Stock Symbol: DIAM: TSX
SASKATOON, SK, June 28, 2021 /CNW/ - Star Diamond Corporation
("Star Diamond") today provided a further update regarding its
continuing dispute with Rio Tinto Exploration Canada Inc. ("Rio
Tinto") and the actions that Star
Diamond is being forced to take to protect against the
conduct of Rio Tinto.
Late last week, the Court of Queen's Bench for Saskatchewan (Judicial Centre of Saskatoon) (the "Court") confirmed that,
notwithstanding Rio Tinto's acknowledgement that a diamond breakage
assessment was an essential part of its recent 10 cutter hole bulk
sample diamond exploration program, the undertaking previously
provided to the Court by Rio Tinto does not oblige Rio Tinto to
complete such diamond breakage assessment at this time.
Star Diamond is concerned that
Rio Tinto is unnecessarily delaying the completion of its diamond
breakage assessment, which Star
Diamond expects will further validate its previously
expressed concerns about Rio Tinto's use of unproven and
inadequately tested extraction and/or diamond recovery
methodologies to conduct its bulk sample program. Star
Diamond looks forward to reviewing Rio Tinto's diamond breakage
assessment as soon as it is completed.
As previously disclosed by Star
Diamond, Rio Tinto has recently purported to call, for
July 21, 2021, a meeting of the
management committee of the joint venture that Rio Tinto claims has
been formed between Star Diamond and
Rio Tinto. Star Diamond
believes that no such joint venture has been formed because Rio
Tinto's November 2019 purported
exercise of its options under the Option to Joint Venture Agreement
dated June 22, 2017 did not comply
with that agreement. Accordingly, notwithstanding that Rio Tinto
has given notice of a management committee meeting to be held on
July 21, 2021, Star Diamond believes that no valid meeting of
the management committee can be held at this
time.
Star Diamond also today commented
on the quantum of the joint venture budget being proposed by Rio
Tinto. As previously disclosed by Star Diamond, Rio Tinto has stated it will be
seeking approval of a proposed joint venture budget for the period
from June 2021 to March 2022 of Cdn. $17.8
million, and will also be seeking to add to that budget an
aggregate of Cdn. $64.4 million
allegedly spent by Rio Tinto during 2019, 2020 and the first five
months of 2021. Because no joint venture has yet been validly
formed, Star Diamond believes that
it currently has no responsibility for any of such prior or future
expenditures.
Star Diamond also notes that,
even if a joint venture had been validly formed in November 2019, which as stated above Star Diamond does not believe is the case, the
relevant agreements do not allow Rio Tinto to include in the joint
venture budget, or otherwise recover from Star Diamond, much of the Cdn. $64.4 million allegedly spent by Rio Tinto during
2019, 2020 and the first five months of 2021. Instead, in
Star Diamond's view, those
agreements permit Rio Tinto, in certain circumstances following the
valid formation of the joint venture, to add to the first joint
venture budget at most the approximately Cdn. $8.2 million allegedly spent by Rio Tinto between
November 7, 2019 and December 31, 2019. Again, because no joint
venture has yet been validly formed, Star
Diamond believes that it has no responsibility to fund at
this time any portion of such expenditures.
Star Diamond continues to vigorously pursue the legal
proceedings (the "Legal Proceedings") it previously commenced
against Rio Tinto and is committed to taking all actions necessary
to protect Star Diamond and its
shareholders from the practices and conduct of Rio Tinto.
Star Diamond will provide further
updates in respect of these matters, including the Litigation
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 Star Diamond
trade on the Toronto Stock Exchange under the trading symbol
"DIAM". Star Diamond's Fort à
la Corne kimberlites (including the Star - Orion South Diamond
Project (the "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, Star
Diamond 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 Star Diamond'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 Star
Diamond's future operations, future exploration and
development activities, other development plans, joint venture
budgets or obligations or litigation plans constitute
forward-looking statements. By their nature, statements referring
to mineral reserves, mineral resources, Star Diamond's PEA, joint venture budgets and
obligations or the Legal Proceedings 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 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 in 2019; statements related
to joint venture budgets or obligations; 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 Star Diamond'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 Star Diamond, the effects of competition in the
markets in which Star Diamond operates, risks related to the
Legal Proceedings, risks related to joint venture budgets and
obligations and interpretations of agreements with Rio Tinto,
risks related to potential dilution of Star
Diamond's interest in the Project, 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 and the effectiveness thereof, risks related to diamond
breakage and cost overruns and other consequences arising from Rio
Tinto's extraction and diamond recovery methodologies, risks
related to Star Diamond's need for
additional financing and Star
Diamond'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 Star
Diamond's most recently filed Annual Information Form,
annual and interim MD&A, news releases and technical
reports. Star Diamond'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 Star Diamond 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 Star Diamond,
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, Star
Diamond does not undertake to update any forward-looking
statement that is made herein.
www.stardiamondcorp.com
SOURCE Star Diamond Corporation