Portfolio Construction
Star Royalties is unique in that we provide investors exposure to both precious metals and carbon credit pricing. While both segments share an emphasis on Tier 1 jurisdictions with low geopolitical risk, we believe the diversification of two different asset classes lowers our overall risk profile and our cost of capital.
Star Royalties
We are focused on creating bespoke royalties and streams with the intent of optimizing our counterparties’ cost of capital and allowing us to achieve above-threshold returns. Our management team, 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 Tier 1 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 we continue to have a long-term focus on precious metals, we have been committed to funding sustainable environmental solutions for a carbon neutral economy since inception. As a result, we continue to view ESG-related investments as a highly scalable business model with attractive returns. In late 2021, we created a separate corporate entity, Green Star Royalties, to address the overwhelmingly positive response to our innovative green royalty model, the numerous origination opportunities, and the superior potential returns. Green Star Royalties was created with the sole purpose of accelerating our green portfolio and leveraging our first-mover advantage in the carbon credit royalty space.
Green Star Royalties
Green Star Royalties prioritizes North American investments that fund nature-based carbon credit projects (agriculture and forestry) and green technology opportunities (diesel usage displacement).
This unique green strategy will enable Green Star Royalties to take delivery of carbon credits, and allow Star Royalties to be carbon negative by more than offsetting the Company’s direct CO2 emissions from corporate activities and our attributable CO2 emissions sourced from our precious metals portfolio.
We believe that abiding by these portfolio constructs will result in a robust, cash flowing, carbon negative portfolio that will provide attractive risk-adjusted returns to our shareholders.