Mr. George Read reports

STAR DIAMOND CORPORATION ANNOUNCES 2023 YEAR END RESULTS

Star Diamond Corp.'s audited financial results for the year ended Dec. 31, 2023, will be filed today on SEDAR+ and may be viewed at SEDAR+ once posted.

Overview

Star Diamond is a Canadian natural resource company focused on exploring and developing Saskatchewan's diamond resources. Star Diamond currently holds, through a joint venture arrangement with Rio Tinto Exploration Canada Inc., a wholly owned subsidiary of Rio Tinto PLC, a 25-per-cent interest in certain mineral properties (which include the Star-Orion South diamond project) within the Fort a la Corne diamond district of central Saskatchewan, Canada. These properties are in close proximity to established infrastructure, including paved highways and the electrical power grid, which provide significant advantages for future mine development.

The company also holds a 50-per-cent interest in the exploration and evaluation properties and assets of the Buffalo Hills joint venture located in north-central Alberta, Canada. Canterra Minerals Corp. holds the remaining 50-per-cent interest. Canterra is the operator of the Buffalo Hills JV.

Fort a la Corne mineral properties

On Nov. 28, 2023, the company entered into a binding agreement with RTEC, providing for the transfer by RTEC to Star Diamond all of RTEC's 75-per-cent interest in the project.

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.

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.

As of the date of this news release, the agreement is expected to close in the near future.

Recent activities relating to the Star-Orion South diamond project and Fort a la Corne mineral properties

During the first quarter of 2024, Star Diamond continued to work with RTEC and Saskatchewan Ministry of Environment representatives to ensure an orderly close to the agreement between Star Diamond and RTEC.

Year-end results

For the year ended Dec. 31, 2023, the company recorded a net loss of $2.8-million or one cent per share (basic and fully diluted) compared with a net loss of $68.8-million or 15 cents per share in 2022. The decrease in net loss year over year was due primarily to the prior year's impairment charge of $66.3-million combined with the mark-to-market loss on the Wescan investment offset by the elimination of the $900,000 contingent consideration.

At Dec. 31, 2023, the company had $600,000 (2022: $2.6-million) in cash and cash equivalents and a working capital deficit of ($300,000) (2022: $2.0-million). The decrease in working capital was a result of administrative and exploration and evaluation expenditures offset by proceeds received from the December, 2023, private placement. Subsequent to Dec. 31, 2023, the company closed the second and final tranche of a non-brokered private placement. However, the ability of the company to continue as a going concern and finance its expenses in an orderly manner will require additional forms of financings.

Outlook

Fort a la Corne mineral properties

Subsequent to the successful close of the agreement with RTEC, Star Diamond's technical team will focus on the technical investigation and evaluation of the Star-Orion South diamond project, with the goal of a future development decision. The initial work aims to prepare a revised mineral resource estimate for the Star-Orion South diamond project, which will form the foundation of an updated prefeasibility study. The PFS will enable a feasibility study, on which a production decision can be based.

Buffalo Hills mineral properties

Management continues to review the recent results from the diamond valuation and typing analysis. A more detailed update on activities at the Buffalo Hills JV will be provided as it becomes available.

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 currently holds, through a joint venture arrangement with RTEC, a 25-per-cent interest in the project. The project is located in central Saskatchewan, in close proximity to established infrastructure, including paved highways and the electrical power grid, which provide significant advantages for future mine development. The company also holds a 50-per-cent interest in the exploration and evaluation properties and assets of the Buffalo Hills JV located in north-central Alberta, Canada. Canterra holds the remaining 50-per-cent interest and is the operator of the Buffalo Hills JV.

Technical information

All technical information in this press release has been prepared under the supervision of George Read, senior vice-president, corporate development, professional geoscientist in the provinces of Saskatchewan and British Columbia, and Mark Shimell, vice-president, exploration, professional geoscientist in the provinces of Saskatchewan and Alberta, who are the company's qualified persons under the definition of National Instrument 43-101.

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