Name of the Project
Star-Orion South diamond project.

Location
Fort à la Corne diamond district of central Saskatchewan, Canada.

Project Owner/s
Fort à la Corne Joint Venture (JV) comprising exploration and development company Star Diamond Corp and Rio Tinto Exploration Canada.

Project Description
A preliminary economic assessment (PEA) has determined that an estimated 66-million carats of diamonds could be recovered from a surface mine over a 34-year life-of-mine.

The PEA envisages the development of two openpits, initially Orion South, followed by Star, using conventional openpit methods.

Conventional hydraulic excavators and haul trucks create a starting “key” for three bucket wheel excavators to remove the sand and clay overburden from the kimberlite. Conveyor belts will transfer the sand and clay from the excavators to the nearby overburden waste area. The exposed kimberlite will be lightly blasted and conventional hydraulic shovels will load the rock into trucks. These trucks will transfer the rock to an in-pit feeder and the kimberlite will be delivered to the processing plant using a conveyor belt.

The processing facility will have the capacity to process 45 000 t/d of kimberlite using autogenous milling, followed by screening, X-ray transmission diamond recovery and dense-media separation of heavy mineral concentrate.

The recovery section will use X-ray technology, with grease as the scavenging technology to recover the low-luminescence diamonds. The diamonds will be sorted into parcels at the on-site sorting facility.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a 7% discount rate, of $2-billion and an internal rate of return of 19%, with a payback of 3.5 years after the start of construction.

Capital Expenditure
Preproduction capital expenditure is estimated $1.41-billion.

Planned Start /End Date
The company is aiming to complete the feasibility study by end of 2026 and hopes to have shovels in the ground within three to five years, subject to financing, permitting and updated environmental approvals.

Latest Developments
Star Diamond will raise up to C$4.8-million from Luxembourg-based Spirit Resources as the company aims to advance diamond project.

The miner announced a C$4-million private placement and an interim C$800 000 unsecured loan from Spirit on May 23, which is ultimately controlled by mining entrepreneur Jean-Raymond Boulle. The funding will be used for working capital and general corporate purposes, and to progress a prefeasibility study.

Under the private placement, Spirit will subscribe for 133.3-million units at C$0.03 each. Each unit comprises one common share and one warrant. The warrants are exercisable at C$0.04 for the first 12 months, and C$0.05 thereafter for a total of 24 months, with a potential one-year extension if Star Diamond does not raise a further C$3-million within that timeframe.

Upon completion, Spirit’s stake in the company will increase to 25.82% on a nondiluted basis and 36.97% on a partially diluted basis, triggering provisions under the TSX company manual and the firm’s shareholder rights plan.

As part of the agreement, Spirit will gain the right to nominate two directors to Star Diamond’s board, with an option to nominate a third and select the board’s chairperson if it exercises all warrants. A special shareholder meeting will be called to approve the transaction, which includes waiving the shareholder rights plan and enabling Spirit to “materially affect control” of the company.

Star Diamond has entered into a voting support agreement with Rio Tinto Exploration Canada, which has agreed not to vote against the key proposals at the upcoming shareholder meeting.

The deal is subject to shareholder and regulatory approvals, including from the TSX. The outside date for completion is set for August 29.

Key Contracts and Suppliers
SGS Canada, DRA Americas and ENGCOMP Engineering and Computing Professionals (PEA).

Contact Details for Project Information
Star Diamond Corp, tel +1 306 664 2202 or email stardiamondcorp@stardiamondcorp.com.