Five STAR Diamonds Enters Agreement to Commence Drilling at TWO Key Projects
1 | Page
TSX-V STAR
Market Release
17 April 2018
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
+1 778 835 9200
Directors / Officers:
Matthew Wood
Jeremy South
Luis Azevedo
Aneel Waraich
Max Jahn
Gizman Abbas
Nicholas Pike
TSXV: STAR
FIVE STAR DIAMONDS ENTERS
AGREEMENT TO COMMENCE
DRILLING AT TWO KEY PROJECTS
Toronto, ON - Five Star Diamonds Limited (TSXV: STAR) (the
“Company” or “Five Star Diamonds”) is pleased to announce that
the Company has reached an agreement to commence up to 5,200
meters of drilling at two of its key kimberlite projects in Brazil. The
Company will issue shares to the drilling contractor in lieu of cash
payments.
Highlights
Ø Five Star Diamond s to issue shares as
consideration for up to 5,200 meters of diamond
core drilling at the Maravilha and Catalao
Kimberlite Diamond Projects.
Ø Approximately 3,200 meters of drilling is planned
to test the recently discovered M3 kimberlite at the
Maravilha Diamond Project, with the aim of
defining the initial tonnage potential of the M3
kimberlite.
Ø A further 2,000 meters of drilling is planned to test
16 high priority targets at the Catalao Diamond
Project.
Ø This equity based contract with one of South
America’s leading drilling companies is a testament
to the value of the kimberlite diamond projects at
Catalao and Maravilha.
2 | Page
“We are delighted to be initiating an important drilling program at Maravilha, where
previous sampling has demonstrated the highly prospective nature of the project,” said
Matthew Wood, Chairman of Five Star Diamonds. “This equity based contract with one of
South America’s leading drilling companies is a testament to the value of our two
kimberlite diamond projects at Catalao and Maravilha.”
Five Star Diamonds will issue Company shares to its drilling contractor, in lieu of
estimated cash payments of R$1,831,350 (approximately CA$700,000) for drilling
services, including up to 5,200 meters in drilling.
The issuance of shares will enable Five Star Diamonds to conserve cash as the Company
plans to define the initial tonnage potential of the M3 Kimberlite at the Maravilha
Diamond Project, and, to test 16 high priority targets selected based on previous ground
magnetic and auger drilling results at the Catalao Diamond Project.
The shares will be issued upon the completion of the contract at a price calculated based
on an average VWAP over the previous 30 days before and after the completion of the
contract. The shares will be subject to a 12 month lock up agreement after they are issued.
The issuance of shares under this arrangement will be subject to the prior approval of the
TSX Venture Exchange.
DRILLING AT MARAVILHA DIAMOND PROJECT
Five Star Diamonds recently announced results of a sampling program to test the M3
kimberlite pipe at the Maravilha Diamond Project. A total of 658 macro and
microdiamonds were recovered.
The M3 kimberlite pipe lies within the Sao Francisco Craton and is hosted by Archean
meta granites and meta basalts. A ground magnetic survey indicated that the M3
kimberlite pipe has a strong magnetic response suggesting an ovoid shape measuring
approximately 130 by 65 meters with the major axis aligned along a northeast southwest
direction.
Approximately 3,200 meters of diamond core drilling, distributed across 30 drill holes, is
planned in the upcoming programme. All drill holes will be angled at 60 degree
inclinations. The depth of the drill holes will range from 30 meters up to 190 meters with
the aim of investigating the M3 kimberlite pipe to a vertical depth of 160 meters. The M3
kimberlite outcrops at surface. The drilling programme will use two drill rigs (type Mach
320). All drill holes will be drilled using a HQ (63.5mm) diameter to provide enough
material for further diamond sampling and analysis.
Drilling is expected to commence initially at the Maravilha Project in the coming weeks.
Once completed at Maravilha the drill rigs will be mobilized to the Catalao Project.
DRILLING AT CATALAO DIAMOND PROJECT
The drilling programme for the Catalao Diamond Project aims to investigate 16 high
priority targets selected based on previous ground magnetic and auger drilling results. A
total of 36 diamond core drill holes are planned for approximately 2,000 meters. The
holes will be vertical and will use a HQ (63.5mm) diameter.
3 | Page
High Priority Drill Targets at the Catalao Diamond Project
ABOUT FIVE STAR DIAMONDS
Five Star Diamonds is listed on the TSX Venture Exchange under the ticker symbol
STAR. The Company controls a dominant and highly enviable position in the Brazilian
kimberlite diamond sector owning 23 diamond projects comprising an aggregate of 49
exploration licences.
To date, the Company has conducted exploration programs on seven projects with the
Catalao, Maravilha, Riachao, Jaibaras and Verissimo Projects proven to contain diamond
bearing kimberlites.
Five Star Diamonds 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
4 | Page
Company works closely with local, state and federal authorities in Brazil to foster an open,
transparent and legal diamond industry in Brazil.
This release is an update by the Company on its 100% owned Maravilha Diamond Project
and its 100% owned Catalao Diamond Project. It is expected that the company will be
able to provide further updates on these and its other Projects over the coming months
and we look forward to keeping shareholders informed of our progress as we move
towards building a truly unique Brazilian Diamond Company.
Qualified Person
Mr Paulo Ilídio de Brito
BSc Geology
Mr. 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, iron, industrial minerals and
more recently diamonds. Mr. Brito 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.
The exploration activities and their related results included in this announcement were
directly supervised and managed by Mr. Brito. According to Mr. Brito, all exploration
work carried out to date on the Projects mentioned in this release follow clear mining
industry standards.
Mr. Brito, is a member of AIG (Australian Institute of Geoscientists), a professional
geologist of CREA-RJ (Conselho Regional de Engenharia e Agronomia) and a Qualified
Person as defined in National Instrument 43-101. Mr. Brito reviewed and approved the
scientific and technical information contained in this press release.
On behalf of the Board
Five Star Diamonds Limited
Matthew Wood
Chairman of the Board
5 | Page
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 forward-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 necessary 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
+1 778 835 9200
John Vincic, Principal
Vincic Advisors
+1 647 402 6375
www.vincicadvisors.com