Star Royalties Ltd (TSX-V:STRR)
Shares Issued 71,080,837
Last Close 4/29/2021 $0.52
Friday April 30 2021 - News Release
Mr. Alex Pernin reports
STAR ROYALTIES PROVIDES UPDATE ON COPPERSTONE GOLD STREAM
Star Royalties Ltd. has provided an update on its previously announced $18-million (U.S.) gold purchase and sale agreement with Arizona Gold Corp. (formerly Kerr Mines Inc.) which will be used to finance the restart of underground operations and gold production at the Copperstone gold mine in Arizona, United States.
Restart activities
As previously disclosed by Arizona Gold, Copperstone remains on track for operational restart in Q4 2021 and first gold production in Q1 2022. Arizona Gold is currently focused on securing long-term lead items, recruiting key personnel, finalizing detailed engineering for the mine and mill, and sourcing underground mining contractors and equipment.
- Final engineering: Arizona Gold has secured several key mining consultants and is finalizing details to prepare for operational restart. Underground mining-related continuing work includes final recommendations in the areas of backfill design, geotechnical, ventilation, water management and electrical infrastructure.
- Backfill and ground control: Preliminary conclusions from geotechnical studies have indicated the opportunity for wider mining widths than originally contemplated by Arizona Gold. In addition, preliminary results from backfill testing support utilization of a partially cemented rock backfill process. Arizona Gold has stated that it believes that these conclusions have the potential to enhance previously estimated production efficiencies.
- Mine engineering: Final mine design and schedules are being prepared in advance of the forthcoming reserve update and ramp-up to full mine production. Considerations in the design and schedule include optimizing work flows and implementing newly identified advantages related to ore sequencing, production efficiencies, haul profiles and advancement of utilities, including ventilation.
- Mine operations: Arizona Gold has initiated preproduction mine ground support rehabilitation and will soon begin stope definition drilling, which is a requirement for detailed final gold ore stope designs. Arizona Gold is in final preparations to engage an experienced underground mine contractor.
- Mineral processing plant: Work completed in concert with Hanlon Engineering, Arizona Gold's EPCM (engineering, procurement and construction management) contractor, includes final layout and design of the new whole ore leach gold processing plant. Arizona Gold has completed final costing for the rehabilitation of the existing mineral processing facility's crush and grind circuit. Final metallurgical testing to optimize grind size, leach kinetics and reagent consumption is nearly complete. In addition, work has begun to remove the original flotation circuit, clearing the way for the forthcoming installation of the new WOL circuit, including a gold dore room.
Drilling program
Arizona Gold announced on April 27, 2021, the completion of its underground core hole drilling program, having successfully tested the continuity of near-infrastructure mineralization in various previously defined mineral domains and previously planned stopes. The core drilling was done in the C and D zones. Preliminary indications confirm mineralization as previously modelled while demonstrating continuity and extension of currently defined mineralized domains.
Recent drilling highlights include (the dates noted below refer to the dates of the applicable Arizona Gold news releases):
- AZG-21-P3C-06C (April 27, 2021): 10.8 metres at 8.2 grams per tonne gold, including 0.7 m at 49.1 g/t Au.
- AZG 21-P3A-02C (April 27, 2021): 2.3 m at 10.6 g/t Au, including 0.8 m at 19 g/t Au.
- AZG-21-13-12 (April 7, 2021): 1.5 m at 22.07 g/t Au, and 1.2 m at 11.73 g/t Au.
- AZG-20S-23 (April 7, 2021): 15.2 m at 3.27 g/t Au, including 6.1 m at 6.02 g/t Au.
- AZG-21-13-07 (March 10, 2021): 1.8 m at 43.97 g/t Au, and 1.5 m at 2.64 g/t Au.
- AZG-21-21-24 (March 10, 2021): three m at 18.73 g/t Au, including 1.5 m at 26.93 g/t Au.
Reverse circulation close-spaced in-fill drilling is expected to commence in May in order to provide detailed information for stope mining design. Arizona Gold has stated that it expects to provide an updated resource estimate in Q2 2021, which will also include drilling results from its 5,000-metre drilling program in 2019.
Copperstone gold stream final instalment
The $18-million (U.S.) advance payment under the streaming agreement is being provided in three equal instalments, with the first two $6-million (U.S.) instalments having now been advanced. As describedve, these first two instalments, totalling $12-million (U.S.), are being allocated by Arizona Gold to advance detailed engineering, secure long-term lead equipment, perform preoperational mining activities and to prepare the plant area for the installation of the new WOL processing equipment. Given the current spending profile, which remains back-end weighted, Star Royalties and Arizona Gold have agreed to revise the final $6-million (U.S.) instalment to be payable on or before June 30, 2021, (previously April 30, 2021) subject to certain closing conditions.
Alex Pernin, chief executive officer of Star Royalties, commented: "We are pleased with Arizona Gold's prudent capital allocation of our stream financing thus far and are encouraged with Arizona Gold's restart activities and drilling program results announced to date. Copperstone remains on schedule and on budget for first gold production in Q1 2022. The Copperstone gold stream continues to represent significant, near-term cash flow for Star Royalties from a highly prospective deposit in a world-class jurisdiction."
About Star Royalties Ltd.
Star Royalties is a precious metals royalty and streaming investment company. The company's objective is to provide wealth creation through accretive transaction structuring and asset life extension with superior alignment to both counterparties and shareholders. With a strategy to also invest in green opportunities, Star Royalties pioneered one of the first forest carbon offset credit royalties and is pursuing a pipeline of additional green investments.
We seek Safe Harbor.