(via TheNewswire)
Transaction Highlights
Stream revision:The Company’s gold stream on Copperstone will be revised from 6.6% of gold produced(with a step-down to 2.2% after 14,000 gold ounces have been delivered under the stream, and a further step-down to 0.8% after 18,133 gold ounces have been delivered) to 4% of gold produced LOM. This proposed gold stream structure would simplify its overall terms, its expected cash flow profile, and would provide
Star Royalties with enhanced exposure to existing resource conversion and future exploration upside at Copperstone.Cash and shares consideration:As additional consideration for agreeing to the revised gold stream,
Star Royalties will receive from Sabre GoldC$4.55 million in a combination of cash and shares in three tranches. Payment of the second and third tranches will be timed so as to coincide with the payment byVictoria Gold Inc. (“Victoria Gold”) (TSX: VGCX) to Sabre Gold of its second and third purchase price installments for its purchase of Sabre Gold’s interest in theBrewery Creek Project and other certain mineral assets in theYukon , which closed onSeptember 14, 2023 . The Company will receive:A first tranche of
C$2.55 million , consisting ofC$1.55 million in cash on closing of the stream restructuring, expected inOctober 2023 , andC$1 million in Sabre Gold shares, equal to 7,407,407 shares based on a price ofC$0.135 per common share of Sabre Gold. As such, the Company is expected to become a 9.4% shareholder of Sabre Gold.A second tranche of
C$1.2 million in a combination of cash and shares of Victoria Gold (depending on how Victoria Gold elects to pay its second installment on the Brewery Creek purchase), payable inSeptember 2024 .A third tranche of
C$800,000 in a combination of cash and shares of Victoria Gold (depending on how Victoria Gold elects to pay its third installment on the Brewery Creek purchase), payable inSeptember 2025 .
Cash consideration improves the Company’s balance sheet:
Star Royalties will maintain a meaningful interest in Copperstone’s future gold production while converting a portion of its original gold stream value into cash and cash equivalents, thereby enhancingthe Company’s financial position.Sabre Gold debt restructuring:Sabre Gold’s debt position is expected to decline to
C$3.25M fromC$13.2M (includesC$3M in accrued interest forgiveness). The proposed terms also include the repurchase of an additional 1.5% royalty on the Copperstone mine for consideration ofUS$1.25M . Post restructuring, Sabre Gold is projected to have a cash balance in excess ofC$3.5M .Enhanced project economics:The stream revision and royalty buyback are expected to improve Copperstone’s project economics, where the Company estimates an after-tax IRR of 58% post-restructuring at
US$1,800 /oz gold and cash costs of~US$950 /oz. The restructuring will result in the fully-permitted Copperstone having a more attractive 4.5% total royalty equivalent encumbrance which should enhance Sabre Gold’s ability to fund project construction.Improved long-term optionality:The revised stream will be maintained across Copperstone’s entire LOM, providing meaningfully higher resource conversion and exploration upside exposure to the Company. Approximately 52% of the existing resource at Copperstone was not captured in Sabre Gold’s preliminary economic assessment announced on
June 20, 2023 and reflected in its National Instrument 43-101 Technical ReportPreliminary Economic Assessment for theCopperstone Project ,La Paz County, Arizona , USAprepared byHard Rock Consulting, LLC datedAugust 2, 2023 and filed on Sabre Gold’s profile on SEDAR+ on such date. The Copperstone deposit also remains open at depth with additional high-priority regional targets remaining to be tested.
CONTACT INFORMATION
For more information, please visit our website atstarroyalties.com or contact:
Chief Executive Officer and Director Vice President, Investor Relations
apernin@starroyalties.com dkushnir@starroyalties.com
+1 647 494 5001 +1 647 4945088
About
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this news release may constitute "forward-looking statements", including those regarding future market conditions for metals and minerals, future valuation of Victoria Gold, full permitting of Copperstone, the net cash position of Sabre Gold, the Company’s position in Copperstone’s future gold production, the net cash position of the Company, and future capital raising opportunities 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
A number of factors could cause actual results, performances or achievements to differ materially from such forward-looking statements, including, without limitation, changes in business plans and strategies, market and capital finance conditions, ongoing market disruptions caused by the
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