Royalties & Streams
Our investment approach aims to provide investors with leverage to carbon credit prices, as well as upside from project expansion, optimization, and additional carbon reduction potential. The royalty model accomplishes this without the direct risk of operating cost inflation, capital expenditures, and logistical requirements of managing a project.
Royalties
In exchange for an initial payment, Green Star Royalties is given the right to receive a percentage of revenue, or value of carbon reduced by a project. We own various types of royalties, including:
Gross Revenue (GR) Royalty: A defined percentage of the gross value, revenue or proceeds from a project, without deductions of any kind.
Proceeds Sharing Royalty: A defined percentage of the net proceeds from a project, following the deduction of certain project-specific and carbon registry-related costs.
Streams
In exchange for an initial payment, Green Star Royalties is given the right to purchase a predetermined amount or percentage of future carbon credits generated from a project, at a predetermined below-market price.
Benefits of the Royalty and Streaming Business Model
Once established, the royalty and streaming business model benefits from a greater risk diversification than is typical for larger operating companies. Royalty and streaming companies tend to own a large portfolio of assets diversified by operation, counterparty, jurisdiction, and commodity, whereas operating companies are commonly dependent on only one or a few key projects. As we continue to grow, our goal as a diversified royalty and streaming company is to act as a managed exchange-traded investment fund, with the portfolio having exposure to multiple carbon offset project types, operators, carbon registries and jurisdictions.