Royalties & Streams
Our investment approach aims to provide investors with leverage to carbon prices and precious metals, combined with upside from expansion, optimization, and exploration activities. The royalty model accomplishes this without the direct risk of operating cost inflation, exploration and capital expenditures, and logistical requirements of managing an operation.
Royalties
In exchange for an initial payment, Star Royalties is given the right to receive a percentage of revenue, profit or value of commodity produced from an operation. We own various types of royalties, including:
Gross Revenue (GR) Royalty: A defined percentage of the gross value, revenue or proceeds from an operation, without deductions of any kind.
Net Smelter Return (NSR) Royalty: A defined percentage of the gross revenue from a resource extraction operation, less a proportionate share of incidental transportation, insurance, refining and smelting costs.
Streams
In exchange for an initial payment, Star Royalties is given the right to purchase all or a predetermined amount or percentage of future production generated from an operation, at a predetermined below-market price. Streaming transactions typically represent larger investment opportunities than royalty transactions generally, which offers greater flexibility in the negotiation of terms and conditions, and generally offers both Star Royalties and its counterparties with tax advantages.
Benefits of the Royalty and Streaming Business Model
The Star Royalties approach is intended to provide investors with commodity price leverage, expansion, optimization, and exploration upside, without the direct risk of operating cost inflation, exploration and capital expenditures, and logistical requirements of managing an operation.
Once established, the royalty and streaming business model also benefits from greater risk diversification than is typical for larger operating companies. Royalty and streaming companies tend to own large portfolios 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 mines and mineral deposits, carbon credit project types, operators and jurisdictions.