(Submitted photo/Star Diamond Corp)

By paNOW Staff

DIAMOND DISPUTE

Fort à la Corne diamond dispute resolved after mining companies reach agreement

Dec 10, 2021 | 2:00 PM

It appears a dispute between two mining companies with operations in Saskatchewan has been resolved.

On Thursday, Star Diamond and Rio Tinto announced they have entered into binding agreements that have resolved a nearly two-year conflict between the mining giants.

In 2020, Star Diamond took Rio Tinto to court, alleging they breached its options agreement, racked up excessive costs and failed to share information about the diamond exploration finds at Project Falcon east of Prince Albert in Fort à la Corne.

Rio Tinto denies the allegations and eventually countersued Star Diamond for what it claimed was their improper retention of the mineral dispositions and surface rights.

Star Diamond also claimed that Rio Tinto, by failing to have the bulk sampling plant operational, was unable to provide results of testing to show if experimental trench cutting methodology had been a success.

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Now that a resolution has been reached, all expenditures on Project Falcon prior to Dec. 31, 2021, will be the sole responsibility of Rio Tinto’s subsidiary, Rio Tinto Exploration Canada (RTEC). while all expenditures between Jan. 1, 2022, will be advanced by RTEC.

Once a decision to develop the mine has been made and announced, Star Diamond will have six months to begin contributing to the joint venture. The companies have also agreed that the interests in the joint venture have been adjusted to 75 per cent for RTEC and 25 per cent for Star Diamond. The original agreement was 60 per cent and 40 per cent, respectively.

“This is a major step forward for the Fort à la Corne project, Star Diamond and its shareholders,” Ewan Mason, Chair of the Board of Star Diamond. “We are very pleased to have reached a constructive resolution with Rio Tinto that puts our differences in the past, fully aligns our interests and allows both of us to singularly focus on jointly and expeditiously moving forward with what Star Diamond believes is one of the most promising Diamond projects in the world.”

Star Diamond and RTEC have agreed that all expenses from the Fort à la Corne property between Nov. 9, 2019 and Dec. 31, 2021 are the sole responsibility of RTEC. The expenses amount to about $77.4 million, in addition to the $103.6 million spent by RTEC prior to giving notice on Nov. 9, 2019, that it was exercising its options to a joint venture.

“These new arrangements and our alignment with Star Diamond represent a major milestone in the continued development of the Fort à la Corne property,” said Rio Tinto Head of Exploration, Dave Andrews. “Building on the comprehensive studies and successful bulk sampling program on the Star Kimberlite, we are very pleased to now be working cooperatively with Star Diamond on a diamond project that we believe has the potential to be a significant contributor to both the local communities around the Fort à la Corne property and the broader Saskatchewan economy.”

As part of the resolution arrangements, Star Diamond and RTEC have agreed to end the litigation that has been ongoing between them and to release each other for prior events.

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panews@pattisonmedia.com

On Twitter: @princealbertNOW