The Prospector News

Kerr Mines and Star Royalties Close US$18 Million Project Financing for Restart of the Copperstone Gold Mine

You have opened a direct link to the current edition PDF

Open PDF Close

Share this news article






Kerr Mines Inc. (TSX: KER) (OTC: KERMF)  and Star Royalties Ltd. are very pleased to jointly announce the closing of the first installment of their previously announced US$18,000,000 gold purchase and sale agreement which will be used to finance the restart of underground operations and gold production at the Copperstone Gold Mine in Arizona, USA.


Giulio T. Bonifacio, Chief Executive Officer of Kerr, stated: “We are excited to enter this new chapter for Kerr Mines with the closing of this first installment of the Copperstone stream financing. We look forward to working with Star Royalties to expeditiously restart operations at our flagship asset. Our focus now shifts to securing long term lead items, finalizing the process facilities to accommodate our whole ore leach approach, and sourcing underground contractors and equipment.”


Alex Pernin, Chief Executive Officer of Star Royalties, commented: “Following our comprehensive due diligence process, we have great confidence in both Copperstone’s potential and Kerr’s ability to execute a successful restart of operations. We look forward to working closely with their team as we transition Copperstone into Arizona’s next gold producing mine.”


The US$18 million advance payment under the Streaming Agreement will be provided in three equal installments, with the first US$6 million installment having now been advanced. The remaining two tranches will be advanced at the request of Kerr as it incurs expenditures for the restart of Copperstone, with a further US$6 million payable on or before February 28, 2021 and the final US$6 million payable on or before April 30, 2021.


Summary of 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 average London Bullion Market Association gold spot price for the five consecutive trading days prior to delivery. The Company has granted security over all of its assets to Star to secured the obligation of the Company to Star under the Streaming Agreement;
  • In connection with the advance of the first tranche of US$6 million, Kerr repaid in full the US$2 million convertible promissory note held by Sprott Private Resource Lending (Collector) LP. This repayment resulted in Sprott not exercising its conversion rights at CAD$0.13 for US$500,000 and CAD$0.16 for US$1.5 million, avoiding dilution to Kerr shareholders.


In connection with the closing of the Streaming Agreement, Kerr, Trans Oceanic Minerals Company Ltd. and Braydon Capital Corporation amended certain terms and conditions of the outstanding debt held by TOMCL and Braydon. In particular, the parties agreed as follows:


  • The maturity dates of outstanding promissory notes held by Braydon and TOMCL in the aggregate principal amount of approximately US$9.3 million were extended from August 22, 2021 to December 31, 2023;
  • The rate of interest payable on the principal of the notes was 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 TOMCL, were 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 of CAD$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 exceeds CAD$0.30 for twenty consecutive trading days; and
  • Kerr also agreed to make prepayments against the principal of the notes by way of preferential payments, in certain circumstances.


About Kerr Mines Inc.


Kerr Mines is an emerging American gold producer advancing the restart of production at its 100-per-cent-owned, fully permitted past-producing Copperstone mine project, located in mining-friendly Arizona. The Copperstone mine project demonstrates significant upside exploration potential that has yet to be drilled within a 50 square-kilometre (12,258 acres) land package that includes past production of over 500,000 ounces of gold by way of an open-pit operation. The company’s current focus is on maximizing Copperstone’s potential by defining and expanding current resources and further optimizing the mine’s economics for purposes of the restart of production in 2021.


About Star Royalties Ltd.


Star Royalties Ltd. is a growth-oriented, precious metals-focused royalty and streaming company. We pursue high-quality cash flow generation and shareholder value creation through the origination and acquisition of royalties and streams. By specializing in custom-made and operator-friendly financing solutions, our objective is to be uniquely aligned with our counterparties and to provide our investors with leverage to rising precious metal prices. We aim to become the preferred mine financing partner for producers, developers and explorers.

Posted November 23, 2020

Share this news article


Kootenay Intercepts 1,186 GPT Silver Over 4.6 Meters Within 112 GPT Silver Over 70.5 Meters at Columba Project, Mexico

Kootenay Silver Inc. (TSX-V: KTN) is pleased to announce assay re... READ MORE

January 20, 2021

Canadian Government Makes Joint $10 Million Investment in Cobalt Refinery Adjoining the Teledyne and Glencore Bucke Property

Fuse Cobalt Inc. (TSX-V: FUSE), (OTC: FUSEF), (FRA: 43W3) is ple... READ MORE

January 20, 2021

Compass Identifies a Wide Zone of Gold Mineralization Over 1.1-km Within the 10-km Tarabala Trend

Compass Gold Corp. (TSX-V: CVB) is pleased to provide an update o... READ MORE

January 20, 2021

Great Bear Releases Seven Additional Near-Surface Drill Holes Including 10.01 g/t Gold Over 34.85 m, and 15.68 g/t Gold Over 11.75 m at LP Fault

Great Bear Resources Ltd. (TSX-V: GBR) (OTCQX: GTBAF) reported r... READ MORE

January 20, 2021

Kincora intersects further shallow mineralization at Trundle

Part assay results for holes TRDD011 and TRDD012 at the Trundle P... READ MORE

January 20, 2021

Copyright 2021 The Prospector News