Mr. Ewan Mason reports

STAR DIAMOND CORPORATION TO ACQUIRE RIO TINTO'S 75% INTEREST IN FORT A LA CORNE DIAMOND PROJECT

Star Diamond Corp. has entered into a binding agreement with Rio Tinto Exploration Canada Inc. (RTEC), providing for the transfer by RTEC to Star Diamond of all of RTEC's 75-per-cent interest in the Fort a la Corne diamond project located in central Saskatchewan.

The agreement provides that, upon closing:

• RTEC will transfer to Star Diamond all of RTEC's 75-per-cent interest in the project, such that the project will be 100 per cent owned by Star Diamond.
• RTEC will transfer to Star Diamond ownership of the trench cutter drill rig used by RTEC to complete its prior bulk sampling program at the project.
• RTEC will transfer to Star Diamond the bulk sample plant located at the project, including the Tomra XRT diamond sorting machine that is on site.
• Star Diamond will issue to RTEC and/or an affiliate that number of common shares of Star Diamond that results in RTEC and its affiliates owning 19.9 per cent of the then outstanding common shares of Star Diamond (RTEC and its affiliates currently own approximately 2.3 per cent of Star Diamond's outstanding common shares).
• RTEC and Star Diamond will enter into an investor rights agreement whereby, among other things, RTEC will be granted certain pre-emptive rights to maintain its 19.9-per-cent ownership interest in Star Diamond in connection with future financings undertaken by Star Diamond, and RTEC will agree to certain standstill protections provided that RTEC will have the right to increase its 19.9-per-cent ownership position in the event that Star Diamond receives an acquisition proposal.

"Acquiring 100-per-cent ownership of the project will be a major accomplishment for Star Diamond and its shareholders. We are grateful to Rio Tinto for the significant monetary investment and expertise it has contributed to the project over the past more than five years, which has meaningfully advanced what Star Diamond believes is one of the most promising diamond projects in the world," said Ewan Mason, president and chief executive officer of Star Diamond.

Rio Tinto head of exploration Dave Andrews said: "The majority of Rio Tinto's global exploration program is now firmly focused on metals and minerals to support the energy transition. Although we will no longer have direct involvement in the project, we are pleased to be able to maintain our interest in the project by gaining a 19.9-per-cent ownership interest in Star Diamond. After more than five years, we continue to see potential in the project, and believe it can be a significant contributor to both the local communities around the Fort a la Corne property and the broader Saskatchewan economy."

Upon completion of the transactions that are the subject of the agreement, Star Diamond will have full control and responsibility for the project, the existing joint venture agreement between RTEC and Star Diamond will terminate, and Star Diamond will release and indemnify RTEC for liabilities arising from or relating to the project, all in exchange for a $4-million payment from RTEC to Star Diamond. RTEC has agreed that it will provide, on Star Diamond's behalf, for up to five years following closing, letters of credit in the aggregate amount of no more than $9.9-million to secure certain environmental remediation and reclamation obligations related to the project. Star Diamond will be obliged to repay any amounts drawn on these letters of credit, and such repayment obligations will be secured against the project and its assets.

Completion of the transactions contemplated by the agreement is subject to various closing conditions, including receipt of all required governmental approvals and the approval of the Toronto Stock Exchange for the issuance of additional common shares of Star Diamond to RTEC.

A copy of the agreement will be available under Star Diamond's profile on SEDAR+ and on Star Diamond's website. The summary of the agreement outlined herein is qualified in its entirety by the full text of the agreement, and reference should be made to the agreement for its full terms and conditions.

About Star Diamond Corp.

Star Diamond is a Canadian-based corporation engaged in the acquisition, exploration and development of mineral properties. Shares of Star Diamond trade on the Toronto Stock Exchange under the trading symbol DIAM. Star Diamond's most significant asset is its interest in the Fort a la Corne property in central Saskatchewan. These kimberlites are located in close proximity to established infrastructure, including paved highways and the electrical power grid, which provides significant advantages for future mine development.

It will host a webinar on Wednesday, Nov. 29, 2023, at 1 p.m. EDT.

We seek Safe Harbor.