The company is focused on underwriting bespoke royalties and streams with the intent of optimising its counterparties’ risk-adjusted cost of capital while allowing Star Royalties to achieve above-threshold returns. Management, as capital allocators, constantly reviews new opportunities to sustainably and responsibly grow Star Royalties’ portfolio with a strict emphasis on:
- Value and quality over quantity
- Risk management with focus on top-tier jurisdictions
- After-tax internal rate of return metrics
- Relative return on invested capital
- Free cash flow per share accretion
- Net asset value per share accretion
While Star Royalties continues to target a long-term 80% capital allocation to precious metals, it has been committed to funding sustainable environmental solutions for a carbon neutral economy since its inception and continues to view ESG-related investments as a highly scalable business model with attractive returns. As a result, the remaining 20% of capital is reserved for green investments, which currently includes the development of carbon offset credit projects (biosequestration and renewable energies), green technology opportunities (diesel usage displacement) and battery metals investments (copper, nickel, lithium).
This unique green strategy positions Star Royalties to be carbon negative by 2023, by more than offsetting the Company’s direct CO2 emissions from corporate activities and attributable CO2 emissions sourced from its gold equivalent ounces.
The company believes that abiding by these portfolio constructs will result in a robust, cash flowing, carbon-negative portfolio that will provide attractive risk-adjusted returns to its shareholders.