Stock Symbol: TSX: DIAM
- 3,005 DIAMONDS WEIGHING 131.82 CARATS RECOVERED
- INCLUDING 2.69, 2.03 and 1.26 CARAT STONES
- RESULTS CONTINUE TO SUGGEST RIO TINTO CANADA'S UNPROVEN METHODOLGIES CAUSING UNDUE
DIAMOND BREAKAGE
SASKATOON, SK, Oct. 14, 2020 /CNW/ - Star Diamond
Corporation ("Star Diamond" or the "Corporation") today announced
that a total of 3,005 diamonds weighing 131.82 carats have been
recovered to date from the fourth bulk sample trench (19FALCT010)
of ten excavated on the Star Kimberlite by Rio Tinto Exploration
Canada Inc. ("Rio Tinto Canada") in 2019 (see news releases dated
June 3, and October 8, 2019).
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"The promising results from the most recent bulk sampling
program continue to confirm our belief that the Star-Orion South
project has excellent geology with large and contiguous
diamond-bearing kimberlites with a high proportion of valuable Type
IIa stones, as well as potential for large stones," said
Ken MacNeill, President and CEO of
Star Diamond. "We are encouraged by
the consistency of the initial results among all four bulk samples
processed to date, their similarity to historical drilling, and
their consistency with the grades outlined in our Preliminary
Economic Analysis ("PEA")."
Mr. MacNeill continued, "The results to date continue to
validate our belief in the significant economic merit of the
Star-Orion South project. However, these results also continue to
reinforce our belief that Rio Tinto Canada's extraction and diamond
recovery methodologies, including its use of unproven civil
engineering trenching technologies to conduct bulk sampling of
Kimberlite, is causing undue diamond breakage, resulting in
significant unnecessary cost overruns and materially damaging
Star Diamond's interest in the
project. Star Diamond continues to
vigorously pursue the litigation it previously commenced against
Rio Tinto Canada related to the project, and is committed to taking
all actions necessary to protect Star
Diamond and its shareholders from the practices and conduct
of Rio Tinto Canada including if necessary by seeking to remove Rio
Tinto Canada from the project."
The PEA (see news release dated April 16,
2018) estimates that 66 million carats of diamonds could be
recovered in a surface mine over a 38-year Project life, with a Net
Present Value ("NPV") (7%) of $2.0
billion after tax, an Internal Rate of Return ("IRR") of 19%
and an after-tax payback period of 3.4 years after the commencement
of diamond production.
The breakdown of the kimberlite intercepted, and diamonds
recovered to date from trench 19FALCT010, are detailed in Table 1
below. The preliminary results from the first three bulk
sample trenches were previously disclosed by Star Diamond on August 4,
2020, August 20, 2020 and
September 21, 2020.
The average diamond grades from the first four trenches are
similar to historical diamond grade results detected from the
underground bulk sampling and large diameter drilling ("LDD")
completed on the Star Kimberlite between 2004 and 2009. These
results are also similar to the overall weighted average grade (14
cpht) reported in Star Diamond's PEA
of the Star and Orion South kimberlites (the "Project").
The three largest diamonds recovered to date from 19FALCT010 are
2.69, 2.03 and 1.26 carats, respectively, and were all recovered
from Early Joli Fou ("EJF") kimberlite. The EJF is the dominant
kimberlite unit within the Project in terms of ore volume and
diamond grade.
As disclosed by Star Diamond on
August 4, 2020, there are indications
that recent diamond breakage has occurred in the diamond parcels
recovered thus far from Rio Tinto Canada's trench cutter bulk
sampling program, suggesting that the extraction and/or processing
systems being used by Rio Tinto Canada may be resulting in diamond
breakage. Comprehensive diamond breakage studies are required to
assess the nature, extent and potential causes of the diamond
breakage, and the possibility that larger diamonds would have been
recovered absent such breakage.
To date, kimberlite material from eight trenches (19FALCT001,
19FALCT004, 19FALCT003, 19FALCT010, 19FALCT008, 19FALCT009,
19FALCT005 and 19FALCT002) has been processed by Rio Tinto Canada
through the on-site Bulk Sample Plant (the "BSP"), with
concentrates forwarded to the Saskatchewan Research Council ("SRC")
for diamond recovery and reporting. Currently, only the initial
diamond results for the first four trenches have been reported by
the SRC.
Table 1. Initial diamond stone and grade results provided for
each kimberlite type sampled in Trench 19FALCT010
Kimberlite1
Type
|
Kimberlite
Intercept
(metres)
|
Drilled2
Tonnes
|
Carats3
(+1
DTC)
|
Grade4
(cpht)
|
Stones
(+1
DTC)
|
Stones
per
tonne
(+1
DTC)
|
Largest
Stone
(ct)
|
URVKU
|
123.00-129.60
|
61.99
|
0.10
|
0.16
|
5
|
0.08
|
0.02
|
LJF
|
129.60-135.80
|
55.70
|
0.41
|
0.73
|
16
|
0.29
|
0.07
|
EJF
|
135.80-227.20
|
989.88
|
127.74
|
12.90
|
2,901
|
2.93
|
2.69
|
CPK
|
227.20-233.00
|
71.85
|
3.57
|
4.97
|
83
|
1.16
|
0.81
|
Total
|
110.00
|
1,179.42
|
131.82
|
|
3,005
|
|
|
Notes
- Kimberlite Types: URVKU Undifferentiated, reworked
volcaniclastic kimberlite units; LJF: Late Joli Fou Kimberlite;
EJF: Early Joli Fou Kimberlite; CPK Cantuar pyroclastic kimberlite.
The URVKU and the LJF were not included in the Star Diamond PEA
mineral resource estimate
- The excavated tonnes are calculated using theoretical trench
volumes and core pilot hole dry densities provided by Rio Tinto
Canada. These are equivalent to dry tonnes
- Commercial diamonds are defined as diamonds that will not pass
through a +1 DTC screen, which has round apertures of 1.09
millimetres
- cpht: diamond grade in carats per hundred tonnes
Diamond results reported in this news release are based on
diamond recovery processing conducted by SRC's Geoanalytical
Laboratories Diamond Services located in Saskatoon, Saskatchewan. Primary recovery
processing consisted of X-ray transmission (XRT) sorting, magnetic
separation and grease table recovery methods. SRC is an independent
mineral processing facility which is accredited to the ISO/IEC
17025:2017 standard by the Standards Council of Canada as a testing laboratory for specific
tests.
The Company also announces that Mr. George Read has assumed the title of Senior
Technical Advisor to the Company. Mr. Read will continue to fully
support the Company with his considerable expertise and will
continue to prepare technical information for the Company as a
"Qualified Person" under the definition
of NI 43-101.
About Star Diamond Corporation
Star Diamond Corporation is a Canadian based corporation engaged
in the acquisition, exploration and development of mineral
properties. Shares of the Corporation trade on the Toronto Stock
Exchange under the trading symbol "DIAM". The Corporation's Fort à
la Corne kimberlites (including the Star - Orion South Diamond
Project) are located in central Saskatchewan in close proximity to established
infrastructure, including paved highways and the electrical power
grid, which provide significant advantages for future mine
development. During 2018, the Corporation announced the positive
results of an independent PEA on the Project. The PEA estimates
that 66 million carats of diamonds could be recovered in a surface
mine over a 38-year Project life, with a Net Present Value ("NPV")
(7%) of $2.0 billion after tax, an
Internal Rate of Return ("IRR") of 19% and an after-tax payback
period of 3.4 years after the commencement of diamond production
(see news release dated April 16,
2018).
All technical information in this press release has been
prepared under the supervision of George
Read, Senior Technical Advisor, a registered Professional
Geoscientist in the Provinces of Saskatchewan and British Columbia and Mark Shimell, Project Manager, a registered
Professional Geoscientist in the Province of Saskatchewan, who are the Corporation's
"Qualified Persons" under the definition of NI 43-101.
Caution Regarding Forward-Looking Statements
This news release contains forward-looking statements as defined
by certain securities laws, including the "safe harbour" provisions
of Canadian securities legislation and the United States Private
Securities Litigation Reform Act of 1995. Forward-looking
information is often, but not always, identified by the use of
words such as "anticipate", "believe", "expect", "plan", "intend",
"forecast", "target", "project", "guidance", "may", "will",
"should", "could", "estimate", "predict" or similar words
suggesting future outcomes or language suggesting an outlook. In
particular, statements regarding the Corporation's future
operations, future exploration and development activities or other
development plans constitute forward-looking statements. By their
nature, statements referring to mineral reserves, mineral resources
or PEA constitute forward-looking statements. Forward-looking
statements contained or implied in this press release include, but
are not limited to, the Corporation's expectations regarding the
processing and analysis of, and reporting of results from, the bulk
samples previously collected by Rio Tinto Canada and the
timeline for doing so, and disclosures regarding the economics and
project parameters presented in the PEA.
These forward-looking statements are based on the Corporation's
current beliefs as well as assumptions made by and
information currently available to it and involve inherent
risks and uncertainties, both general and specific.
Risks exist that forward-looking statements will not be achieved
due to a number of factors including, but not limited to,
developments in world diamond markets, changes in diamond prices,
risks relating to fluctuations in the Canadian dollar and other
currencies relative to the US dollar, changes in exploration,
development or mining plans due to exploration results and changing
budget priorities of Rio Tinto Canada or the Corporation, risks
related to the legal proceedings commenced by the Corporation
against Rio Tinto Canada, including the determination of the
Corporation's pending injunction application by the Court, the
effects of competition in the markets in which Star Diamond operates, the impact of the
COVID-19 pandemic, risks related to the operation of the BSP
and the processing methods being used by Rio Tinto Canada and the
effectiveness thereof, the impact of changes in the laws and
regulations regulating mining exploration, development, closure,
judicial or regulatory judgments and legal proceedings, operational
and infrastructure risks and the additional risks described in the
Corporation's most recently filed Annual Information Form, annual
and interim MD&A, news releases and technical reports. The
Corporation's anticipation of and success in managing the foregoing
risks could cause actual results to differ materially from what is
anticipated in such forward-looking statements.
Although management considers the assumptions contained in
forward-looking statements to be reasonable based on information
currently available to it, those assumptions may prove to be
incorrect. When making decisions with respect to the Corporation,
investors and others should not place undue reliance on these
statements and should carefully consider the foregoing factors and
other uncertainties and potential events. Unless required by
applicable securities law, the Corporation does not undertake to
update any forward-looking statement that is made herein.
SOURCE Star Diamond Corporation