The
Key Transaction Terms
- Star Royalties will purchase from Kerr an amount of refined gold equal to 9.9% of gold produced at Copperstone until a cumulative 21,000 ounces of refined gold are delivered, then 3.3% of gold produced until a cumulative 27,200 ounces are delivered, and 1.2% of gold produced thereafter for the remaining life of mine;
- In addition to the
US$18 million advance payment, Star Royalties will provide a cash payment to Kerr for each ounce of gold delivered equal to 25% of the averageLondon Bullion Market Association gold spot price for the five consecutive trading days prior to delivery; - The advance of the first tranche of
US$6 million is subject to Kerr repaying the outstandingUS$2 million convertible promissory note held bySprott Private Resource Lending (Collector) LP (“Sprott”) and customary closing conditions, including implementation of the requisite security package in favour of Star Royalties; and - As a result of the prepayment of
US$2 million convertible promissory note, Sprott will not be exercising its conversion rights atCAD$0.13 forUS$500,000 andCAD$0.16 forUS$1.5 million , avoiding dilution to Kerr shareholders.
In connection with the entering into of Streaming Agreement, Kerr,
- The maturity dates of outstanding promissory notes held by TOMCL and Braydon in the aggregate principal amount of approximately
US$9.3 million will each be extended fromAugust 22, 2021 toDecember 31, 2023 ; - The rate of interest payable on the principal of the notes will be increased from 8% to 10%, with interest payable quarterly starting on the commencement of commercial production;
- Two
CAD$1 million unconvertible promissory notes, one held by each of Braydon and TOCML, have been amended to include a conversion feature providing that the principal amount of the notes can be converted into common shares of Kerr at any time prior to maturity at a price ofCAD$0.16 per share, subject to Kerr having the right of early conversion in the event the volume-weighted average trading price of the common shares exceedsCAD$0.30 for twenty consecutive trading days; and - Kerr has also agreed to make prepayments against the principal of the notes by way of preferential payments, in certain circumstances.
The proposed amendments to the terms of the promissory notes constitute related party transactions within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holder in Special Transactions (“MI 61-101“) as TOMCL is owned by
About Star Royalties Ltd.
For more information on Star Royalties, please visit our website at starroyalties.com or contact:
Chief Executive Officer and Director | Chief Business Development Officer |
apernin@starroyalties.com | pbures@starroyalties.com |
+1 647 360 4793 | +1 437 997 8088 |
About Kerr
For further information please visit the
For further information contact:
gtbonifacio@kerrmines.com | mkostuik@kerrmines.com |
Cautionary Note Regarding Forward Looking Statements
Certain statements in this news release may constitute "forward-looking statements", including those regarding future market conditions for metals and minerals, the purchase and delivery of gold in connection with the Streaming Agreement, the payment of the first tranche, the second tranche and third tranche in connection with the Streaming Agreement, the entering into of a security package, the restart of Copperstone, the repayment of the Sprott loan and the prepayments against the principal of the notes by way of preferential payments, in certain circumstances. Forward-looking statements are statements that address or discuss activities, events or developments that Star Royalties and Kerr expect or anticipate may occur in the future. When used in this news release, words such as "estimates", "expects", "plans", "anticipates", "will", "believes", "intends" "should", "could", "may" and other similar terminology are intended to identify such forward-looking statements. Forward-looking statements are made based upon certain assumptions and other important factors that, if untrue, could cause the actual results, performances or achievements of Star Royalties or Kerr to be materially different from future results, performances or achievements expressed or implied by such statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results, performances or achievements to differ materially from such forward-looking statements, including, without limitation, changes in business plans and strategies, market conditions, share price, best use of available cash, the ability of Star Royalties to obtain required funds and identify and execute future acquisitions on acceptable terms or at all, risks inherent to royalty and streaming companies, title and permitting matters, metal and mineral commodity price volatility, discrepancies with respect to the estimated production of Copperstone, mineral reserves and resources and metallurgical recoveries, mining operation and development risks relating to the parties which produce the metals and minerals Star Royalties will purchase or receive payments from, regulatory restrictions, activities by governmental authorities (including changes in taxation), currency fluctuations, the global social and economic climate, natural disasters and global pandemics, dilution, and competition. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should exercise caution in relying upon forward-looking statements and neither Star Royalties nor Kerr undertakes any obligation to publicly revise them to reflect subsequent events or circumstances, except as required by law.
Source:
2020 GlobeNewswire, Inc., source