Green Star Royalties Acquires Portfolio of U.S. Forest Carbon Offset Royalties and Receives First Carbon Offset Delivery

TORONTO, ON / ACCESSWIRE / April 25, 2024 / Star Royalties Ltd. ("Star Royalties", or the "Company") (TSXV:STRR),(OTCQX:STRFF), through its joint venture, Green Star Royalties Ltd. ("Green Star"), is pleased to announce the execution of a definitive royalty agreement with NativState LLC ("NativState") to acquire several gross revenue royalties (each a "Royalty", and collectively, the "Royalties") on a carbon offset-issuing portfolio of Improved Forest Management ("IFM") projects in the southeastern United States. NativState is an Arkansas-based forest carbon project developer focused on aggregating small-to-medium forest landowners into IFM projects being developed under the American Carbon Registry ("ACR"). The Royalties are expected to deliver to Green Star premium voluntary carbon offsets over a 20-year period, with a total consideration for the Royalties of $5.6 million to be paid over a series of tranches. All amounts are in U.S. dollars unless otherwise indicated.

Investment Highlights

• Expansion of Green Star's North American nature-based portfolio: The Royalties on NativState's IFM projects complement and further diversify Green Star's existing portfolio of North American nature-based carbon offset solutions.
• First carbon offset-issuing royalty for Green Star: Project ACR 783 in Arkansas becomes Green Star's first carbon offset-issuing investment with approximately 180,000 carbon offsets expected to be delivered under the Royalty in 2024, inclusive of 120,000 carbon offsets at closing. Approximately 75% of Green Star's attributable carbon offsets from the Royalties are expected to be delivered in the first five years.
• Aligned and defensive royalty structure: Green Star and NativState have agreed to several defensive mechanisms, including minimum carbon offset volumes to be delivered over the 20-year royalty term.
• Multiple Royalties with strong investment metrics: The Royalties consist of a 20% Royalty on Project ACR 783 and 10% Royalties on an additional 60,000 acres across Arkansas, Louisiana, Mississippi, and Missouri, to be developed by NativState and registered as future ACR projects. At prevailing carbon offset prices, the Royalties are expected to provide significant net present value accretion and allow for an attractive payback period.
• Demand and pricing trends for premium North American carbon offsets are stable and rising: Premium North American nature-based carbon offsets remain in limited supply and in increasing demand. Current market pricing for these premium avoidance and removal carbon offsets is approximately $13-15/t CO₂e and over $20/t CO₂e, respectively.
• Partnership with rapidly growing carbon developer: NativState, with over 300,000 acres under management, is striving to become the largest U.S. aggregator of small-to-medium forest landowners. Green Star is proud to be building a long-term partnership with NativState by funding American forest landowners keen to participate in both IFM practices and voluntary carbon markets.

Alex Pernin, Chief Executive Officer of Star Royalties, commented: "We are proud to announce this multi-royalty investment in NativState's portfolio of high-integrity IFM projects in the southeastern United States. This thoughtful transaction transitions Green Star into free cash flow generation and provides desirable economic returns, while expanding and diversifying our existing premium North American portfolio."