timing of the updated ACR protocols with respect to IFM projects. andthe future business growth and cash flow of the Company and GreenStar. 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 other similarterminology are intended to identify such forward-looking statements.Forward-looking statements are made based upon certain assumptions andother important factors that, if untrue, could cause the actualresults, performances or achievements of Star Royalties and Green Starto be materially different from future results, performances orachievements expressed or implied by such statements. Forward-lookingstatements should not be read as a guarantee of future performance orresults and will not necessarily be an accurate indication of whetheror 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 testresults, mineral reserves and resources and metallurgical recoveries,mining operation and development risks relating to the parties whichproduce the metals and minerals Star Royalties will purchase or fromwhich it will receive royalty payments, carbon pricing and carbon taxlegislation and regulations, risks inherent to the development of theESG-related investments and the creation, marketability and sale ofcarbon offset credits by the parties, the potential value of mandatoryand voluntary carbon markets and carbon offset credits, includingcarbon offsets, the carbon credits to be provided by NativState, risksrelated to the IFM projects, changes in legislation and policiesincluding affects related to the ACR, 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, changes in crop yields and resulting financial marginsregulatory restrictions, activities by governmental authorities(including changes in taxation), currency fluctuations, the global,federal and provincial social and economic climate in particular withrespect to addressing and reducing global warming, natural disastersand global pandemics, economic and geopolitical uncertainty related totariffs dilution, risk inherent to any capital financing transactions,risks inherent to a possible Green Star go-public transaction, thenature of the governance rights between Star Royalties, Cenovus EnergyInc. and Agnico Eagle Mines Ltd. in the operation and management ofGreen Star and competition, the ability to raise any additional fundsinto Green Star. 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.

Neither TSX Venture Exchange nor its RegulationServices Provider accepts responsibility for the adequacy or accuracyof this release.

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