Mr. Alex Pernin reports

STAR ROYALTIES ANNOUNCES COPPERSTONE STREAM RESTRUCTURING AND IMPROVED PROJECT ECONOMICS

Star Royalties Ltd. has entered into a non-binding agreement with Sabre Gold Mines Corp. to restructure the company's existing gold streaming agreement on the Copperstone gold mine. The proposed restructuring will revise the Copperstone gold stream from 6.6 per cent of gold produced with production-based step-downs to a flat 4 per cent of gold produced for the duration of Copperstone's life of mine (LOM) and additional consideration of $4.55-million being paid by Sabre Gold to Star Royalties in a combination of cash and shares. Under the terms of the streaming agreement, Star Royalties will continue to provide a cash payment to Sabre Gold equal to 25 per cent of the spot gold price for each ounce of gold delivered.

Transaction highlights:

• Stream revision: The company's gold stream on Copperstone will be revised from 6.6 per cent of gold produced (with a step-down to 2.2 per cent after 14,000 gold ounces have been delivered under the stream, and a further step-down to 0.8 per cent after 18,133 gold ounces have been delivered) to 4 per cent 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 Gold $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 by Victoria Gold Inc. to Sabre Gold of its second and third purchase price instalments for its purchase of Sabre Gold's interest in the Brewery Creek project and other certain mineral assets in Yukon, which closed on Sept. 14, 2023. The company will receive:
  • A first tranche of $2.55-million, consisting of $1.55-million in cash on closing of the stream restructuring, expected in October, 2023, and $1-million in Sabre Gold shares, equal to 7,407,407 shares based on a price of 13.5 cents per common share of Sabre Gold. As such, the company is expected to become a 9.4-per-cent shareholder of Sabre Gold;
  • A second tranche of $1.2-million in a combination of cash and shares of Victoria Gold (depending on how Victoria Gold elects to pay its second instalment on the Brewery Creek purchase), payable in September, 2024;
  • A third tranche of $800,000 in a combination of cash and shares of Victoria Gold (depending on how Victoria Gold elects to pay its third instalment on the Brewery Creek purchase), payable in September, 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 enhancing the company's financial position.
• Sabre Gold debt restructuring: Sabre Gold's debt position is expected to decline to $3.25-million from $13.2-million (includes $3-million in accrued interest forgiveness). The proposed terms also include the repurchase of an additional 1.5-per-cent royalty on the Copperstone mine for consideration of $1.25-million (U.S.). Postrestructuring, Sabre Gold is projected to have a cash balance in excess of $3.5-million.
• Enhanced project economics: The stream revision and royalty buyback are expected to improve Copperstone's project economics, where the company estimates an after-tax internal rate of return of 58 per cent postrestructuring at $1,800 (U.S.)/oz gold and cash costs of approximately $950 (U.S.)/oz. The restructuring will result in the fully permitted Copperstone having a more attractive 4.5-per-cent total royalty equivalent encumbrance which should enhance Sabre Gold's ability to finance 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 per cent 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 report preliminary economic assessment for the Copperstone project, La Paz county, Arizona, United States, prepared by Hard Rock Consulting LLC, dated Aug. 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.

Alex Pernin, chief executive officer of Star Royalties, commented: "After working closely with Sabre Gold management, we are pleased to have achieved a positive restructure of our Copperstone gold stream. Through this agreement, we will maintain increased exposure to Copperstone's future production profile and significant exploration potential, while converting a portion of its value into immediate and near-term cash and liquid securities. Importantly, we believe this new structure will provide improved flexibility for Sabre Gold to secure financing and advance Copperstone to production."

About Star Royalties Ltd.

Star Royalties is a precious metals and carbon credit royalty and streaming company. The company innovated the world's first carbon credit royalties in forestry and regenerative agriculture through its pure-green joint venture, Green Star Royalties Ltd., and offers investors exposure to precious metals and carbon credit prices. The company's objective is to provide wealth creation by originating accretive transactions with superior alignment to both counterparties and shareholders.

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