TSX: DIAM
SASKATOON, SK,
May 12,
2022 /CNW/ - Star Diamond
Corporation ("DIAM", "Star Diamond" or the "Company")
reports that the unaudited results of its operations for the
quarter ended March 31, 2022 will be
filed today on SEDAR and may be viewed at www.sedar.com once
posted. A summary of key financial and operating results for the
three months ended March 31, 2022 is
as follows:
Highlights
- Reported on technical and joint venture meetings with Rio Tinto
Exploration Canada Inc. ("Rio Tinto Canada") concerning the Fort à
la Corne mineral properties (referred to by Rio Tinto Canada as the
"FalCon" Project) regarding the data analysis and exploration
activities that have been undertaken by Rio Tinto Canada over the
last two years
- Provided an update regarding the FalCon 'Orbit' exploration
program being conducted by Rio Tinto Canada to review and
prioritize the Fort à la Corne kimberlites outside of the Star and
Orion South Kimberlites (the "Star – Orion South Diamond Project"
or the "Project") which has highlighted the kimberlites of Orion
North (K120, K147, K148) as having significant potential and Orion
Centre (K145), Taurus (K150, K118, K122) and K119 as having a
number of the attributes sought but require further evaluation
- Announced study results identifying the abundance of Type IIa
diamonds in the diamond parcels recovered from the Early Joli Fou
("EJF") Geological Units at Orion North and Taurus Kimberlites
- Acquired an additional interest in the Buffalo Hills joint
venture project
- Completed a $5.0 million private
placement
Overview
Star Diamond Corporation is a Canadian natural resource
company focused on exploring and developing
Saskatchewan's diamond resources. Star
Diamond holds, through a joint venture arrangement with Rio Tinto
Exploration Canada Inc. ("Rio Tinto Canada", a wholly-owned
subsidiary of Rio Tinto plc or "Rio Tinto"), a 25% interest in
certain Fort à la Corne kimberlites (including the Star – Orion
South Diamond Project, or "Project"). These properties 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. Rio Tinto Canada refers to their Fort
à la Corne mineral properties as "Project FalCon".
Activities Relating to the Fort à la Corne mineral properties
(including the Project)
During technical meetings concerning
the FalCon Project held in March
2022, Rio Tinto Canada indicated to the Company that a
number of desktop studies have been undertaken to evaluate the
mineability and economic viability of the Project (see News Release
dated February 17, 2022). Star
Diamond recently received presentations from both Rio Tinto Canada
and Rio Tinto personnel concerning data analysis and exploration
activities that have been undertaken by Rio Tinto Canada over the
last two years (see News Release dated March
9, 2022). Topics of interest covered during these technical
meetings included: 1) Star Kimberlite trench cutter bulk sampling
program results, 2) Diamond size and quality analysis, 3) 'Orbit'
program update, 4) Mineability study, 5) Geological model and
resource update, 6) Community and stakeholder engagement, 7)
Environmental and permitting and, 8) Green energy and carbon
mineralization. As the Company analyzes the information presented
at these technical meetings and materials relating to these topic
areas, the Company may provide further details and/or results of
these studies.
The FalCon 'Orbit' exploration program conducted by Rio Tinto
Canada has resulted in a number of kimberlites being prioritized
for additional diamond evaluation work (see News Release dated
April 12, 2022). Rio Tinto Canada
geologists of the Orbit exploration team have, over the past few
years, used a spectrum of evaluation techniques to review and
prioritize the Fort à la Corne kimberlites outside of the Star
and Orion South Kimberlites, which have already been subject to
extensive evaluation. This program has highlighted the kimberlites
of Orion North (K120, K147, K148) as having significant potential
to add to the FalCon Project. Orion Centre (K145), Taurus (K150,
K118, K122) and K119 stand out in the field as having number of the
attributes sought but require further work to completely evaluate.
The locations of these kimberlites relative to Star and Orion South are shown on the map, which
is available on the Star Diamond website. Rio Tinto Canada has
indicated that it is in the process of developing additional
diamond evaluation work to be conducted on these kimberlites. The
evaluation techniques used thus far by the Orbit exploration team
to prioritize these Orion North, Orion Centre and Taurus
Kimberlites have included: componentry method of core logging;
diamond inclusion studies; garnet colour studies; trace element
geochemistry; thermobarometry; and microdiamond sampling. These
studies have highlighted the kimberlites of Orion North (K120,
K147, K148) as satisfying Rio Tinto Canada's Ore Grade Width
Intercept ("OGWI") requirements and that these kimberlites will
require additional evaluation work. Orion Centre (K145), Taurus
(K150, K118, K122) and K119 indicate the potential to deliver
OGWIs.
The Company recently announced the completion of a major
study into the abundance of Type IIa diamonds in the diamond
parcels recovered from the Early Joli Fou ("EJF") Geological Units
at the Orion North and Taurus Kimberlites. These diamonds were
recovered by Star Diamond between 2006 and 2008 from 48-inch large
diameter drilling ("LDD") programs. This study confirms that
unusually high proportions of Type IIa diamonds are present in both
the Orion North and Taurus Kimberlites. Of particular note is the
remarkably high proportion of Type IIa diamonds in the Orion North
147/148 EJF (52%) of which 66% of the 24 stones, 3 grainer (0.66
carats) and above are Type IIa. This study also confirms and
augments an earlier study of Type IIa diamonds being present in the
Fort a la Corne kimberlites with Star at (26.5 percent) and Orion
South Kimberlite (12.5 percent) (see News Releases dated
June 09, 2010 & March 04, 2019). Type IIa diamonds are very rare
and account for less than 2 percent of all natural rough diamonds
mined from kimberlites. Many high-value, top colour, large specials
(greater than 10.8 carats) are Type IIa diamonds, which include all
ten of the largest known rough diamonds recovered worldwide.
Activities relating to other mineral properties
The
Company recently announced that pursuant to a Quitclaim, Surrender
and Assignment of Interest Agreement dated May 11, 2022, the Company has acquired an
additional joint venture interest of approximately 17% in the
Buffalo Hills project for nominal consideration (see News Release
dated May 12, 2022). As a result of
the transaction, Star Diamond and Canterra Minerals Corporation
each hold a 50% interest in the Buffalo Hills project. Located
approximately 400 kilometres northwest of Edmonton, Alberta, Canada, the Buffalo Hills
project is a significant and accessible field of diamond bearing
kimberlites, with similarities to the Fort á la Corne kimberlites
in Saskatchewan, Canada.
Year to Date Results
For the quarter ended
March 31, 2022, the Company recorded
a net loss of $0.9 million or
$0.00 per share (basic and fully
diluted) compared to a net loss of $1.1
million or $0.00 per share for
the same period in 2021. The losses during these quarters were due
to operating costs and exploration and evaluation expenditures
incurred by the Company exceeding interest income earned on cash
and cash equivalents.
During April 2022, the Company
completed a private placement whereby an aggregate of 16,666,667
Units were issued for proceeds of $5.0
million (see News Releases dated April 6, 2022 and April
22, 2022). Each Unit was comprised of one common share and
one warrant. Each whole warrant entitles the holder thereof to
purchase one common share at a price of $0.40, for a period of two years from the closing
of the private placement.
Selected financial highlights include:
Condensed
Consolidated Statements of Financial Position
|
As at
March
31,
2022
|
As at
December
31,
2021
|
Current
assets
|
$
3.3 M
|
$
1.5 M
|
Exploration and
evaluation, capital and other assets
|
67.7 M
|
67.9 M
|
Current
liabilities
|
5.0 M
|
3.1 M
|
Non-current
liabilities
|
1.0 M
|
1.1 M
|
Shareholders'
equity
|
65.0 M
|
65.2 M
|
Consolidated
Statements of Loss
|
Quarter
Ended
March 31,
2022
|
Quarter Ended
March 31,
2021
|
Interest and other
income
|
$
0.0 M
|
$
0.0 M
|
Expenses
|
0.7 M
|
1.4 M
|
Investment in Wescan
Goldfields Inc.
|
(0.2) M
|
0.3 M
|
Net loss for the
period
|
0.9
M
|
1.1
M
|
Net loss per share for
the period (basic and diluted)
|
0.00
|
0.00
|
Condensed
Consolidated Statements of Cash Flows
|
Quarter Ended
March 31,
2022
|
Quarter Ended
March 31,
2021
|
Cash flows from
operating activities
|
$
1.1 M
|
$
(1.6) M
|
Cash flows from
investing activities
|
0.0 M
|
0.0 M
|
Cash flows from
financing activities
|
0.5 M
|
1.9 M
|
Net increase in
cash
|
1.6 M
|
0.3 M
|
Cash – beginning of
period
|
1.3 M
|
4.8 M
|
Cash – end of
period
|
2.9 M
|
5.1 M
|
Outlook
The provincial environmental approval of the
Project received in 2018, alongside the previous positive federal
decision, marked a major milestone for the Project. In addition,
the positive results of the 2018 independent PEA show that the
Project can be economically developed and operated while providing
direct employment for hundreds of people throughout the
construction phase and hundreds of people continuously over its
estimated 38 year mine life.
The successful completion of the 2017 consolidation of the Fort
à la Corne mineral properties (including the Project) and the
amended Fort à la Corne joint venture agreement that was announced
in December 2021 defines a new phase
for the Company. The arrangements announced in December 2021 are intended to ensure that key
project milestones, and the certainty associated with them, will
have been achieved before Star Diamond has to contribute any
additional capital. Star Diamond will have no obligation to fund or
contribute to carried interest costs until the commencement of
commercial production, which will not occur until after the
completion of construction of the diamond mine with it generally
operating at certain specified thresholds for 90 days. Once a
decision to develop the mine has been made and publicly announced,
Star Diamond will have six months before it is required to begin
contributing to its share of capital costs and expenditures
incurred for construction of the mine.
As of May 12, 2022, the Company
had approximately $3.4 million in
cash and cash equivalents (excluding $0.6
million in restricted cash). A portion of the Company's cash
and cash equivalents will be used for programs (including remaining
flow-through commitments) to further assess, evaluate and advance
certain aspects of the Company's mineral properties, as well as for
general corporate matters.
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 holds, through a joint
venture arrangement with Rio Tinto Canada (a wholly-owned
subsidiary of Rio Tinto), a 25% interest in certain Fort à la Corne
kimberlites (including the Star – Orion South Diamond Project).
These properties 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. Rio Tinto refers to their Fort à la Corne
mineral properties as "Project FalCon". During 2018, Star Diamond
announced the positive results of an independent Preliminary
Economic Assessment on the Project. The PEA (on a 100% basis)
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).
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 Company'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
PEA constitute forward-looking statements. Forward-looking
statements contained or implied in this news release include, but
are not limited to, statements relating to the Company's ability to
continue as a going concern; statements regarding programs
previously performed by Rio Tinto Canada; statements regarding
future programs by Rio Tinto Canada; statements related to diamond
breakage and other reporting; 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; the Company's need for
and intention to seek additional financing; statements with respect
to metallurgical and diamond investigations, assessments and test
work including diamond breakage studies; the potential
proportion of Type IIa diamonds in the Star, Orion South, Orion North and Taurus kimberlites
and the potential for the recovery of large,
high-quality diamonds.
These forward-looking statements are based on the Company'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 Company, the nature and outcome of studies,
analyses, criteria or conditions that Rio Tinto Canada may consider
relevant to its assessment of whether to seek to further invest in
the Project or seek to develop the Project into an operating mine,
the effects of competition in the markets in which the Company
operates, the impact of the COVID-19 pandemic, risks related to
diamond breakage from extraction and diamond recovery, risks
related to the Company's need for additional financing and the
Company'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 Company's most recently filed
Annual Information Form, annual and interim MD&A, news releases
and technical reports. The Company'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 Company 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 Company,
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 laws, the Company does not undertake to
update any forward-looking statement that is made herein.
www.stardiamondcorp.com
SOURCE Star Diamond Corporation