STAR Diamond Announces Initial Results from Fourth Bulk Sample Trench of STAR – Orion South Diamond Project
NEWS RELEASE October 14, 2020
Stock Symbol: DIAM: TSX Saskatoon, Saskatchewan
STAR DIAMOND ANNOUNCES INITIAL RESULTS FROM
FOURTH BULK SAMPLE TRENCH OF STAR – ORION SOUTH DIAMOND PROJECT
• 3,005 DIAMONDS WEIGHING 131.82 CARATS RECOVERED
• INCLUDING 2.69, 2.03 and 1.26 CARAT STONES
• RESULTS CONTINUE TO SUGGEST RIO TINTO CANADA’S UNPROVEN
METHODOLGIES CAUSING UNDUE DIAMOND BREAKAGE
SASKATOON, Saskatchewan, October 14 , 2020 – Star Diamond Corporation (“Star Diamond” or the
“Corporation”) today announced that a total of 3,005 diamonds weighing 131.82 carats have been recovered
to date from the fourth bulk sample trench (19FALCT010) of ten excavated on the Star Kimberlite by Rio Tinto
Exploration Canada Inc. (“Rio Tinto Canada”) in 2019 (see news releases dated June 3, and October 8, 2019).
“The promising results from the most recent bulk sampling program continue to confirm our belief that the
Star-Orion South project has excellent geology with large and contiguous diamond -bearing kimberlites with a
high proportion of valuable Type IIa stones, as well as potential for large stones,” said Ken MacNeill, President
and CEO of Star Diamond. “We are encouraged by the consistency of the initial results among all four bulk
samples processed to date, their similarity to historical drilling, and t heir consistency with the grades outlined
in our Preliminary Economic Analysis (“PEA”).”
Mr. MacNeill continued, “The results to date continue to validate our belief in the significant economic merit
of the Star- Orion South project . However, these results also continue to reinforce our belief that Rio Tinto
Canada’s extraction and diamond recovery methodologies, including its use of unproven civil engineering
trenching technologies to conduct bulk sampling of Kimberlite, is causing undue diamond breakage, resulting
in significant unnecessary cost overruns and materially damaging Star Diamond’s interest in the project. Star
Diamond continues to vigorously pursue the litigation it previously commenced against Rio Tinto Canada
related to the project, and is c ommitted to taking all actions necessary to protect Star Diamond and its
shareholders from the practices and conduct of Rio Tinto Canada including if necessary by seeking to remove
Rio Tinto Canada from the project.”
The PEA (see news release dated April 16, 2018) 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.
The breakdown of the kimberlite intercepted, and diamonds recovered to date from trench 19FALCT010, are
detailed in Table 1 below. The preliminary results from the first three bulk sample trenches were previously
disclosed by Star Diamond on August 4, 2020, August 20, 2020 and September 21, 2020.
The average diamond grades from the first four trenches are similar to historical diamond grade results
detected from the underground bulk sampling and large diameter drilling (“LDD”) completed on the Star
Kimberlite between 2004 and 2009. These results are also similar to the overall weighted average grade (14
cpht) reported in Star Diamond’s PEA of the Star and Orion South kimberlites (the “Project”).
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The three largest diamonds recovered to date from 19FALCT010 are 2.69, 2.03 and 1.26 carats, respectively,
and were all recovered from Early Joli Fou (“EJF”) kimberlite. The EJF is the dominant kimberlite unit within the
Project in terms of ore volume and diamond grade.
As disclosed by Star Diamond on August 4, 2020, there are indications that recent diamond breakage has
occurred in the diamond parcels recovered thus far from Rio Tinto Canada’s trench cutter bulk sampling
program, suggesting that the extraction and/or processing systems being used by Rio Tinto Canada may be
resulting in diamond breakage. Comprehensive diamond breakage studies are required to assess the nature,
extent and potential causes of the diamond breakage, and the possibility that larger diamonds would have been
recovered absent such breakage.
To date, kimberlite material from eight trenches (19FALCT001, 19FALCT004, 19FALCT003, 19FALCT010,
19FALCT008, 19FALCT009, 19FALCT005 and 19FALCT002) has been processed by Rio Tinto Canada through the
on-site Bulk Sample Plant (the “BSP”), with concentrates forwarded to the Saskatchewan Research Council
(“SRC”) for diamond recovery and reporting. Currently, only the initial diamond results for the first four
trenches have been reported by the SRC.
Table 1. Initial diamond stone and grade results provided for each kimberlite type sampled in Trench
19FALCT010
Kimberlite1
Type
Kimberlite
Intercept
(metres)
Drilled2
Tonnes
Carats3
(+1 DTC)
Grade4
(cpht)
Stones
(+1 DTC)
Stones
per tonne
(+1 DTC)
Largest
Stone
(ct)
URVKU 123.00-129.60 61.99 0.10 0.16 5 0.08 0.02
LJF 129.60-135.80 55.70 0.41 0.73 16 0.29 0.07
EJF 135.80-227.20 989.88 127.74 12.90 2,901 2.93 2.69
CPK 227.20-233.00 71.85 3.57 4.97 83 1.16 0.81
Total 110.00 1,179.42 131.82 3,005
Notes
1. Kimberlite Types: URVKU Undifferentiated, reworked volcaniclastic kimberlite units; LJF: Late Joli Fou
Kimberlite; EJF: Early Joli Fou Kimberlite; CPK Cantuar pyroclastic kimberlite. The URVKU and the LJF
were not included in the Star Diamond PEA mineral resource estimate
2. The excavated tonnes are calculated using theoretical trench volumes and core pilot hole dry densities
provided by Rio Tinto Canada. These are equivalent to dry tonnes
3. Commercial diamonds are defined as diamonds that will not pass through a +1 DTC screen, which has
round apertures of 1.09 millimetres
4. cpht: diamond grade in carats per hundred tonnes
Diamond results reported in this news release are based on diamond recovery processing conducted by SRC’s
Geoanalytical Laboratories Diamond Services located in Saskatoon Saskatchewan. Primary recovery processing
consisted of X-ray transmission (XRT) sorting, magnetic separation and grease table recovery methods. SRC is
an independent mineral processing facility which is accredited to the ISO/IEC 17025:2017 standard by the
Standards Council of Canada as a testing laboratory for specific tests.
The Company also announces that Mr. George Read has assumed the title of Senior Technical Advisor to the
Company. Mr. Read will c ontinue to fully support the Company with his considerable expertise and will
continue to prepare technical information for the Company as a “ Qualified Person” under the definition of NI
43-101.
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About Star Diamond Corporation
Star Diamond Corporation is a Canadian based corporation engaged in the acquisition, exploration and
development of mineral properties. Shares of the Corporation trade on the Toronto Stock Exchange under the
trading symbol “DIAM”. The Corporation’s Fort à la Corne kimberlites (including the Star - Orion South Diamond
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 Corporation announced the positive results of an 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 (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 the Corporation’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 suggesti ng future outcomes or language
suggesting an outlook. In particular, statements regarding the Corporation'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 PEA constitute forward-looking statements. Forward-looking statements contained or implied in this press release
include, but are not limited to, the Corporation’s expectations regarding the pr ocessing and analysis of, and reporting of results from,
the bulk samples previously collected by Rio Tinto Canada and the timeline for doing so, and disclosures regarding the economics and
project parameters presented in the PEA.
These forward-looking statements are based on the Corporation'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 prices, 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 Corporation, risks related to the legal proceedings commenced by the Corporation against Rio Tinto Canada,
including the determination of the Corporation’s pending injunction application by the Court, the effects of competition in the markets
in which Star Diamond operates, the impact of the COVID -19 pandemic, risks related to the operation of the BSP and the processing
methods being used by Rio Tinto Canada and the effectiveness thereof, the impact of changes in the laws and regulations regulat ing
mining exploration, development, closure, judicial or regulatory judgments and legal proceedings, operational and infrastruct ure risks
and the additional risks described in the Corporation's most recently filed Annual Information Form, annual and interim MD&A, news
releases and technical reports. The Corporation's anticipation of and success in managing the foregoing risks could c ause actual results
to differ materially from what is anticipated in such forward-looking statements.
Although management 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 Corporation, 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, the Corporation 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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