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Star Diamond Corporation (“Star Diamond” or the “Company”) today reported its financial results for the quarter ended September 30, 2022.
Star Diamond Corporation is a Canadian natural resource company focused on exploring and developing Saskatchewan’s diamond resources. Star Diamond holds, through a joint venture arrangement with Rio Tinto Exploration Canada Inc. (“Rio Tinto Canada”), a wholly-owned subsidiary of Rio Tinto plc or “Rio Tinto”, a 25% interest in certain mineral properties (which includes the Star – Orion South Diamond Project, or “Project”) within the Fort à la Corne diamond district of central Saskatchewan, Canada. These properties are in close proximity to established infrastructure, including paved highways and the electrical power grid, which provide significant advantages for future mine development. Rio Tinto Canada refers to their Fort à la Corne mineral properties as “Project FalCon”.
Fort à la Corne mineral properties
On June 28, 2022, Rio Tinto Canada exercised its voting power at a meeting of the Fort à la Corne joint venture management committee to place the Fort à la Corne properties on care and maintenance through December 31, 2022. Rio Tinto Canada also advised that, subject to fulfilling its existing obligations, it does not intend to commit additional capital to the Fort à la Corne properties during 2022 beyond what is necessary for care and maintenance. Rio Tinto Canada also advised the Company that it intends to conduct a near-term review of its alternatives regarding the Fort à la Corne properties, including its potential exit. During the meeting, Rio Tinto Canada stated that it remains pleased with the results of the comprehensive studies and bulk sampling program that have been completed to date at the Project.
Star Diamond continues to work with Rio Tinto Canada in assessing alternatives regarding the Project. These discussions remain at an early stage and there is no certainty that any agreement will be reached between Star Diamond and Rio Tinto Canada regarding any such potential arrangements.
For the quarter ended September 30, 2022, the Company recorded a net loss of $0.5 million or $0.00 per share (basic and fully diluted) compared to a net loss of $2.0 million or $0.00 per share for the same period in 2021. The losses during these quarters were due to operating costs and exploration and evaluation expenditures incurred by the Company exceeding interest income earned on cash and cash equivalents.
Year to Date Results
For the nine months ended September 30, 2022, the Company recorded a net loss of $2.1 million or $0.00 per share (basic and fully diluted) compared to a net loss of $5.2 million or $0.01 per share for the same period in 2021. The losses during the nine month periods ended September 30, 2022 and 2021 were primarily due to ongoing operating costs and exploration and evaluation expenditures incurred by the Company exceeding interest and other income earned. The decrease between periods was primarily due to lower consulting and professional expenditures and exploration and evaluation expenditures incurred as well as lower share-based payments expensed during the nine months ended September 30, 2022.
Selected financial highlights include:
|As at||As at|
|Condensed Consolidated Statements of Financial Position||September 30,||December 31,|
|Current assets||$||3.3 M||$||1.5 M|
|Exploration and evaluation, capital and other assets||66.7||M||67.9 M|
|Current liabilities||0.1||M||3.1 M|
|Non-current liabilities||0.9||M||1.1 M|
|Shareholders’ equity||69.0||M||65.2 M|
|Three Months||Three Months||Nine Months||Nine Months|
|Condensed Consolidated Statements of Loss||September 30,||September 30,||September 30,||September 30,|
|Interest and other income||$ 0.0M||$ 0.0M||$||0.0 M||$||0.0 M|
|Expenses||0.2 M||1.9 M||1.7 M||5.2 M|
|Investment in Wescan Goldfields Inc. and other items||(0.3) M||(0.1) M||(0.4) M||0.0 M|
|Net loss for the period||0.5 M||2.0 M||2.1 M||5.2 M|
|Net loss per share for the period (basic and diluted)||0.00||0.00||0.00||0.01|
|Quarter Ended||Quarter Ended|
|Condensed Consolidated Statements of Cash Flows||September 30,||September 30,|
|Cash flows from operating activities||$ (4.5) M||$ (4.3) M|
|Cash flows from investing activities||0.6||M||0.0 M|
|Cash flows from financing activities||5.7||M||1.9 M|
|Net decrease in cash||1.8||M||(2.4) M|
|Cash – beginning of period||1.3||M||4.7 M|
|Cash – end of period||3.1||M||2.3 M|
The provincial environmental approval of the Project received in 2018, alongside the previous positive federal decision, marked a major milestone for the Project. In addition, the positive results of the 2018 independent PEA show that the Project can be economically developed and operated while providing direct employment for hundreds of people throughout the construction phase and hundreds of people continuously over its estimated 38 year mine life.
Following the successful completion of the 2017 consolidation of the Fort à la Corne mineral properties, the arrangements announced in December 2021 were intended to ensure that key project milestones, and the certainty associated with them, will have been achieved before Star Diamond has to contribute any additional capital. Due to the June 2022 decision by Rio Tinto Canada to exercise its voting power to place the Fort à la Corne properties on care and maintenance through December 31, 2022 no additional exploration programs will occur on site in 2022. During the June 2022 meeting, Rio Tinto Canada also stated that it remains pleased with the results of the comprehensive studies and bulk sampling program that have been completed to date at the Project. Though the board of directors of Star Diamond is disappointed by these decisions, Star Diamond intends to work with Rio Tinto Canada in assessing alternatives regarding the Fort à la Corne properties.
As of November 10, 2022, the Company had approximately $3.0 million in cash and cash equivalents. A portion of the Company’s cash and cash equivalents will be used for programs (including remaining flow-through commitments) to further assess, evaluate and advance certain aspects of the Company’s mineral properties, as well as for general corporate matters.
About Star Diamond Corporation
Star Diamond is a Canadian based corporation engaged in the acquisition, exploration and development of mineral properties. Shares of the Company trade on the TSX under the trading symbol “DIAM”. The Fort à la Corne kimberlites (including 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, the Company announced the positive results of the independent PEA on the Project. The PEA estimates 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.
During 2018, the Saskatchewan Ministry of Environment approved the Project. The Canadian Environmental Assessment Agency previously announced a positive Environmental Assessment Decision for the Project by the federal Environment Minister.
For further information: [email protected] or (306) 664-2202
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