This company kicked it into sport mode

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Star Royalties Announces Strategic Investment by Cenovus Energy into Green Star Royalties

Star Royalties is not in Wingman’s public portfolio, but it is in the cockpit of Wingman’s personal holdings. Notable is still in the red, but much less so after yesterday’s press release.

This little powerhouse will now have Agnico Eagle, a major gold company, and Cenovus Energy, a major energy company, as key shareholders in their soon-to-be spin-off, Green Star Royalties.

As governments worldwide aim and implement incentives to reach their net-zero goals, companies and investors are positioning themselves for this change. The fact is, mining and energy companies can never eliminate their carbon emissions from the operational level, but they can offset them.

And that is where $STRR comes in, and where companies like these see value. It is a huge vote of confidence having these two large companies vet the carbon credits Green Star is investing in.

So what did Cenovus Energy pay for 25.9% of Green Star?

Shoutout to @GreenMantis on ceo.ca for laying out the math on the $STRR board. You can go read the thread if you need to blow up the image further.

Essentially, Cenovus Energy, with an investment of C$21.2 million, is willing to pay $1.50 per share of Green Star Royalties.

We won’t get into all of what $STRR has in its portfolio, but the value of their Green Star shares according to the recent deal would be about C$37.5 million. The current market cap, even after yesterday’s incredible 61.4% gain is C$26.6 million.

Kodiak’s First Holes at South Zone Extend Copper Mineralization to Mid Zone and to Depth: 0.32% CuEq over 234 m from Surface Within 0.17% CuEq over 1053 m

Some of the selected highlights in the press release:

• Kodiak's first two drill holes at the South Zone have significantly extended porphyry mineralization and linked historic shallow copper at the South and Mid Zones with a near continuous mineralized intercept in new drilling.

• Drill hole AXE-23-014 at the South Zone intersected 0.32% CuEq* over 234 metres from bedrock surface, within a broader zone of 0.17% CuEq* over 1053 metres, extending from 9 to 1062 metres downhole.

• Holes AXE-23-012 and 014 confirmed copper mineralization along 900 metres of strike and from surface to over 775 metres depth.

• Kodiak's 2023 exploration program is now complete. 18,562 metres in 33 holes were drilled and the Company will provide further results from drilling as well as from 3D IP, soil sampling and prospecting over the upcoming months.

Hot Chili Materially Improves Option Terms for Costa Fuego Coastal Copper Hub in Chile

Hot Chili has made rather significant changes to its option agreements for acquiring land for the Costa Fuego Copper-Gold Project in Chile. Here's the breakdown:

Old Option Agreements:

• There were three separate options set to expire in 2024 for acquiring specific landholdings.

• Each option required substantial payments totaling US$11 million in 2024.

• Hot Chili had a subsidiary, Frontera, with the right to earn a 90% interest in these landholdings by making these payments.

New Option Agreement (El Fuego Option):

• The three old options have been terminated and replaced with a single new option called the El Fuego Option, which is now exercisable in September 2026.

• The new option significantly reduces the payments due in 2024 from US$11 million to US$1 million.

• Hot Chili's ownership increases from 90% to 100% if they exercise the option.

• The option expiry is extended from 2024 to 2026, with aggregate payments of US$4.3 million over the next three years, including the $1 million mentioned above.

Conditions if the New Option Agreement is Not Abandoned:

• Additional payment of US$2,000,000, if the copper price average US$ 5.00/lb or above for a period of 12 consecutive months, within a period that expires January 1^st 2030.

• Additional payment US$2,000,000, if an independently estimated Mineral Resource contains 200 million tonnes or greater within the El Fuego landholdings, within a period that expires January 1^st 2030.

At first glance, this looks amazing but also a little fishy. Why would the landholders agree to terminate option agreements totalling US$11 million and settle for significantly less over a longer period of time?

What is strange is that the stock went down on this news, which is clearly better than the previous option agreements.

Something we noticed is that they did include this statement in the press release.

If anyone has an explanation, please direct message @Wingman on CEO.ca. While this stock appears to be a compelling copper investment, we have not yet decided to take a position.

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