STAR Diamond Update
NEWS RELEASE June 28, 2021
Stock Symbol: DIAM: TSX Saskatoon, Saskatchewan
STAR DIAMOND UPDATE
SASKATOON, Saskatchewan, June 28, 2021 – Star Diamond Corporation (“Star Diamond”) today provided a
further update regarding its continuing dispute with Rio Tinto Exploration Canada Inc. (“Rio Tinto”) and the
actions that Star Diamond is being forced to take to protect against the conduct of Rio Tinto.
Late last week, the Court of Queen’s Bench for Saskatchewan (Judicial Centre of Saskatoon) (the “Court”)
confirmed that, notwithstanding Rio Tinto’s acknowledgement that a diamond breaka ge assessment was an
essential part of its recent 10 cutter hole bulk sample diamond exploration program, the undertaking previously
provided to the Court by Rio Tinto does not oblige Rio Tinto to co mplete such diamond breakage assessment
at this time.
Star Diamond is concerned that Rio Tinto is unnecessarily delaying the completion of its diamond breakage
assessment, which Star Diamond expects will further validate its previously expressed concerns about Rio
Tinto’s use of unproven and inadequately tested extraction and/or diamond recovery methodologies to
conduct its bulk sample program. Star Diamond looks forward to reviewing Rio Tinto’s diamond breakage
assessment as soon as it is completed.
As previously disclosed by Star Diamond, Rio Tinto has recently purported to call, for July 21, 2021, a meeting
of the management committee of the joint venture that Rio Tinto claims has been formed between Star
Diamond and Rio Tinto. Star Diamond believes that no such joint venture has been formed because Rio Tinto’s
November 2019 purported exercise of its options under the Option to Joint Venture Agreement dated June 22,
2017 did not comply with that agreement. Accordingly, notwithstanding that Rio Tinto has given notice of a
management committee meeting to be held on July 21, 2021, Star Diamond believes that no valid meeting of
the management committee can be held at this time.
Star Diamond also today commented on the quantum of the joint venture budget being proposed by Rio Tinto.
As previously disclosed by Star Diamond, Rio Tinto has stated it will be seek ing approval of a proposed joint
venture budget for the period from June 2021 to March 2022 of Cdn. $17.8 million , and will also be seeking to
add to that budget an aggregate of Cdn. $64.4 million allegedly spent by Rio Tinto during 2019, 2020 and the
first five months of 2021. Because no joint venture has yet been validly formed, Star Diamond believes t hat it
currently has no responsibility for any of such prior or future expenditures.
Star Diamond also notes that, even if a joint venture had been validly formed in November 2019, which as
stated above Star Diamond does not believe is the case, th e relevant agreements do not allow Rio Tinto to
include in the joint venture budget, or otherwise recover from Star Diamond, much of the Cdn. $64.4 million
allegedly spent by Rio Tinto during 2019, 2020 and the first five months of 2021. Instead, in Star Diamond’s
view, those agreements permit Rio Tinto, in certain circumstances following the valid formation of the joint
venture, to add to the first joint venture budget at most the approximately Cdn. $8.2 million allegedly spent by
Rio Tinto between November 7, 2019 and December 31, 2019. Again, because no joint venture has yet been
validly formed, Star Diamond believes that it has no responsibility to fund at this time any portion of such
expenditures.
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Star Diamond continues to vigorously pursue the legal proceedings (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, including the Litigation Proceedings, as developments warrant.
About Star Diamond Corporation
Star Diamond Corporation is a Canadian based corporation engaged in the acquisiti on, 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 anno unced 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 suggesti ng 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 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 relat ed 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;
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 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 in cluding, 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 Star
Diamond, the effects of competition in the markets in which Star Diamond operates, risks related to the Legal Proceedings, risks related
to joint venture budgets and obligat ions 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
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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 ri sks 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 re sults 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.
For further information: [email protected] or (306) 664-2202
www.stardiamondcorp.com
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