Star Diamond Corporation currently holds, through a joint venture arrangement with Rio Tinto Exploration Canada, a 25% participating interest in certain Fort à la Corne mineral dispositions (including the Star-Orion South Diamond Project). Rio Tinto Exploration Canada (“RTEC”), a wholly-owned subsidiary of Rio Tinto, holds a 75% interest (See News Release dated December 9, 2021). These Fort à la Corne mineral dispositions are located in the Fort à la Corne provincial forest of central Saskatchewan, situated some 60 kilometres east of the city of Prince Albert, Saskatchewan, Canada. The Fort à la Corne provincial forest is an island forest, surrounded by agricultural land and urban development. Access to the Fort à la Corne area is provided by paved highways, a grid gravel road system and an extensive network of forestry roads, passable by four-wheel drive and high clearance two-wheel drive vehicles all year round. The vast extent of, and massive kimberlite volume contained in, the Fort à la Corne Field has been noted since the original discovery of these kimberlites in the late nineteen eighties.
Star Diamond Corporation also has an interest in the Buffalo Hills diamond project, located ~400km northwest of Edmonton, Alberta, Canada.
The Star-Orion South Diamond Project (the "Project") is located within the Fort à la Corne diamond district of central Saskatchewan, Canada. The Project is 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 Saskatchewan Ministry of Environment (“Ministry”) approved the Project under The Environmental Assessment Act, indicating the “The Star-Orion South Diamond Mine is a major development with the potential to bring jobs to the area and diversify Saskatchewan’s economy” (see News Release dated October 25, 2018). The Ministry indicated that they have conducted a thorough environmental assessment for the Project, including a detailed environmental impact statement, and carried out in-depth consultation prior to the decision to approve the Project. This included fulfilling the Province’s duty to consult with local First Nations and Métis communities. The Canadian Environment Assessment Agency previously announced a positive federal Environmental Assessment Decision for the Project (see News Release dated December 3, 2014).
During 2018, Star Diamond Corporation announced the positive results of the independent Preliminary Economic Assessment (“PEA”) on the Star and Orion South Kimberlites (see Star Diamond Corporation News Release dated April 16, 2018). 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.
The PEA is based on the Revised Mineral Resource Estimate as documented in the NI 43-101 Technical Report: Technical Report and Revised Resource Estimate for the Star – Orion South Diamond Project Fort a La Corne area, Saskatchewan, Canada December 21, 2015 3.
Other Project highlights:
The Fort à la Corne mineral dispositions are located in the Fort à la Corne provincial forest of central Saskatchewan. In the past Star Diamond and other companies have completed extensive exploration on these Fort à la Corne kimberlites, including geophysical surveys, pattern core drilling, large diameter drilling and microdiamond and macrodiamond analyses, which resulted in the documentation of geological models for a number of these bodies.
Geological models have been prepared for five partially evaluated Fort à la Corne kimberlites as well as the Star and Orion South Kimberlites (see Star Diamond Corporation News Release dated March 6, 2014).
Star Diamond Corporation and Canterra Minerals Corporation (formerly Diamondex Resources Limited) each hold a 50 percent interest in the Buffalo Hills project. The Buffalo Hills diamond project is located ~400km northwest of Edmonton, Alberta, Canada.
1. Cautionary note: The PEA was prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). Readers are cautioned that the PEA is preliminary in nature and includes the use of Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the results of the PEA will be realized.
2. Diamond-bearing kimberlite is produced from the mine and diamonds are recovered in the processing plant for 34 years. The overall project life is 38 years, which includes just over four years of pre-stripping activities.
3. During the fourth quarter of 2015, the Company announced Revised Mineral Resource estimates for the Star and Orion South Kimberlites (see Star Diamond Corporation News Release dated November 9, 2015 and Technical Report filed December 21, 2015). Accordingly, the mineral resources and economic assessment previously disclosed by Star Diamond Corporation for the Project should no longer be relied upon.