TSX: DIAM
SASKATOON, SK, Nov. 10,
2022 /CNW/ - Star Diamond
Corporation ("Star Diamond" or the "Company") today
reported its financial results for the quarter ended September 30, 2022.
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 mineral properties (which
includes the Star – Orion South Diamond Project, or "Project")
within the Fort à la Corne diamond district of central
Saskatchewan, Canada. These
properties are 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".
Fort à la Corne mineral
properties
On June 28, 2022, Rio Tinto Canada
exercised its voting power at a meeting of the Fort à la Corne
joint venture management committee to place the Fort à la Corne
properties on care and maintenance through December 31, 2022. Rio Tinto Canada also advised
that, subject to fulfilling its existing obligations, it does not
intend to commit additional capital to the Fort à la Corne
properties during 2022 beyond what is necessary for care and
maintenance. Rio Tinto Canada also advised the Company that it
intends to conduct a near-term review of its alternatives regarding
the Fort à la Corne properties, including its potential exit.
During the meeting, Rio Tinto Canada stated that it remains pleased
with the results of the comprehensive studies and bulk sampling
program that have been completed to date at the Project.
Star Diamond continues to work
with Rio Tinto Canada in assessing alternatives regarding the
Project. These discussions remain at an early stage and there is no
certainty that any agreement will be reached between Star Diamond and Rio Tinto Canada regarding any
such potential arrangements.
Quarterly results
For the quarter ended September 30,
2022, the Company recorded a net loss of $0.5 million or $0.00 per share (basic and fully diluted)
compared to a net loss of $2.0
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.
Year to Date Results
For the nine months ended September 30,
2022, the Company recorded a net loss of $2.1 million or $0.00 per share (basic and fully diluted)
compared to a net loss of $5.2
million or $0.01 per share for
the same period in 2021. The losses during the nine month periods
ended September 30, 2022 and 2021
were primarily due to ongoing operating costs and exploration and
evaluation expenditures incurred by the Company exceeding interest
and other income earned. The decrease between periods was primarily
due to lower consulting and professional expenditures and
exploration and evaluation expenditures incurred as well as lower
share-based payments expensed during the nine months ended
September 30, 2022.
Selected financial highlights
include:
Condensed
Consolidated Statements of Financial Position
|
As at
September
30,
2022
|
As at
December
31,
2021
|
Current
assets
|
$
3.3 M
|
$
1.5 M
|
Exploration and
evaluation, capital and other assets
|
66.7 M
|
67.9 M
|
Current
liabilities
|
0.1 M
|
3.1 M
|
Non-current
liabilities
|
0.9 M
|
1.1 M
|
Shareholders'
equity
|
69.0 M
|
65.2 M
|
Condensed
Consolidated Statements of Loss
|
Three Months
Ended
September
30,
2022
|
Three Months
Ended
September
30,
2021
|
Nine Months
Ended
September 30,
2022
|
Nine Months
Ended
September 30,
2021
|
Interest and other
income
|
$
0.0 M
|
$
0.0 M
|
$
0.0 M
|
$
0.0 M
|
Expenses
|
0.2 M
|
1.9 M
|
1.7 M
|
5.2 M
|
Investment in Wescan
Goldfields Inc. and other items
|
(0.3) M
|
(0.1) M
|
(0.4) M
|
0.0 M
|
Net loss for the
period
|
0.5
M
|
2.0
M
|
2.1
M
|
5.2
M
|
Net loss per share for
the period (basic and diluted)
|
0.00
|
0.00
|
0.00
|
0.01
|
Condensed
Consolidated Statements of Cash Flows
|
Quarter Ended
September 30,
2022
|
Quarter Ended
September 30,
2021
|
Cash flows from
operating activities
|
$
(4.5) M
|
$
(4.3) M
|
Cash flows from
investing activities
|
0.6 M
|
0.0 M
|
Cash flows from
financing activities
|
5.7 M
|
1.9 M
|
Net decrease in
cash
|
1.8 M
|
(2.4) M
|
Cash – beginning of
period
|
1.3 M
|
4.7 M
|
Cash – end of
period
|
3.1 M
|
2.3 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.
Following the successful completion of the 2017 consolidation of
the Fort à la Corne mineral properties, the arrangements announced
in December 2021 were 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. Due to the June 2022
decision by Rio Tinto Canada to exercise its voting power to place
the Fort à la Corne properties on care and maintenance through
December 31, 2022 no additional
exploration programs will occur on site in 2022. During the
June 2022 meeting, Rio Tinto Canada
also stated that it remains pleased with the results of the
comprehensive studies and bulk sampling program that have been
completed to date at the Project. Though the board of directors of
Star Diamond is disappointed by
these decisions, Star Diamond
intends to work with Rio Tinto Canada in assessing alternatives
regarding the Fort à la Corne properties.
As of November 10, 2022, the
Company had approximately $3.0
million in cash and cash equivalents. 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 is a Canadian based
corporation engaged in the acquisition, exploration and development
of mineral properties. Shares of the Company trade on the TSX under
the trading symbol "DIAM". The Fort à la Corne kimberlites
(including 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, the Company announced the positive results of the
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.
During 2018, the Saskatchewan Ministry of Environment approved
the Project. The Canadian Environmental Assessment Agency
previously announced a positive Environmental Assessment Decision
for the Project by the federal Environment Minister.
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 Rio Tinto
Canada's advice that it will not commit additional capital to the
Fort à la Corne properties during 2022 beyond care and
maintenance; statements regarding future capital commitments,
programs and plans by Rio Tinto Canada, including its review of
alternatives regarding the Fort à la Corne properties and potential
exit (and Star Diamond's intention
to work with Rio Tinto Canada in assessing such alternatives) and
terms of any possible future agreement that may be reached between
Star Diamond and Rio Tinto Canada
regarding the Project; 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 anticipated use of
the Company's cash and cash equivalents; 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