"Ken MacNeill's Star Diamond Corp. (DIAM) rose one-half cent to 19 cents on 387,000 shares. The company's stock is again stuck like glue near the 20-cent mark, a perch it has occupied for most of the past decade during lengthy stretches of silence. The latest hush, imposed by the company's 18-month-long-and-counting court battle with its co-venturer, Rio Tinto Exploration Canada Inc. (RTEC), has forced their Fort a la Corne (FalCon) project into care and maintenance -- a state rarely conducive to a buoyant stock price.
While FalCon sits idle, Star diamond's loyal retail shareholders remain certain that better days await the project and their company. "Rio knows what is there," applauds one chatroom wag, while another muses whether RTEC will proceed with another 10-hole trench-cutter bulk sample, this time at Orion South, or if it perhaps has enough information at hand to massage the decade-old data obtained by Star into an accurate resource estimate devoid of worry about possible sampling error or diamond breakage.
Indeed, that is a worthy question given the discrepancies between results from the recent Bauer trench cutter test of Star and Star Diamond's underground and large diameter testing in the mid-2000s. At first glance, the trench cutter program appeared to vindicate Star Diamond's position that the grade of the big Star pipe was better measured by its underground dig and not its subsequent large diameter drill program, as the trench cutter grade of 16.4 carats per hundred tonnes for the EJF kimberlite was in line with the 17.4 carats per hundred tonnes determined from the underground dig.
There was one major difference, however, in that the Bauer program produced 2.85 diamonds per tonne while Star managed just 1.31 stones per tonne with its underground test, and just 1.04 stones per tonne with its large diameter drill program. A look at the size distribution profile shows that Star's earlier work failed to recover many diamonds smaller than 0.05 carat -- perhaps four carats per hundred tonnes worth -- rendering meaningless comparisons based merely on the obtained grades.
And what of Orion South? Well, the situation appears the same with Star Diamond's earlier programs. The underground dig averaged 17.6 carats per hundred tonnes across the EJF kimberlite, but with an average stone count of just under one per tonne. Its subsequent large diameter drill program averaged just under 10 carats per hundred tonnes, also with an average of about one diamond per tonne. The company went back in 2015 and completed another round of large diameter drilling. It averaged over 12 carats per hundred tonnes, but this time with over 2.3 stones recovered per tonne.
The main difference is that the kimberlite recovered in 2015 went to a processing facility in Thunder Bay operated by Rio Tinto, while all the earlier tests by Star Diamond were put through its own plant back at the FalCon site east of Prince Albert. Indeed, RTEC appeared to have its own issues initially with processing kimberlite from the Bauer program last year, as its final six holes appeared to perform significantly better than did the first four.
Sorting all this out into a series of reliable adjustment factors will therefore be a challenge, one that RTEC may not want to pursue given the risks of developing a multibillion-dollar mine based on uncertain economics. There does appear little doubt based on Star's own data that the EJF kimberlite at Orion South has a slightly lower grade and a lower diamond value than does the same dominant rock phase at Star. As a result, the big Bauer trench cutter may not be going home to Germany any time soon, assuming RTEC decides to carry on at FalCon after the legal standoff ends."