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SASKATOON, Saskatchewan, June 21, 2021 – Star Diamond Corporation (“Star Diamond”) today provided an update on the ongoing litigation (the “Legal Proceedings”) between Star Diamond and Rio Tinto Exploration Canada Inc. (“Rio Tinto Canada”) in the Court of Queen’s Bench for Saskatchewan (Judicial Centre of Saskatoon) (the “Court”).
As previously disclosed, on June 4, 2021, the Court held a hearing in respect of the undertaking (the “Undertaking”) previously provided by Rio Tinto Canada to the Court. The Court reserved its decision, which is expected in the coming weeks.
Notwithstanding that the Court has not yet released its decision in respect of the Undertaking, on June 17, 2021, Rio Tinto Canada delivered a notice to Star Diamond purporting to call, for July 21, 2021, a meeting of the management committee of the joint venture that Rio Tinto Canada claims was previously formed between Star Diamond and Rio Tinto Canada. As previously disclosed, Star Diamond believes that no such joint venture has been formed because Rio Tinto Canada’s November 2019 purported exercise of its options under the Option to Joint Venture Agreement dated June 22, 2017 between Star Diamond and Rio Tinto Canada did not comply with that agreement.
The June 17, 2021 notice from Rio Tinto Canada indicates that Rio Tinto Canada will be seeking approval of a proposed budget for the period from June 2021 to March 2022 of Cdn. $17.8 million. The notice also indicates that Rio Tinto Canada will be seeking to add to that budget an aggregate of Cdn. $64.4 million allegedly spent by Rio Tinto Canada during 2019, 2020 and the first five months of 2021.
Star Diamond disagrees with the positions taken by Rio Tinto Canada in the June 17, 2021 notice. However, out of respect for the pending Court decision in relation to the Undertaking, Star Diamond currently intends to wait for the release of that decision before responding to such notice.
Star Diamond continues to vigorously pursue the Legal Proceedings and is committed to taking all actions necessary to protect Star Diamond and its shareholders from the practices and conduct of Rio Tinto Canada. Star Diamond will provide further updates in respect of these matters as developments warrant.
About Star Diamond Corporation
Star Diamond Corporation 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 Fort à la Corne kimberlites (including the Star – Orion South Diamond Project (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, Star Diamond announced the positive results of an independent Preliminary Economic Analysis (the “PEA”) on the Project. The PEA estimated 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 (see news release dated April 16, 2018).
All technical information in this press release has been prepared under the supervision of George Read, Senior Technical Advisor, 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, who are Star Diamond’s “Qualified Persons” under the definition of NI 43-101.
For further information: [email protected] or (306) 664-2202
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