TSX: DIAM
SASKATOON, SK, May 11, 2023
/CNW/ - Star Diamond Corporation ("Star Diamond" or the
"Company") reports that the unaudited financial results for the
quarter ended March 31, 2023, will be
filed today on SEDAR and may be viewed at www.sedar.com once
posted.
Overview
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, a 25% interest in certain mineral
properties (which includes the Star – Orion South Diamond Project,
or the "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.
The Company also holds a 50% interest in the exploration and
evaluation properties and assets of the Buffalo Hills-JV located in
north-central Alberta, Canada.
Canterra Minerals Corporation ("Canterra") holds the remaining 50%
interest. Canterra is the operator of the Buffalo Hills-JV.
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 Project on care and maintenance
through December 31, 2022. Rio Tinto
Canada also advised that, subject to fulfilling its existing
obligations, it did not intend to commit additional capital to the
Fort à la Corne properties during 2022 beyond what was
necessary for care and maintenance. Rio Tinto Canada also advised
Star Diamond that it intended to
conduct a near-term review of its alternatives regarding the Fort
à la Corne properties, which included its potential
exit. On October 21, 2022,
Star Diamond announced that Rio
Tinto Canada had stated that it intended to fully de-mobilize the
leased on-site camp. During the quarter, the site was fully
de-mobilized and the Project was placed on care and
maintenance.
Recent activities relating to the Star - Orion South Diamond
Project and Fort à la Corne mineral properties
During the
quarter ended March 31, 2023, the
Company continued negotiations with Rio Tinto Canada to assess
alternatives regarding the Project.
Recent activities relating to the Buffalo Hills mineral
properties
In February 2023,
the Company announced the completion of the diamond valuation from
the K6, K14, K91 and K252 kimberlites of the Buffalo Hills-JV.
Diamond valuations and characterizations as shown in the table
below were completed by Mr. Nelson
Karun, Diamond Specialist, Saskatchewan Research Council
Diamond Services, on behalf of Star
Diamond.
Kimberlite
|
Carats
|
Stones
|
% Gem
Quality
|
% White
Colour
|
Faint to no
Fluorescence
|
Average US$/Ct
Parcel
|
Model
Price
(US$/ct)
|
K6
|
16.73
|
86
|
29.5
|
70.5
|
82.9
|
103.54
|
185*
|
K14
|
69.32
|
1,362
|
17.9
|
73.8
|
92.6
|
54.32
|
160
|
K91
|
4.17
|
103
|
17.9
|
54.6
|
89.7
|
53.61
|
N/A
|
K252
|
12.41
|
328
|
22.0
|
82.1
|
92.1
|
72.79
|
140*
|
*Very speculative due to the small sample size
|
As observed by Mr. Karun, diamonds from these kimberlite bodies
exhibit good quality, colour and very
low to no fluorescence. All the parcels
of diamonds appear
to be statistically very similar
in terms of their graded characteristics. There is
an inadequate sample size for K91 to model the average diamond
price. Extremely speculative model prices are given for samples K6
and K252, due to the small parcel size. K14 is a larger parcel
size, and a price can be modeled, but should still be used with
caution.
The diamond valuation exercise has shown that
kimberlites K14 and K6 have elevated modelled
diamond prices, US$ 160 per carat and
US$ 180 per carat, respectively. The
K6 parcel includes three fancy
yellow stones, the K14 four fancy yellow
and the K252 a fancy orange stone. The two
highest value stones, which
are both from the K6, are 1.06 carats
(US$ 532) and 1.07 carats (US$ 506).
These four kimberlites have diamond parcels with sufficient
diamonds to conduct preliminary diamond typing studies. The number
and the percentage of Type IIa diamonds for the Buffalo Hills
kimberlites studied are documented in the table below and show
these kimberlites have an anomalously high percentage of Type IIA
diamonds.
Diamonds +3 DTC (0.026 carats) to 5
Grainer (1.2 carats)
|
|
Number of
Diamonds Typed
|
Number of Type IIa
Diamonds
|
Percentage Type IIa
Diamonds
|
K6 +3 (0.026
ct) & above
|
78
|
4
|
5.1
|
K14 +7 (0.12 ct) &
above
|
126
|
3
|
2.4
|
K91 +3 (0.026 ct) &
above
|
47
|
3
|
6.4
|
K252 +3 (0.026
ct) & above
|
153
|
7
|
4.6
|
The diamond typing exercise has shown presence of Type IIa
diamonds, in elevated proportions, in all four of these Buffalo
Hills kimberlites. The diamonds analysed represent a spectrum of
diamond sizes from +3 DTC (+0.026 carats) to 5 grainer (1.2
carats).
Type IIa diamonds are very rare and generally account for less
than 2 percent of all natural rough diamonds mined world-wide from
kimberlite deposits. Only a small number of active diamond mines
regularly produce Type IIa diamonds with the most important of
these mines being Cullinan Diamond
Mine in South Africa,
Letseng Diamond Mine in the Kingdom of Lesotho and, more recently, Karowe Diamond
Mine in Botswana.
Year to Date Results
For the quarter ended
March 31, 2023, the Company recorded
a net loss of $0.3 million, or
$0.00 per share (basic and fully
diluted), compared to a net loss of $0.9
million, or $0.00 per share,
for the comparative period in 2022. The decrease in net loss was
due primarily to reduced expenditures, period over period, combined
with a $0.3 million non-cash gain on
the fair value measurement of the Company's marketable
securities.
At March 31, 2023 the Company had
$1.5 million (December 31, 2022 – $2.6
million) in cash and cash equivalents and working capital of
$1.3 million (December 31, 2022 - $2.0
million). The decrease in working capital was a result
of general and administrative and exploration and evaluation
expenditures incurred during the quarter. The Company believes it
has sufficient liquidity to fund general and administrative costs
and certain exploration expenditures through to the end of
2023.
Selected financial highlights include:
Condensed
Consolidated Statements of Financial Position
|
As at
March
31,
2023
|
As at
December
31,
2022
|
Current
assets
|
$ 1.8
M
|
$ 2.7
M
|
Investments and other
assets
|
0.6 M
|
0.4 M
|
Current
liabilities
|
0.4 M
|
0.7 M
|
Shareholders'
equity
|
2.0 M
|
2.4 M
|
Condensed
Consolidated Statements of Loss
|
Quarter
Ended
March 31,
2023
|
Quarter
Ended
March 31,
2022
|
Interest and other
income
|
$
- M
|
$
- M
|
Expenses
|
0.6 M
|
0.7 M
|
Loss before undernoted
items
|
0.6 M
|
0.7 M
|
Investment in Wescan
Goldfields Inc.
|
(0.3) M
|
0.2 M
|
Net loss for the
period
|
0.3 M
|
0.9 M
|
Net loss per share for
the period (basic and diluted)
|
0.00
|
0.00
|
Condensed
Consolidated Statements of Cash Flows
|
Quarter
Ended
March 31,
2023
|
Quarter
Ended
March 31,
2022
|
Cash flows (used in)
from operating activities
|
$
(1.1) M
|
$ 1.1
M
|
Cash flows from
investing activities
|
- M
|
- M
|
Cash flows from
financing activities
|
- M
|
0.5 M
|
Net increase (decrease)
in cash
|
(1.1) M
|
1.6 M
|
Cash – beginning of
period
|
2.6 M
|
1.3 M
|
Cash – end of
period
|
1.5 M
|
2.9 M
|
Outlook
Fort à la Corne mineral
properties
Star Diamond
continues to work with Rio Tinto Canada in assessing alternatives
regarding the Project. These discussions remain ongoing and there
is no certainty that any agreement will be reached between
Star Diamond and Rio Tinto Canada
regarding any such potential arrangements. Management
believes that the negotiated return of the Project on reasonable
terms is critical to its long-term success.
Buffalo Hills mineral properties
Management continues
to review the recent results from the diamond valuation and typing
analysis. Discussions are ongoing with Canterra to determine
possible future work programs and a potential strategic path
forward for the property. A more detailed update on activities at
the Buffalo Hills-JV will be provided as it becomes available.
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 holds, through a joint
venture arrangement with Rio Tinto Canada, a 25% interest in
certain Fort à la Corne kimberlites (including the Star – Orion
South Diamond Project). These properties 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. The Company also holds a 50% interest in
the exploration and evaluation properties and assets of the Buffalo
Hills-JV located in north-central Alberta, Canada. Canterra Minerals Corporation
("Canterra") holds the remaining 50% interest. Canterra is the
operator of the Buffalo Hills-JV.
Technical Information
All technical information in
this press release has been prepared under the supervision of
George Read, Senior Technical
Advisor, Professional Geoscientist in the Provinces of Saskatchewan and British Columbia and Mark Shimell, Project Manager, Professional
Geoscientist in the Province of Saskatchewan and Alberta, who are the Company's "Qualified
Persons" under the definition of NI 43-101.
Stay Connected with Us:
Twitter:
https://twitter.com/StarDiamondCorp
LinkedIn: https://www.linkedin.com/company/star-diamond-corp
Facebook:
https://www.facebook.com/people/Star-Diamond-Corp/100058096376664/
Instagram: https://www.instagram.com/stardiamondcorp/
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. Forward-looking statements in
this press release include, but are not limited to, Star Diamond's assessment of its cost and
management structure going forward.
These forward-looking statements are based on Star Diamond's current beliefs as well as
assumptions made by and information currently available to
Star Diamond 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, statements
regarding Rio Tinto Canada's future plans and intentions including
with respect to the Fort à la Corne mineral properties; the
Company's management structure, developments in world diamond
markets, changes in diamond prices, risks relating to fluctuations
in the Canadian dollar and other currencies relative to the US
dollar, the impact of changes in the laws and regulations
regulating mining exploration, development, closure, judicial or
regulatory judgments and legal proceedings, operational and
infrastructure risks and the additional risks described in
Star Diamond's most recently filed
Annual Information Form, and annual and interim MDA.
SOURCE Star Diamond Corporation