Mr. Richard Johnson reports

STAR DIAMOND CLOSES FIRST TRANCHE OF PRIVATE PLACEMENT

Star Diamond Corp. has closed the first tranche of the previously announced non-brokered private placement for gross proceeds of $324,140. These proceeds are from the issuance of 2023 flow-through (FT) units of the company, which are required to be issued prior to Dec. 31, 2023, to ensure investors qualify for the associated 2023 tax deductions and mineral exploration tax credits.

The company intends to close the final tranche of the offering on or about Jan. 26, 2024, for up to the remaining balance of the private placement.

Pursuant to the closing of the first tranche of the offering, the company issued 2,946,728 FT units at a price of 11 cents per FT unit for gross proceeds of $324,140, with each FT unit consisting of one common share of the company and one share purchase warrant, each of which will qualify as a flow-through share for the purposes of the Income Tax Act (Canada). Each warrant will entitle the holder thereof to acquire one additional common share of the company (which shall not be a flow-through share) at an exercise price of 14 cents for a period of 36 months from the date of issuance.

The gross proceeds raised from the sale of the FT shares will be used for exploration activities in Saskatchewan on the company's Fort a la Corne property, including the Star-Orion South diamond project. These expenditures will qualify as Canadian exploration expenses (within the meaning of the Income Tax Act (Canada)).

The offering is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the final approval of the Toronto Stock Exchange. All securities issued and issuable pursuant to the first tranche of the offering are subject to a hold period expiring April 30, 2024.

Related party transaction

In connection with the offering, Richard Johnson, the chief financial officer of the company, has purchased a total of 225,000 FT units. The participation of insiders in the offering constitutes a related party transaction pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The company is relying on an exemption from the formal valuation and minority shareholder requirements of MI 61-101 on the basis that the fair market value of the participation of insiders in the offering does not exceed 25 per cent of the market capitalization of the company, as determined in accordance with MI 61-101.

In connection with the offering, the company paid a cash finder's fee of $17,830 and issued 159,090 finder's warrants, each of which entitles the holder thereof to purchase one unit at a price of 11 cents per unit at any time prior to Dec. 29, 2026, with each unit consisting of one common share and one warrant.

The offering consists of any combination of: (i) units of the company at a price of nine cents per unit; and (ii) FT units at a price of 11 cents per FT unit, subject to maximum aggregate gross proceeds of $2.0-million. Each unit shall consist of one common share of the company (which shall not be a flow-through share) and one warrant. Each FT unit shall consist of one FT share and one warrant, each of which will qualify as a flow-through share for the purposes of the Income Tax Act (Canada).

The offering will be conducted in reliance upon available prospectus exemptions contained in National Instrument 45-106, Prospectus Exemptions, including the accredited investor exemption, and the family, friends and business associates exemption.

The company advises that if you are an existing shareholder or other subscriber interested in participating in the offering at a minimum subscription amount of $10,000, please contact Star Diamond by e-mail at stardiamondcorp@stardiamondcorp.com to discuss exemptions available for you under existing securities law.

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 TSX 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, providing significant advantages for future mine development.

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