TSX: DIAM
SASKATOON, SK, Nov. 28,
2023 /CNW/ - Star Diamond Corporation
("Star Diamond") is pleased
to announce that it has today entered into a binding agreement (the
"Agreement") with Rio Tinto Exploration Canada Inc.
("RTEC"), providing for the transfer by RTEC to Star Diamond of all of RTEC's 75% interest in
the Fort à la Corne diamond project located in central Saskatchewan (the
"Project").
The Agreement provides that, upon closing:
- RTEC will transfer to Star
Diamond all of RTEC's 75% interest in the Project, such that
the Project will be 100% owned by Star
Diamond;
- RTEC will transfer to Star
Diamond ownership of the trench cutter drill rig used by
RTEC to complete its prior bulk sampling program at the
Project;
- RTEC will transfer to Star
Diamond the Bulk Sample Plant located at the Project,
including the TOMRA XRT diamond sorting machine that is
on-site;
- Star Diamond will issue to RTEC
and/or an affiliate that number of common shares of Star Diamond that results in RTEC and its
affiliates owning 19.9% of the then outstanding common shares of
Star Diamond (RTEC and its
affiliates currently own approximately 2.3% of Star Diamond's outstanding common shares);
and
- RTEC and Star Diamond will enter
into an Investor Rights Agreement whereby, among other things, RTEC
will be granted certain pre-emptive rights to maintain its 19.9%
ownership interest in Star Diamond
in connection with future financings undertaken by Star Diamond, and RTEC will agree to certain
standstill protections provided that RTEC will have the right to
increase its 19.9% ownership position in the event that
Star Diamond receives an acquisition
proposal.
"Acquiring 100% ownership of the Project will be a major
accomplishment for Star Diamond and
its shareholders. We are grateful to Rio Tinto for the
significant monetary investment and expertise it has contributed to
the Project over the past more than five years, which has
meaningfully advanced what Star
Diamond believes is one of the most promising diamond
projects in the world," said Ewan
Mason, President and Chief Executive Officer of Star Diamond.
Rio Tinto Head of Exploration, Dave
Andrews said, "The majority of Rio Tinto's global
exploration program is now firmly focused on metals and minerals to
support the energy transition. Although we will no longer have
direct involvement in the Project, we are pleased to be able to
maintain our interest in the Project by gaining a 19.9% ownership
interest in Star Diamond.
After more than five years, we continue to see potential in
the Project and believe it can be a significant contributor to both
the local communities around the Fort à la Corne property and the
broader Saskatchewan economy."
Upon completion of the transactions that are the subject of the
Agreement, Star Diamond will have
full control and responsibility for the Project, the existing joint
venture agreement between RTEC and Star
Diamond will terminate, and Star
Diamond will release and indemnify RTEC for liabilities
arising from or relating to the Project, all in exchange for a Cdn.
$4 million payment from RTEC to
Star Diamond. RTEC has agreed
that it will provide on Star
Diamond's behalf, for up to five years following closing,
letters of credit in the aggregate amount of no more than Cdn.
$9.9 million to secure certain
environmental remediation and reclamation obligations related to
the Project. Star Diamond will
be obliged to repay any amounts drawn on these letters of credit
and such repayment obligations will be secured against the Project
and its assets.
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.
A copy of the Agreement will be available under Star Diamond's profile on SEDAR+ at
www.sedarplus.ca and on Star
Diamond's website at www.stardiamondcorp.com. The
summary of the Agreement outlined above is qualified in its
entirety by the full text of the Agreement, and reference should be
made to the Agreement for its full terms and conditions.
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.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered
in the UK, combining Rio Tinto plc, a London and New York Stock Exchange listed
company, and Rio Tinto Limited, which is listed on the Australian
Securities Exchange. Rio Tinto's business is finding, mining, and
processing mineral resources. Major products are iron ore,
aluminium, copper, molybdenum, gold, and industrial minerals
(borate, titanium dioxide and salt). Activities span the world and
are strongly represented in Australia and North
America with significant businesses in South America, Asia, Europe,
and southern Africa.
Webinar on Wednesday November 29,
2023, at 1:00pm
EDT:https://events.6ix.com/preview/star-diamond-market-update
For further information, please contact:
Phone: (306) 664-2202
Email: stardiamondcorp@stardiamondcorp.com
Website www.stardiamondcorp.com
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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 is not affirming or
adopting any statements attributed to Rio Tinto in this release or
made by Rio Tinto outside of this release. 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