The Fort a la Corne diamond project remains in care and maintenance.  (File photo/Rio Tinto)

By Doug Lett

Looking For Investors

Star Diamond headed to mining show to spark interest

Jan 20, 2023 | 5:00 PM

Star Diamond Corporation is sending a delegation to a major mining show in Toronto in March.

The company is hoping to spark interest in the Fort a la Corne diamond project, about 60 kilometers east of Prince Albert.

Interim CEO Ewan Mason said bluntly they are looking for new investors, but he says the time is right.

“Frankly in discussion with a bunch of investors last week, it was clear to me that some didn’t even know we had finished, polished diamonds from the deposit,” said Mason.

He said so far around 160,000 diamonds have been found at the project, which goes back decades.

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“It’s been generations since we found the first diamonds there, and that’s what really struck me as bizarre, we have generations of people in the (diamond) business that don’t even know, let alone that we have a deposit, that we actually have these beautiful diamonds in it,” said Mason. “And so it just occurred to me that if we are almost back to square one, then we should be treating it like that and letting people know just exactly what it is that we have.”

Rough diamonds from the Fort a la Corne diamond project. (Star Diamond Corporation)

The “square one” Mason is referring to is the announcement by Star’s partner Rio Tinto last year that it was placing the project into care and maintenance mode – and might be looking to exit.

Rio Tinto, a major mining company, has the majority interest in the project, so that leaves Star Diamond without the ability to move forward until a decision is made.

Mason explained in an ideal world, he is hoping Star Diamond will get back control of the project this year.

“Then it would be our number one priority to do a feasibility study, and once we’ve done that go out and seek partners to help build this mine, which is a world-class mine just aching to be built,” he said.

He’s not alone in using the phrase “world-class.” Paul Zimnisky, a diamond analyst based in New York, is not writing the project off.

“It’s huge, it’s potentially world-class in size,” said Zimnisky, with Paul Zimnisky Diamond Analytics. “And because it’s so huge it requires a partner that has experience working with very large projects and has the capital budget to spend the money to put it into production.”

However, Zimnisky cautioned there are several factors at play. A big one is diamond prices. He said if prices continue to go up, that will make the project more attractive.

“If you look at price trajectory over the last five years it’s headed in the right direction…the other side of that is that costs to operate a mine or develop a mine have gone up quite dramatically given that we’ve seen inflation across pretty much every material, every product, every service,” he said.

Another factor may be finding partners with a strong focus on diamonds.

“It’s big enough that it’s attracted major players, but for most of these major players diamonds are just not a priority, it’s a small percentage of their business,” said Zimnisky.

For now, a lot remains up in the air. Mason noted discussions continue with Rio Tinto about getting back control of the project.

“They’ve been very receptive, but these things take time,” he said.

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doug.lett@pattisonmedia.com

Twitter: @DougLettSK