STAR Diamond Corporation Announces First Quarter 2022 Results
NEWS RELEASE May 12, 2022
TSX: DIAM Saskatoon, Saskatchewan
STAR DIAMOND CORPORATION ANNOUNCES FIRST QUARTER 2022 RESULTS
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 under taken 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 Dia mond Corpo ration is a Canadian n atural resou rce c ompany focused on explo ring and de veloping
Saskatchewan's d iamond resources. Star Diamond holds , through a joint venture arrangement with Rio Tinto
Exploration Canada Inc. (“R io 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 tech nical
meetings and materials relating to these topic areas, the Company may provide further details and/or results of
these studies.
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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 ; g arnet colour stud ies; trace
element geochemistry ; thermobarometry; and m icrodiamond 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 diamond s in
the diamond parcels recovered from t he 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, t he 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.
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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 spe cified 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 R io Tinto Canada (a
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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", "targ et", "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 diamo nd
valuations, risks relating to fluctuations in the Canadian dollar and other currencies relative to the US do llar, 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 co ntained 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 law s, the Company does not undertake to update any forward- looking
statement that is made herein.
For further information: [email protected] or (306) 664-2202
www.stardiamondcorp.com
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