Stock Symbol: DIAM: TSX
SASKATOON, SK, Dec. 19,
2024 /CNW/ - Star Diamond Corporation ("Star Diamond"
or the "Company") would like to bring its shareholders up to date
on a number of Management initiatives:
Pre-Feasibility Study Financing
Following the
completion of our revised mineral resource update (Revised
Mineral Resources Estimate Exhibits Significant Increase Total
Indicated: 72 Million Carats, Total Inferred: 15 Million Carats,
July 24, 2024),
Star Diamond has been looking for
$3-5 million in project financing in
order to undertake a Pre-Feasibility Study on our Star - Orion
South Diamond Project (the "Project"). To date we have been
unsuccessful in this endeavor. A brief summary of these ongoing
efforts is noted below:
Royalty Companies
The Company reached out to over 20
royalty or streaming companies globally and responses fell under
two main categories:
- "Diamonds are not within our current mandate"
- "We do not have the resources to look at this project at the
present time"
Resource Project Bridge Debt Providers
Star Diamond had discussions with over 70
institutions engaged in providing pre-build resource financing and
received several market proposals. These proposals required the
provision of senior ranking security over our assets in order to
advance funding. However, security over all the Company's assets is
held by our previous joint venture partner as collateral for their
provision of the reclamation bond to the Province of Saskatchewan on our behalf. The secured party
was not willing to provide a security carve-out to allow the
Company to avail ourselves of these proposals.
Offtake Agreements
The Company engaged several
consultants to approach large diamond wholesalers/retailers across
the globe in search of financing through a commitment to provide
exclusive access to rough diamonds upon commencement of diamond
production at the Project. There was interest from this segment of
the diamond industry, but it was felt that an off-take agreement
was premature given the time horizon for diamond production.
Management continues to pursue these avenues in addition to
reaching out to wealthy individuals/groups in search of financing
for the prefeasibility study. While these efforts continue,
Management has undertaken several initiatives to lower our expense
profile and seek alternative financing solutions as below:
Asset Sales
- Star has entered into discussions with a heavy equipment
auctioneer to sell the Bauer Trench Cutter; they believe the sale
could realize some $4-6 million in
gross proceeds, of which 50% is payable to Rio Tinto under the
terms of the Exit Agreement; and
- Management has also been in discussions with a number of
critical minerals companies about the sale of the bulk sample plant
and the TOMRA x-ray sorter.
Cost Reduction
- We have moved our head office to a smaller footprint in the
same building resulting in 70% drop in our office lease
payments;
- All marketing and consulting contracts have been paused;
- The Board and the CEO have agreed to forgo compensation until
such time as the Company is on better financial footing; and
- Certain management functions will be reduced or
eliminated.
The Way Forward
Although Management of the Company
continues to talk to possible investors, it has determined that the
Project should be placed on a care and maintenance basis until such
time as the diamond market recovers from its current state of
malaise and the Company can raise the funds to complete the
pre-feasibility study. Early in the new year Star Diamond will need to raise funds to cover
care and maintenance costs until the above-noted asset sales can be
completed that will finance the Pre-Feasibility Study.
Early in 2024, our Chief Financial Officer ("CFO"), Rick Johnson, indicated he would be leaving
Star Diamond to focus on his other
executive position. To ensure the smoothest possible transition,
Mr. Johnson has advised the Company that he will be available to
the Company on a consultant basis. Accordingly, effective
January 1, 2025, the Company has
outsourced the CFO role to Carmello
Marrelli from Marrelli Support Services Inc.("MSSI") to
fulfill the CFO role as a part-time position. We look forward to
working with MSSI in the new year.
Ewan Mason, President & CEO
of the Company said "While 2024 was a great year for us in getting
back our former joint-venture partner's 75% share of the project,
along with a myriad of other assets, and increasing the Project
resource by nearly 30%, the diamond industry as a whole has not
fared so well. There does however appear to be the beginning of a
turn-around in the larger stone end of the market and that should
bode well for us going forward"
Mr. Mason also noted, "the Company is grateful for the work done
by Mr. Johnson over the past two years as Star Diamond navigated through unchartered
waters and thanks him for his service on behalf of the Board and
all shareholders".
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 100% interest in the Fort à la Corne
Project 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.
Stay Connected with Us:
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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
information is often, but not always, identified by the use of
words such as "anticipate", "believe", "expect", "plan", "intend",
"forecast", "target", "project", "guidance", "may", "will",
"should", "could", "estimate", "predict" or similar words
suggesting future outcomes or language suggesting an outlook. In
particular, statements regarding Star
Diamond's future operations, future exploration and
development activities or other development plans constitute
forward-looking statements. By their nature, statements referring
to mineral reserves or mineral resources constitute forward-looking
statements.
Forward-looking statements in this press release include but are
not limited to statements with respect to the Revised Mineral
Resources Estimate; improvement in the Mineral Resource estimate;
potential proceeds realized on the disposition of Project assets;
the Company will obtain adequate financing to fund care and
maintenance costs; and the aim of the Company to undertake a
Pre-Feasibility Study and timelines.
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, 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, changes in exploration, development or mining
plans due to exploration results and changing budget priorities of
Star Diamond, 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,
annual and interim MDA.
SOURCE Star Diamond Corporation
