Rio Tinto's huge trench cutter rig in position on one of the ten deep holes it has excavated at Fort à la Corne. (file photo/Star Diamond Corp.)

By Glenn Hicks

diamond dispute

Bulk sampling program complete at Project Falcon but diamond breakage dispute continues

Feb 22, 2021 | 5:00 PM

A key step in the process towards establishing the viability of a future diamond mine east of Prince Albert appears to have been concluded. However, the two main partners in the Fort à la Corne exploration project —who are embroiled in litigation over their joint venture agreement—have differing perspectives on that.

Star Diamond Corporation and Rio Tinto Exploration Canada (RTEC) are arguing about whether a detailed diamond breakage study is required.

Star Diamond Corporation says RTEC has declared its huge ten-trench hole sampling program from 2019 at the Star-Orion South site complete. But Star Diamond maintains there can be no declaration of sample completion until a detailed diamond breakage study is also done.

In a media release on Monday, Star Diamond said it had received a letter from Rio Tinto Canada stating the completion of the quality assurance and quality control (QA/QC) procedures allows RTEC to accept the final processing and recovery results of the Star’s ten bulk sample program.

Star Diamond quoted Rio Tinto as saying it was “even more pleased that those results have met the objective of the Star bulk sampling programme, which was to improve confidence in the grade of the Star Kimberlite.”

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The correspondence added, in part, “we are proud to have completed this work in accordance with industry standards and to have done so in the middle of the global COVID-19 pandemic.”

Star Diamond wants breakage study

However, in their media release Star Diamond said, in part, while it remains pleased the bulk sampling results confirm their belief in the “excellent geology with large and contiguous diamond-bearing kimberlites…,” Rio Tinto has not yet done a comprehensive diamond breakage study.

Star Diamond contends a study by Rio Tinto is required “to properly assess the full nature, extent and potential causes of the undue diamond breakage that appears to have resulted from Rio Tinto Canada’s use of unproven and inadequately tested extraction and/or diamond recovery methodologies, and the extent to which larger diamonds would have been recovered in the absence of such breakage.”

Star Diamond argues Rio Tinto, as part of an earlier court injunction around their joint venture agreement dispute, gave assurances of such a breakage study.

Breakage dispute

However, in an email to paNOW Monday, a Rio Tinto spokesperson said that is not the case, citing their interpretation of the recent court injunction. The mining giant also repeated its rejection of Star Diamond’s claims about breakage.

“Rio Tinto does not agree with Star Diamond’s conclusions on the effectiveness of the sampling methodology and is confident in its ability to defend its use of the trench cutting technology on this project,” it said in the email.

In the meantime, Rio Tinto said the sampling results have been verified and shared with Star Diamond and “will now be evaluated to determine next steps for exploration and study work.” Rio Tinto did not give any indication of the scope or timeframe for work that may happen on the Project Falcon site in 2021.

Star Diamond says it will apply to the court to ensure Rio Tinto produces the diamond breakage report because, it says, Rio Tinto has now initiated a 120-day period from Feb. 8, after which it can call a management committee meeting under their Joint Venture Agreement. The court injunction had put the brakes on Rio Tinto calling such a meeting.

Star Diamond added in their media release it did not expect court proceedings with Rio Tinto to be heard this calendar year.

In March, 2020, Star Diamond filed a notice in Court of Queen’s Bench in Regina claiming Rio Tinto had not validly exercised its four options to potentially become a 60 per cent partner in the massive diamond venture. It claims Rio Tinto had used its significant financial resources “…and engaged in bad faith predatory practices …with a view of diluting Star Diamond’s interest in the properties.”

Rio Tinto denies the claims.

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glenn.hicks@jpbg.ca

On Twitter: @princealbertnow