Examples of some of the many rough diamonds found at the Star Diamond project. Courtesy Star Diamond Corporation.

By Doug Lett

Star Diamond Hopeful

Star Diamond hopeful for better 2023

Apr 6, 2023 | 5:00 PM

The CEO of the Star Diamond project near Prince Albert said he is hopeful the company will make headway in 2023.

“It’s a crime for this mine not to get developed,” said Ewan Mason, the interim CEO of Star Diamond. “This is one of the richest deposits in the world, and the people of Saskatchewan and all the stakeholders in the area deserve the benefit of that.”

It was part of a presentation where the company outlined the project’s status for investors and others.

Mason said currently, mining giant Rio Tinto still has a 75 per cent share of the project, which means they control it. But last year, Rio put the project into “care and maintenance” mode, which means no work is being done to advance it.

Mason is hopeful this year will change that.

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“I’m optimistic that in the near term, we will come to a resolution that our shareholders and stakeholders will all fully embrace,” he said. “We’re not exactly sure that we’re going to come to a conclusion but they have been very gracious with us and they are getting out of the project,” he added.

The project is located about 60 kilometers east of Prince Albert, and work has been ongoing for several decades.

According to senior technical advisor George Read, the project has a lot of potential. He said it’s close to highways and the provincial power grid, with a large labour force in the region. He added the quantity and quality of the diamonds they have found has been quite high, including a high proportion of larger diamonds – which a lot of mines around the world do not have.

“The big diamonds are the real economic drivers,” he said. “Star and Orion South have significant carats and notably combined with a very high price…in 2021 the world average was about $116 a carat, as you can see we have a price of some $210 a carat for Star, and $169 for Orion South.”

Over the years thousands of diamonds of various sizes have been found at the project, but so far no mine has been built.

Mason said they hope to change that soon.

“It is our plan, once we get that back (control of the project) to have discussions with local stakeholders, including the First Nations group and government bodies and financing partners to see if we can’t move this forward,” he said.

It will not be cheap. A study done in 2018 estimated the cost of the mine at around $1.4 billion, but the payback could be significantly higher. Estimated mine life is around 34 years.

Inflation could also be a factor, although Read noted the price of natural rough diamonds is generally headed in the right direction for them.

“The prices presently of natural rough (diamonds) are generally very good,” he said.

Mason added it has the potential to be a zero emission mine, as equipment could be mostly electrical. Processing Kimberlite ore has the potential to sequester carbon out of the air, because the kimberlite tailings (waste rock) absorb it. Several companies, including De Beers, already have studies underway.

“If we move forward with this, this could be a zero emission project, which is stunning in the extreme for a mining project,” he said.

Read said the plan would be to mine the Orion South project first, simply because the kimberlite pipe that holds the diamonds is closer to the surface, so it would be able to generate income more quickly.

Mason said the project could be a “game changer” for the province, with billions of dollars of cash flow.

“It needs to happen. It’s just a gift,” he said.

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doug.lett@pattisonmedia.com

Twitter: @DougLettSK