Kerr Mines and Star Royalties reach an agreement over a £13.6 million stream ing deal

AMERICAS

Kerr Mines and Star Royalties reach an agreement over a £13.6 million streaming deal

The American gold producer Kerr Mines and the Canadian metals-focused royalty and streaming business Star Royalties jointly reported the implementation of a definitive gold purchase and selling arrangement (streaming agreement) of £ 13.6 million to fund the restart of underground activities and gold output at the Arizona Copperstone Gold Mine.

AAt the eventual closure, which is scheduled to take place on or before November 20, the first instalment of £ 4.5 million would be advanced. At Kerr's order, the other two tranches will be accelerated while costs for the restart of the Copperstone Gold Mine Project are incurred, with £ 4.5 million on or before 28 February 2021, and a further £ 4.5 million on or before next year's 30 April.

We assume that this streaming agreement further validates the importance we have defined at Copperstone through our recent enhancement activities with the extensive project assessment conducted by Star Royalty. We also notice that under a whole ore leach processing scenario, we will advance the restart of operations, resulting in improved gold recoveries and output against floata. As one of the primary transaction provisions of the deal, Star Royalty will buy from Kerr a volume of refined gold equivalent to 9.9% of the gold generated at Copperstone until a total of 21,000 ounces of refined gold is shipped, then 3.3% of the gold produced until a total of 27,200 ounces is delivered, and 1.2% of the gold produced afterwards for the remaining life of the mine. In addition, with any ounce of gold shipped equivalent to 25 percent of the average London Bullion Market Association gold spot price for five consecutive trading days prior to delivery, Star Royalty would provide Kerr with a cash payout.

"This Streaming Arrangement offers the requisite project finance to resume the development of gold at our Copperstone Gold Mine, which is scheduled for Q4-2021. We are very pleased to pursue this financing deal with Star Royalty, which has an experienced team of mining professionals who will prove to be a trusted collaborator as we transfer Copperstone to production," says Giulio T Bonifacio, We assume that this streaming

agreement further validates the impor12 | SKILLINGS MINING REVIEW January 2021 tance we have defined at Copperstone through our recent enhancement activities with the extensive project assessment conducted by Star Royalty. We also notice that under a whole ore leach processing scenario, we will advance the restart of operations, resulting in improved gold recoveries and output against floata.

As one of the primary transaction provisions of the deal, Star Royalty will buy from Kerr a volume of refined gold equivalent to 9.9% of the gold generated at Copperstone until a total of 21,000 ounces of refined gold is shipped, then 3.3% of the gold produced until a total of 27,200 ounces is delivered, and 1.2% of the gold produced afterwards for the remaining life of the mine. In addition, with any ounce of gold shipped equivalent to 25 percent of the average London Bullion Market Association gold spot price for five consecutive trading days prior to delivery, Star Royalty would provide Kerr with a cash payout.

We are pleased to announce our Kerr collaboration transaction to promote the Copperstone restart. We have formed a mutually advantageous streaming deal that can convert into a win-win result for shareholders on both parties. This gold stream would generate substantial cash flow from an extremely prospective mine in a world-class jurisdiction in the short term. We look forward to the successful restart at Copperstone and the upside of its discovery under the seasoned and competent management team of Kerr, says Alex Pernin, Star Royalties Chief Executive Officer.