FIVE STAR DIAMONDS LIMITED Av. Jornalista Ricardo Marinho, 360 Ed. Cosmopolitan - Sala 113, CEP 22631-350 Barra da Tijuca - Rio de Janeiro Brazil
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TSX-V STAR
Market Release
1 May 2017
FIVE STAR DIAMONDS
LIMITED
Av. Jornalista Ricardo Marinho, 360
Ed. Cosmopolitan - Sala 113,
CEP 22631-350
Barra da Tijuca - Rio de Janeiro
Brazil
Tel: +55 8 9200 6264
Contact:
Joe Burke, GM Marketing
Rajan “Raj” Rai, Investor Relations
+1 778 835 9200
Directors / Officers:
Matthew Wood
Luis Azevedo
Brian McMaster
Gizman Abbas
Simon Rothschild
Nicholas Pike
TSXV: STAR
CATALAO DIAMOND PROJECT
UPDATE
Toronto, ON - Five Star Diamonds Limited (TSXV: STAR) (the “Company”
or “Five Star Diamonds”) is very pleased to provide the following update
on recent activities in Brazil.
Highlights
Successful completion of the pilot mining and
processing programme at the Catalao Diamond Project.
This has highlighted the potential for a commercial
operation within the oxide zones of the Cat1A, Cat1B
and Cat1C kimberlite pipes.
World renowned diamond processing group, ADP
Group (www.adpgroup.com), has now been appointed
to complete design work and construction of the oxide
commercialization project.
The oxide commercial plant is largely now on site and
in the final design and pre construction phase.
Approximately 80% of capital expenditure has been
completed.
The oxide commercial plant will utilize a Dense Media
Separator (DMS) to recover concentrates which will
then be processed at the c ompany’s existing diamond
recovery plant in Catalao City.
Key site appointments are now being made in
anticipation of the commencement of construction and
an expanded mining operation.
The Company expects to be able to provide further
updates in the coming months including an estimation
for the commencement and potential sale of its first
commercial diamond production.
The existing pilot plant is now being demobilized and
packed for relocation to the Companies 100% owned
Jaibaras Diamond Project in Para State, in northern
Brazil.
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Five Star Diamond’s Project Locations
Five Star Diamond’s business is diamond development. It is focused on acquiring and
developing advanced staged diamond projects in Brazil. Since it was established, it has pursued
an accelerated growth strategy and aims to be one of the first producers of diamonds from
kimberlite deposits in Brazil. The Company is focused on the development of sustainable
kimberlite pipes and is not involved in alluvial diamond mining with its associated
environmental issues. The Company works closely with local, state and federal authorities in
Brazil to foster an open, transparent and legal diamond industry in Brazil.
The flagship project of Five Star Diamonds is the 100% owned advanced stage Catal ao
diamond project located in the famous Coromandel diamond district of Brazil . The Project
comprises one exploration licence covering 1,999.42 hectares. In addition, the Company has
submitted applications for three exploration licences over proximate areas covering a total
of 5,998.37 hectares.
In 1853, a diamond discovered in Coromandel became the first large Brazilian diamond
whose history is fully authenticated. It was named “Estrela do Sul” (Star of the South) and
weighed 261.9 carats. Additional notable stones discovered in the same area include one
weighing 122.5 carats (found four years later, in 1857). Other notable stones authenticated
are 118 carats (1929), 108 carats (1940), and 174.5 carats (1954).
A pilot plant was constructed by the Company in Catal ao and commissioned, and an initial
mining and pilot processing program was completed on the oxide zones at three diamond
bearing kimberlite pipes. A feasibility study is currently underway to evaluate the fresh rock
zone.
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Cautionary Note Regarding Catalao Production Decision
The decision to commence production at the Catalao Diamond Project and the Company's
plans for a mining operation as disclosed herein (the "Production Decision ") were based on
economic models prepared by the Company in conjunc tion with management's knowledge
of the property and the existing indicated and inferred mineral resources on the property.
The Production Decision was not based on a preliminary economic assessment, a pre -
feasibility study or a feasibility study of mine ral reserves demonstrating economic and
technical viability. Accordingly, there is increased uncertainty and economic and technical
risks of failure associated with the Production Decision, in particular the risk that mineral
grades will be lower than expected, the risk that construction or ongoing mining operations
are more difficult or more expensive than expected, the risk that the Company will not be
able to transport or sell the mineralized rock it produces on the terms it expects, or at all;
production and economic variables may vary considerably, due to the absence of a detailed
economic and technical analysis normally contained in a feasibility study.
The Company wholly owns four diamond process plants in Brazil
0.5tph mobile wash and jig concentrate bulk sampling plant.
5tph wash and rotary pan concentrate plant. Recently completed the pilot programme
at Catalao and is now planning to mobilise to the Jaibaras Diamond Project.
100tph wash and 30tph DMS concentrate plant. This is currently in final design and
pre-construction at Catal ao. The world renowned diamond processing group, ADP
Group have been appointed to complete the design work. ADP will also construct and
commission this plant . Approximately 80% of capital expenditure has been
completed. Key site appointments are now being made in anticipation of the
commencement of construction and an expanded mining operation on site . The
Company expects to be able to provide further updates in the coming months
including an estimation for the commencement and potential sale of its first
commercial diamond production.
High security diamond recovery and sorting plant located nearby in Catalao City.
Selection of run of mine diamonds from the successful Catalao Diamond Project pilot operation
The Company recently transported a small parcel of diamonds to Antwerp , Belgium for
cleaning and assessment. This parcel of diamonds, mined in the pilot programme at Catalao,
have been classed as uniquely pure quality with pure to VS in almost 85% of the diamonds
viewed. In addition, fluorescence was 99% absent. These are unique and highly desirable
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characteristics in diamonds and very few known mining concessions are able to produce such
top end colors almost entirely.
The Company now controls a dominant and highly enviable position in the Brazilian
kimberlite diamond sector. Along with the Catalao Project, the Company owns 22 other
diamond kimberlite projects comprising an aggregate of 72 expl oration licences and
applications covering a total area of 123,667 hectares.
All of the Company’s projects are 100% owned and have been previously explored by either
Rio Tinto or De Beers. A total of 15 diamond bearing kimberlite pipes have already been
sampled by Five Star Diamonds and a further 87 kimberlite pipes are to be tested across the
Company’s projects.
Catalao Project run of mine diamonds in Antwerp after cleaning
The Company has now successfully listed on the TSX -V, under the ticker symbol STAR, and
looks forward to an aggressive work programme at its diamond projects across Brazil. This
will be the first of many announcements over the coming months and we look forward to
keeping shareholders updated on our progress as we move towards building a truly unique
Brazilian Diamond Company.
On behalf of the Board
Five Star Diamonds Limited
Matthew Wood
Chairman of the Board, President and CEO
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Qualified Person
Mr Paulo Ilídio de Brito
BSc Geology
Paulo de Brito is a geologist based in Brazil, has over 30 years of experience in the mining industry, dealing primarily
with gold, copper, nickel and industrial minerals. Paulo is a Principal of consulting group Brasgeo and was until recently
Exploration Manager of Paringa Resources Limited. Previously, he worked as a senior geologist with WMC Resources
Ltd for 18 years until the closure of their activities in Brazil in 2002.
Mr. de Brito, a member of AIG (Australian Institute of Geoscientists) and a member of AusIMM (The Minerals Institute)
and a Qualified Person as defined in National Instrument 43 -101, has reviewed and approved the scientific and
technical information contained in this press release.
Cautionary Note Regarding Forward-looking statements
Information set forth in this news release contains forward -looking statements. Although the Company believes that
such statements are reasonable, it can give no assurance that such expectations will prove to be correct. The Company
cautions investors that any forw ard-looking statements by the Company are not guarantees of future results or
performance, and that actual results may differ materially from those in forward looking statements as a result of
various factors, many of which are beyond the Company’s control. Such factors include, among other things: variations
in the nature, quality and quantity of any mineral deposits that may be located, significant downward variations in the
market price of any minerals produced, the Company’s inability to obtain any nece ssary permits, consents or
authorizations required for its activities, to produce minerals from its properties successfully or profitably, to continue
its projected growth, to raise the necessary capital or to be fully able to implement its business strategies. Accordingly,
actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and
expectations expressed or implied in the forward-looking information. Except as required under applicable securities
legislation, the Company undertakes no obligation to publicly update or revise forward-looking information.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS
DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information, please contact:
Five Star Diamonds Limited
Joe Burke, GM Marketing
Rajan “Raj” Rai, Investor Relations
+1 778 835 9200