- RIO TINTO CANADA SAYS TEN
CUTTER HOLE BULK SAMPLE PROGRAM NOW SUCCESSFULLY COMPLETED
- RIO TINTO CANADA SAYS
PROGRAM MET ITS OBJECTIVE OF IMPROVING CONFIDENCE IN THE DIAMOND
GRADE OF THE PROJECT
- STAR DIAMOND HAS NOTIFIED RIO TINTO CANADA THAT COMPLETION OF A COMPREHENSIVE
DIAMOND BREAKAGE STUDY AND CERTAIN OTHER WORK REMAIN
OUTSTANDING
- STAR DIAMOND HAS REMINDED RIO TINTO CANADA OF TERMS OF COURT UNDERTAKING GIVEN BY
RIO TINTO CANADA
Stock Symbol: DIAM: TSX
SASKATOON, SK, Feb. 22, 2021 /CNW/ - Star Diamond Corporation
("Star Diamond" or the "Corporation") today announced that Rio
Tinto Exploration Canada Inc. ("Rio Tinto Canada") has provided
written notice that it has now successfully completed the ten
cutter hole bulk sample program excavated by Rio Tinto Canada in
2019 at the Star - Orion South Diamond Project (the "Project"). Rio
Tinto Canada has confirmed to Star
Diamond that this bulk sample program met Rio Tinto Canada's
objective of improving confidence in the diamond grade of the
Project. In a letter written to Star
Diamond's Chair of the Board, Rio Tinto Canada stated:
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"I am pleased to report to Star Diamond Corporation (SDC) that
Rio Tinto Exploration Canada Inc. (RTEC) has as of today completed
the quality assurance and quality control (QA/QC) procedures
allowing RTEC to accept the final processing and recovery results
of the Star ten bulk sample programme reported by the Saskatchewan
Research Council (SRC) to the participants. I am even more pleased
that those results have met the objective of the Star bulk sampling
programme, which was to improve confidence in the grade of the Star
Kimberlite. I enclose the report which documents the main QA/QC
procedures performed and explains why we are able accept the
certified results reported by SRC.
RTEC has now completed the processing, diamond recovery and
reporting of all diamond results on the samples previously taken
from the 10 cutter holes completed in 2019 on the Star Kimberlite.
We are proud to have completed this work in accordance with
industry standards and to have done so in the middle of the global
COVID-19 pandemic."
Star Diamond has written to Rio
Tinto Canada to advise that completion of a comprehensive diamond
breakage study and certain other work remain outstanding.
Star Diamond has reminded Rio Tinto
Canada that, until the comprehensive diamond breakage study and
that other work is completed, the processing, diamond recovery and
reporting of all diamond results from the ten cutter hole bulk
sample program will not be complete. Rio Tinto Canada has
previously assured Star Diamond that
a comprehensive diamond breakage study would be completed by Rio
Tinto Canada as part of the bulk sample program.
"Star Diamond remains pleased
with the results to date from Rio Tinto Canada's bulk sampling
program, which have confirmed Star Diamond's belief
that the Project has excellent geology with large and contiguous
diamond-bearing kimberlites with a high proportion of valuable Type
IIa stones," said Ken MacNeill,
President and CEO of Star Diamond.
"However, contrary to its prior assurances to Star Diamond, Rio Tinto Canada has not yet
completed a comprehensive diamond breakage study. This study is
required to properly assess the full nature, extent and potential
causes of the undue diamond breakage that appears to have resulted
from Rio Tinto Canada's use of unproven and inadequately tested
extraction and/or diamond recovery methodologies, and the extent to
which larger diamonds would have been recovered in the absence of
such breakage."
As previously disclosed by Star
Diamond, Rio Tinto Canada provided an undertaking
("Undertaking") to the Court of Queen's Bench for Saskatchewan (Judicial Centre of Saskatoon) (the "Court"), which is referred to
in its August 10, 2020 decision, in
ongoing litigation between Star
Diamond and Rio Tinto Canada (the "Legal Proceedings"). The
Undertaking is binding on Rio Tinto Canada.
As the Undertaking is described by the Court in its August 10, 2020 decision, Rio Tinto Canada agreed
that it would not call and/or conduct any meeting of the management
committee under the joint venture agreement (the "Joint Venture
Agreement") between Star Diamond and
Rio Tinto Canada for a period of 120 days following Rio Tinto
Canada completing the processing, diamond recovery and reporting of
all diamond results on the samples previously taken from the ten
bulk sample trenches excavated by Rio Tinto Canada in
2019.
Consistent with the Undertaking, Star
Diamond has advised Rio Tinto Canada that, until all
processing, diamond recovery and reporting of all diamond results
from the ten cutter hole bulk sample program is completed,
including the comprehensive diamond breakage study, the 120-day
period under the Undertaking cannot begin to run.
Notwithstanding that the comprehensive diamond breakage study
has not been completed, Rio Tinto Canada advised Star Diamond on February
8, 2021 that the 120-day period commenced on that date, and
that Rio Tinto Canada intends to call a management committee
meeting under the Joint Venture Agreement once the 120-day period
has elapsed. Rio Tinto Canada claims the completion of the
comprehensive diamond breakage study that it previously said would
be undertaken is not required by the Undertaking it has
given.
Star Diamond will vigorously
resist any attempt by Rio Tinto Canada to call a management
committee meeting other than in compliance with the Undertaking.
This includes completion of the comprehensive diamond breakage
study before the 120-day period under the Undertaking commences to
run. If necessary, Star
Diamond will apply to the Court to enforce the
Undertaking.
Star Diamond also announced today
that the Court has directed that the next step in the previously
disclosed Legal Proceedings that Star
Diamond commenced against Rio Tinto Canada in 2020, namely
the delivery by each of Rio Tinto Canada and Star Diamond to the other of their respective
affidavits of documents, must be completed by March 15, 2021. Once this step occurs,
Star Diamond expects that the
parties will agree to a timetable for the completion of the other
principal pre-trial steps, including oral questioning and the
exchange of expert reports, which Star
Diamond hopes will be completed during 2021. Once the
pre-trial steps are completed, Star
Diamond expects that the Court will schedule a pre-trial
conference and set a date for trial. Given recent guidance
from the Court, including the Court's view that the pace of the
Legal Proceedings so far has been appropriate in all of the
circumstances, Star Diamond does not
expect that the trial will occur in 2021.
Star Diamond continues to vigorously pursue the Legal
Proceedings and is committed to taking all actions necessary to
protect Star Diamond and its
shareholders from the practices and conduct of Rio Tinto Canada.
Star Diamond will provide further
updates on the Legal Proceedings as developments warrant.
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 Preliminary Economic Analysis (the "PEA")
on the Project. The PEA estimated 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 the Corporation's PEA constitute forward-looking statements.
Forward-looking statements contained or implied in this press
release include, but are not limited to, statements regarding the
processing and analysis of, and reporting of results from, the bulk
samples previously collected by Rio Tinto Canada and all timelines;
statements related to diamond breakage and other actions to
complete the processing, diamond recovery and reporting of all
diamond results on the samples previously taken from the ten bulk
sample trenches excavated by Rio Tinto Canada in 2019; statements
related to Star Diamond's intention
to enforce the Undertaking; statements related to the Legal
Proceedings; disclosure regarding the economics and project
parameters presented in the PEA, including, without limitation,
IRR, NPV and other costs and economic information, carats of
diamonds to be recovered, after-tax payback period, tonnes of
kimberlite to be mined, carats per tonne to be recovered (grade),
diamond prices, project life, life of mine, capital costs, and
length of pre-production period; statements related to mineral
resources and/or reserves; statements related to the approval of
the development of the Star - Orion South Diamond Project;
statements relating to future development of the Star - Orion South
Diamond Project and associated timelines; statements with respect
to environmental permitting and approvals; statements with respect
to metallurgical investigations, assessments and test work
including Diamond breakage studies; and the potential proportion of
Type IIa diamonds in the Star and Orion South kimberlites and the
potential for the recovery of large high quality diamonds.
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 valuations, 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, the effects of competition in
the markets in which the Corporation operates, risks related to the
Legal Proceedings and any future legal proceedings to enforce the
Undertaking, the impact of the COVID-19 pandemic, risks related to
the operation of the on-site Bulk Sample Plant and the processing
methods being used by Rio Tinto Canada and the effectiveness
thereof, risks related to diamond breakage and cost overruns and
other consequences arising from Rio Tinto Canada's extraction and
diamond recovery methodologies, risks related to the Corporation's
need for additional financing and the Corporation's ability to
raise that financing, the impact of changes in the laws and
regulations regulating mining exploration and development, 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 the Corporation 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