News

April 11, 2022

Green Star Royalties, Bluesource and Locus AG Announce Fourfold Expansion of Regenerative Agriculture Carbon Program

All amounts are in U.S. dollars unless otherwise indicated.

APRIL 11, 2022, TORONTO, ON – Star Royalties Ltd. (the “Company” or “Star Royalties”) (TSXV: STRR, OTCQX: STRFF), through its pure-green subsidiary, Green Star Royalties Ltd. (“Green Star Royalties”), is pleased to announce a fourfold expansion of its agreement with Blue Source, LLC (“Bluesource”), announced on December 13, 2021, to create premium, verified carbon offset credits that will reward the adoption of regenerative agriculture practices by North American farmers.

This amended agreement materially expands the CarbonNOW® carbon farming program that will further enable the Bluesource and Locus Agricultural Solutions® (“Locus AG”) partnership to incentivize regenerative agriculture practices on 1.32 million acres of farmland.

Green Star Royalties and Bluesource expect the expanded program to start generating credits for the 2023 growing season, with Locus AG beginning farmer enrollment within the coming months. The enlarged program is expected to generate over 2 million premium carbon offset credits per annum on average, which will be available for sale in the voluntary carbon marketplace. This program has been financed by Green Star Royalties, with Bluesource executing carbon offset development and sales.

Regenerative Agriculture Program Highlights

  • Sustainable farming: This initiative aims to finance and accelerate the transition of North American farmers to sustainable farming practices that will improve soil health and accelerate atmospheric CO2 removal and sequestration into soils.
  • Innovative, aligned benefit structure: Pioneered by Green Star Royalties and Bluesource, this novel approach, in partnership with grower-facing organizations such as Locus AG, enables farmers to participate in the carbon credit market, maximizing benefits and alignment to all program participants.
  • Premium credits in a low-risk jurisdiction: Providing carbon finance to growers across the United States to create premium regenerative agriculture carbon offset credits for the voluntary carbon markets.
  • Material increase in scope: Project expansion from 320,000 to 1.32 million acres reflects strong grower enrollment.
  • Originating carbon offset credits: Green Star Royalties anticipates generating annual cash flow equivalent to approximately 400,000 carbon offset credits from the expanded project (100,000 previously).
  • Preferred partnership drives growth: Green Star Royalties and Bluesource look to finance progressively larger regenerative agriculture projects with further potential of over one billion acres of additional prospective farmland in the United States and in Canada.
  • Highly reputable partner: Bluesource is North America’s leading carbon offset developer and marketer, with a proven track record spanning over 21 years in developing and monetizing nature-based carbon offset projects.

Alex Pernin, Chief Executive Officer of Star Royalties, commented: “We are thrilled to deepen our partnership with Bluesource and Locus AG in tackling climate change through regenerative agriculture practices. Just over four months have passed since we established this partnership and we are now more than quadrupling this investment in response to strong demand from U.S. farmers to participate in the CarbonNOW carbon farming program. Our teams are jointly passionate about financing a greener future. We are demonstrating the application of our royalty investment model as an innovative solution to financing the transition of U.S. farmers to regenerative agriculture, and in turn, to originating premium carbon offset credits. The expansion of the project reflects our first-mover advantage in a novel and highly scalable business model, and we look forward to funding significantly larger projects across the North American farming industry.”

Jamie MacKinnon, Executive Vice President of Bluesource, stated: “The early success of this program is due in large part to well-designed incentives for growers and an alignment amongst the program partners on maximizing the value retained by the grower as a means of attracting more acres into the program and creating scale. It is also due to the considerable resource that Bluesource and Locus AG are deploying to onboard and support growers.”

Chad Pawlak, Chief Executive Officer of Locus AG, said: “CarbonNOW provides unique economic, agronomic and environmental advantages that make it a highly attractive program for all parties. The financial incentives and high eligibility eliminate many farmer hesitations, while our carbon-accelerating soil health probiotics amplify farm and program performance. In the uncertainties of an ever-changing economy, we’ve built a carbon farming program that helps ensure a successful future for the agriculture industry and a lasting legacy for farmers.”

Transaction Terms

Green Star Royalties has agreed to finance a regenerative agriculture carbon offset program being developed and managed by Bluesource for an increased capital contribution of up to $20.6 million in cash. Cash will be made available to growers in this program through Locus AG’s CarbonNOW program. Locus AG will be actively recruiting growers under this project until a total of 1.32 million acres of farmland across the United Sates have been adopted into the program.

Green Star Royalties expects initial funding of the investment to commence in Q2 2022, with further quarterly tranches drawn by Bluesource, as required, until the entire $20.6 million is invested. Green Star Royalties currently expects $5 million will be invested in 2022 and the remainder in 2023.

This project investment has a term of 11.5 years and the future financial benefits derived from the monetization of the project’s carbon offset credits will be split between the CarbonNOW growers, Bluesource, and Green Star Royalties. The program expects to generate revenues from an average of over 2 million carbon offset credits per annum, starting in 2023. Green Star Royalties expects to generate cash flow equivalent to over 200,000 attributable carbon offset credits in 2024, and increasing to over 400,000 attributable carbon offset credits per annum starting in 2025.

Regenerative Agriculture

Regenerative agriculture is a wholesome conservation and rehabilitation approach to food and farming systems. The purpose of regenerative agriculture is to promote soil health regeneration and to rebuild soil organic matter while improving water management, reducing or eliminating nitrogen-based fertilizers, and increasing biodiversity. This can be done by implementing traditional practices such as no or low tillage and cover cropping, and accelerated through the use of Locus AG’s soil health probiotics. In addition to benefiting farmers and enhancing long-term soil health and crop performance, regenerative agriculture practices reverse climate change by sequestering significant additional amounts of atmospheric CO2 into soils than would have been released to the atmosphere by utilizing conventional farming practices. By accurately quantifying the amount of sequestered carbon into these farmlands, Bluesource is able to develop premium and verified carbon offset credits that are then sold to a variety of companies looking to voluntarily offset their CO2 emissions.

CarbonNOW Program

Locus AG’s CarbonNOW carbon farming program is built through a partnership with Bluesource and Green Star Royalties. The program has received rapid interest from U.S. farmers based on key differentiators from other carbon farming programs, including:

  • Upfront payments and guaranteed minimums
  • Performance bonuses that accrue for larger long-term payouts
  • Premium carbon credits and secure buyers
  • No program fees and full program management
  • High eligibility rates and access to carbon-accelerating technology

As high fuel and input prices continue to rise, the chance to maximize farm earnings is a selling point for farmers to join CarbonNOW. There are no costs involved in the carbon farming program other than the purchase of Locus AG’s soil probiotics. Use of these products results in higher return on investment per acre through better nutrient use efficiency and uptake, along with increases in crop yields, and improved carbon sequestration.

About Bluesource

As announced in 2022, Bluesource has merged with Element Markets to create the largest marketer and originator of carbon and environmental credits in North America and one of the largest in the world. The combination brings together Element Markets’ leading position in low carbon fuels and greenhouse gas markets with Bluesource’s expertise in nature-based solutions, project development, capital formation and advisory services to create a vertically integrated, climate-focused company that serves all sectors and geographies to accelerate the fight against climate change and environmental degradation. As it relates to regenerative agriculture, Bluesource partners with organizations in the ag supply chain to design, develop, and manage a carbon program to leverage the carbon opportunity for their network of growers. More information about the company is available at www.bluesource.com.

About Locus Agricultural Solutions®

Locus Agricultural Solutions® (Locus AG) is an agtech, certified B Corp™ and innovator member of the World Business Council for Sustainable Development that is helping to solve the interrelated challenges of climate change and food security. Its innovative microbial soil health probiotic technologies and globally recognized CarbonNOW® carbon farming program give farmers a new way to boost yields, profit and accelerate carbon sequestration while reducing operating costs and environmental impact. Locus AG gets its core scientific capabilities from its parent company, Locus Fermentation Solutions (Locus FS), an Ohio-based green technology company. For more information, visit LocusAG.com.


Locus AG: Award-Winning Microbial Soil Probiotics

Source: locusag.com

Carbon Offset Credits

The Paris Agreement was adopted by 196 nations and entered into force in 2016 with the purpose of reducing global greenhouse gas (“GHG”) emissions. Specifically, the Paris Agreement reaffirms the goal to limit global temperature increase to below 2°C above pre-industrial levels, with a secondary aggressive target of limiting that increase to 1.5°C. In order to achieve these levels, many governments have meaningfully increased their commitment in recent years to reducing GHG emissions, with over 100 countries and thousands of corporations having since committed to significantly reducing GHG emissions by 2030 and being carbon-neutral by 2050.

Carbon offsets are generated from any activity that either prevents or reduces carbon emissions (such as renewable energies or methane capture technology) or improves carbon sequestration (such as regenerative agriculture or reforestation and conservation of forested lands). Carbon offset credits are effectively a measurable net benefit from an activity versus the status quo. Their units are measured in tonnes of carbon dioxide equivalent, (“CO2e”), meaning one carbon offset credit is equal to one tonne of CO2e emission reduction, avoidance or removal.

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
+1 647 360 4793

Bluesource LLC
Jeanethe Falvey
Sr. Director, Communications & Marketing
jfalvey@bluesource.co
m+1 207 751 2583

Locus Agricultural Solutions
Teresa DeJohn
Director of Marketing & PR
tdejohn@locusfs.com
+1 440 561 0800 x117

ABOUT STAR ROYALTIES LTD.

Star Royalties Ltd. is a precious metals and carbon credit royalty and streaming company. The Company created the world’s first carbon negative gold royalty platform through its pure-green subsidiary, Green Star Royalties, and offers investors exposure to precious metals and carbon credit prices with an increasingly negative carbon footprint. The Company’s objective is to provide wealth creation by originating accretive transactions with superior alignment to both counterparties and shareholders.

Cautionary note regarding forward-looking information

Certain statements in this news release may constitute “forward-looking statements”, including those regarding the strategies and business plans of the Company. Forward-looking statements are statements that address or discuss activities, events or developments that the Company expects or anticipates 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 are intended to identify such forward-looking statements. Forward-looking statements are made based upon certain assumptions and other important factors that, if untrue, could cause the actual results, performances or achievements of Star Royalties to be materially different from future results, performances or achievements expressed or implied by such statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results, performances or achievements to differ materially from such forward-looking statements, including, without limitation, the ability of the parties to successfully implement the project, the ability to attract farmers into the project, the ability to achieve carbon credits from the project, changes in business plans and strategies, market conditions, share price, best use of available cash, the ability of the Company to identify and execute future acquisitions on acceptable terms or at all, risks inherent to royalty and streaming companies, title and permitting matters, metal and mineral commodity price volatility, discrepancies between actual and estimated production of carbon credits, and development risks relating to the parties which produce the carbon credits from the project, regulatory restrictions, activities by governmental authorities (including changes in taxation), currency fluctuations, the global social and economic climate, natural disasters and global pandemics, including COVID-19, dilution, and competition. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should exercise caution in relying upon forward-looking statements and the Company undertakes no obligation to publicly revise them to reflect subsequent events or circumstances, except as required by law.

Cautionary note regarding scientific and technical information