TSX: DIAM
SASKATOON, SK, Dec. 4, 2023
/CNW/ - Star Diamond Corporation (TSX: DIAM) ("Star Diamond" or the
"Company") is pleased to announce that, subsequent to the
recently announced transaction with Rio Tinto Exploration Canada
Inc. ("RTEC") whereby Star Diamond
has agreed to acquire all of RTEC's interest in the Fort à la
Corne Joint Venture, Star Diamond's technical team is once again now
focussed on the technical investigation and evaluation of the Star
– Orion South Diamond Project, with the aim of a future development
decision. The initial work aims to prepare a revised Mineral
Resource estimate for the Star – Orion South Diamond Project, which
will form the foundation of an updated Pre-Feasibility ("PFS")
study. The PFS study will enable a Feasibility Study, on
which a production decision can be based.
Highlights
- The revised Mineral Resource estimate for the Star
and Orion South kimberlites will integrate Star trench cutter
diamond data, adding improvement to the diamond size frequency
curves for both kimberlites.
- The mitigation of risk in the Orion South diamond price
estimate: the 2018 Preliminary Economic Assessment ("PEA")
demonstrated that it is economically efficient to mine the Orion
South kimberlite first. However, Orion South has a significantly
smaller evaluation diamond parcel than Star, adding some risk to
the diamond price estimate for Orion South. We believe there is
opportunity to mitigate the risk in the Orion South diamond price
estimate, without the necessity of additional bulk sampling to
obtain a larger diamond evaluation parcel.
- The scoping of an updated PFS is scheduled to commence
early in Q1 2024.
- These developments will likely give rise to the ability to
complete the updated PFS within a two-year time frame and
the Feasibility Study shortly thereafter. We anticipate
these major studies will be completed at a substantially lower
expenditure level than was previously contemplated.
Revised Mineral Resource
Estimate
The aim of the revised mineral resource estimate is to integrate
all of the drilling and diamond results recently generated by the
Fort à la Corne Joint Venture, with
archival data used to build the geological model, which forms the
basis of the mineral resource estimate. Importantly, the
diamond parcels recovered from the ten Trench Cutter ("TC") holes
drilled on the Star kimberlite were recovered in an efficient,
modern Bulk Sampling Plant ("BSP") that ensures excellent diamond
liberation and recovery. The BSP includes High Pressure Grinding
Rolls that ensure liberation of the small diamonds (1-6 millimetre)
locked in kimberlite, that are subsequently recovered by an
efficient Dense Media Separator that operates in the same narrow 1
to 6 millimetre size range. The small diamonds (+1, +3 and +5 DTC)
from the Early Joli Fou ("EJF") kimberlite unit of both Star and
Orion South include significant proportions of D coloured
octahedral diamonds, which have significant value (US$30 -US$50 per
carat), which is unusually high for these small diamonds. The
integration of the TC diamond data in the evaluation parcel aims to
strengthen the diamond grade and price used in the Mineral Resource
estimate. The aim of this work is to prepare a rigorously
constrained Mineral Resource estimate by the end of Q2 2024. This
revised Mineral Resource estimate will provide an improved
foundation for the revised PFS.
Orion
South Diamond Price
Orion South has shallower overburden (Orion South 100 metres,
Star 140 metres) and higher diamond grade (Orion South 17 cpht,
Star 10 cpht) kimberlite in direct contact with overburden, both of
which ensure more rapid access to cash flow after overburden
removal in a future mine. Consequently, the PEA demonstrated that
it is economically efficient to mine Orion South first. However,
there is a significant difference in the size of the evaluation
diamond parcels recovered from the EJF, the principal economic unit
in both Star and Orion South. The Orion South evaluation parcel
includes only 1,399 carats, as opposed to the Star EJF parcel of
7,122 carats. In order to commence mining on Orion South, the risk
associated with the estimation of diamond price on a smaller
evaluation parcel needs to be mitigated. We believe that the
close similarities of the kimberlite geology and diamond parcel
characteristics for Star and Orion South can enable better
estimation of the Orion South diamond price. We have developed a
plan to conduct an in-depth investigation of the extent of
similarities between the Star and Orion South EJF diamond
populations, with the aim of mitigating the risk in the estimation
of the diamond price for the Orion South EJF diamond parcel. The
goal of this investigation is to accurately estimate the Orion
South diamond price without the requirement of additional bulk
sampling, which is both expensive and time consuming. The
confidence generated in the Orion South diamond price will add to
the precision of the mineral resource estimate.
Updated PFS
The scoping of an updated PFS is scheduled to commence early in
2024 with the initial work focussed on updating the hydrogeology
and geotechnical models, in addition to the management of fines in
plant process water. Changes in environmental legislation, since
the PEA, require that deep groundwater pumped from the Mannville sediments to stabilize the open pits
of a future mine will require a revised method of disposal.
Geotechnical work will focus on the engineering of pit slopes,
particularly in parts of the overburden, to ensure steeper pit
slopes and, consequently, a significant reduction in overburden
removal. The processing of some Orion South kimberlite results in
plant process water from which the fines do not settle quickly or
easily. Investigations will be made into the mechanical separation
of the fines and the future of a fines management area, as this
will minimize the use of "tailings ponds". Significant parts of the
work completed for the 2018 PEA, including the mining method,
process plant design, site layout and infrastructure, can be
updated and incorporated into the updated PFS.
Senior VP Corporate Development Star Diamond, George Read, states: "The revised mineral
resource estimate will potentially provide an improved foundation
on which a well constrained updated PFS can be built. It is
estimated that some $3 million in
flow-through funding is required for 2024 to cover the revised
resource estimate, the technical team expenses, scoping of the PFS,
overall site management and environmental compliance. An additional
financing of at least $3 to
$5 million is required to cover the
costs of the updated engineering work required by the PFS in the
latter part of 2024 and early 2025."
RTEC Transaction
Star Diamond and RTEC have
entered into an agreement dated November 28,
2023 (the "Agreement") which provides, subject to the terms
and conditions set forth therein, for Star
Diamond's acquisition of RTEC's interest in the Fort à la
Corne Joint Venture. Completion of
the transactions contemplated by the Agreement is subject to
various closing conditions including receipt of all required
Governmental approvals and the approval of the Toronto Stock
Exchange for the issuance of additional common shares of
Star Diamond to RTEC.
All technical information in this press release has
been prepared under the supervision of George Read,
Senior Technical Advisor to Star Diamond, 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 and Alberta, who are the Corporation's "Qualified
Persons" under the definition of NI 43-101.
About Star Diamond
Corporation
Star Diamond 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's most significant asset
is its interest in the Fort à la Corne property in central
Saskatchewan. These kimberlites are located in close proximity
to established infrastructure, including paved highways and the
electrical power grid, which provide significant advantages for
future mine development.
For further information, please
contact:
Phone: (306) 664-2202
Email: stardiamondcorp@stardiamondcorp.com
Website www.stardiamondcorp.com
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Caution Regarding
Forward-looking Statements
This press release contains "forward-looking statements" and/or
"forward-looking information" (collectively, "forward-looking
statements") within the meaning of applicable securities
legislation. All statements, other than statements of historical
fact, are forward-looking statements. The use of any of the words
"anticipate", "plan", "aim", "target", "contemplate", "continue",
"estimate", "expect", "intend", "propose", "might", "may", "will",
"shall", "project", "should", "could", "would", "believe",
"predict", "forecast", "pursue", "potential", "possible", "capable"
and similar expressions are intended to identify "forward-looking
statements. Forward-looking statements in this press release
include, but are not limited to, expectations regarding the
completion of the transactions that are the subject of the
Agreement and the Project's potential to be a significant
contributor to both the local communities and the broader
Saskatchewan economy.
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 including, but not limited to,
the impact of changes in the laws and regulations regulating mining
exploration, development, closure, judicial or regulatory judgments
and legal proceedings and the additional risks described in
Star Diamond's most recently filed
Annual Information Form, annual and interim MD&A.
Although management of Star
Diamond considers the assumptions contained in
forward-looking statements to be reasonable based on information
currently available to Star Diamond,
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.
Star Diamond does not undertake
any obligation to release publicly revisions to any forward-looking
statement to reflect events or circumstances after the date of this
release, or to reflect the occurrence of unanticipated events,
except as may be required under applicable securities laws.
Investors should not assume that any lack of update to a previously
issued forward-looking statement constitutes a reaffirmation of
that statement. Continued reliance on forward-looking statements is
at investors' own risk.
SOURCE Star Diamond Corporation