Stock Symbol: DIAM: TSX
SASKATOON, SK, July 8, 2021 /CNW/ - Star Diamond
Corporation ("Star Diamond") today announced that it has written to
Dave S. Andrews, the Head of
Exploration Growth & Innovation at Rio Tinto, responding to the
recently disclosed latest predatory and coercive actions of Rio
Tinto whereby it is purporting to convene a meeting of the
management committee of the joint venture that Rio Tinto claims was
previously formed between Star
Diamond and Rio Tinto.
Star Diamond has notified Rio
Tinto that no joint venture has yet been validly formed between
Star Diamond and Rio Tinto, and that
Rio Tinto has no right to call or hold a meeting of the management
committee of the purported joint venture. Star Diamond has also advised Rio Tinto that any
attempt to hold such a meeting, or to approve any work plan or
budget or make any other decision on behalf of the purported joint
venture, will in Star Diamond's view
be invalid.
Star Diamond's letter to Rio
Tinto states, in part:
"Star
Diamond is deeply disappointed by Rio Tinto's latest
conduct. This appears to signal a return by Rio Tin to its prior predatory and coercive
tactics designed to misuse its economic clout to misappropriate
from Star Diamond and its
shareholders some portion of the very significant value that exists
in the Star-Orion South Diamond Project. Rio Tinto has already
irresponsibly run wildly over-budget, claiming it has spent
approximately $168 million to
essentially complete a 10-hole bulk sample program that Rio Tinto
told Star Diamond going in would
cost approximately $18.5
million.
Rio Tinto now seeks to call a
management committee meeting that it has no legal right to call for
a joint venture that Rio Tinto knows has not been duly formed. Rio
Tinto has no one to blame but itself for the position it is in,
having previously sought to improperly enrich itself by trying to
wrongfully jump Star Diamond through
the contemporaneous purported exercise in November 2019 of Rio Tinto's options under the
Option to Joint Venture Agreement dated June
22, 2017. As you know, Star
Diamond now has documentary evidence showing that this was
not simply bad judgment exercised by local Rio Tinto personnel, but
an intentional tactical decision made at the highest
executive levels of Rio Tinto plc to try to unjustifiably dilute
Star Diamond's interest in what Rio
Tinto plc has publicly acknowledged is one of its `highest value
projects' globally.
Compounding its misconduct, Rio
Tinto now seeks to wrongfully add to the first joint venture budget
approximately $56.2 million of
alleged expenditures from 2020 and 2021 that were not part of the
`then current work plan' as of November 6,
2019. Even if Rio Tinto had previously validly exercised its
options under the Option to Joint Venture Agreement such that a
joint venture was formed in November
2019, which as Rio Tinto well knows is not the case, Rio
Tinto has no legal entitlement to recover any of these
amounts."
Ewan Mason, the Chair of the
Board of Star Diamond, stated: "The
board of directors of Star Diamond
is fully resolved to stand up to the unfair and improper conduct of
Rio Tinto. We will simply not allow Rio Tinto to add Star Diamond and its shareholders to the
unfortunately growing list of junior mining companies that fall
victim to Rio Tinto's bait and switch approach where the allure of
a mutually-beneficial partnership with Rio Tinto is quickly
replaced with the reality of dealing with an organization that has
little regard for the agreements it signs, business ethics, local
stakeholder interests or anything other than its own monetary
self-interest."
Ken MacNeill, President and Chief
Executive Officer of Star Diamond,
stated: "The Star-Orion South Diamond Project is one of the most
potentially valuable diamond projects in existence, which is why
Rio Tinto is spending so much to pursue its development and has
declared it to be one of Rio Tinto's `highest value projects'
globally. If Rio Tinto wants to own 100% of the Project, it
needs to pay fair value for it."
Star Diamond continues to vigorously pursue 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 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 between Star Diamond and Rio Tinto 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 between Star
Diamond and Rio Tinto; 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 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 or Star Diamond, the effects of competition in the
markets in which Star Diamond operates, risks related to the
legal proceedings between Star
Diamond and Rio Tinto, 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.
SOURCE Star Diamond Corporation