Mr. Ewan Mason reports

STAR DIAMOND CORPORATION ANNOUNCES TRANSFORMATIVE TRANSACTION WITH SPIRIT RESOURCES S.A.R.L.

Star Diamond Corp. has reached an agreement with Spirit Resources SARL to provide financing to the company by way of a private placement of units for gross proceeds of $4-million and an interim $800,000 unsecured loan. The proceeds of the private placement and loan will be used for working capital and general corporate purposes, including to advance a prefeasibility study with respect to the Fort a la Corne diamond project.

Under the private placement, Spirit has agreed to subscribe for 133,333,333 units at a price of three cents per unit for aggregate gross proceeds of $4-million. Each unit will consist of one common share of the company and one common share purchase warrant with an exercise price of: (i) four cents per common share at any time within 12 months following the date of issue; and (ii) five cents per common share thereafter, with such warrants being exercisable for a period of 24 months, provided that if the company fails to complete one or more equity financings for at least $3-million in aggregate within such 24-month period, then the exercise period of the warrants will be extended by a further 12 months. Upon completion of the private placement, Spirit would hold 194,455,143 common shares, representing 25.82 per cent of the issued and outstanding common shares. Consequently, the completion of the private placement may materially affect control of the company, within the meaning of the TSX company manual, and may result in Spirit becoming an acquiring person under the company's amended and restated shareholder rights plan dated May 30, 2023.

The completion of the private placement is conditional upon receipt of the approval of the company's shareholders (other than Spirit), including with respect to: (i) the waiver of the application of the shareholder rights plan to the private placement and the termination of the shareholder rights plan; (ii) the issuance of common shares and warrants on the terms of the private placement; (iii) Spirit obtaining the ability to materially affect control of the company; (iv) the appointment by Spirit of two individuals to the board of directors of the company, as described herein; and (v) any such other matters as may be agreed by the company and Spirit.

The company intends to provide notice of a special meeting of its shareholders to address such matters as soon as practicable following this announcement. In connection with the foregoing, the company and Rio Tinto Exploration Canada Inc. (RTEC) have entered into a voting support agreement, whereby RTEC has agreed not to vote against certain matters to be considered at such meeting, including the waiver and termination of the shareholder rights plan and the terms of the private placement.

In addition to such shareholder approval, the completion of the private placement is conditional upon receipt of all other required regulatory approvals, including the approval of the Toronto Stock Exchange. The outside date for the completion of the private placement is Aug. 29, 2025.

The completion of the private placement is also conditional on the company and Spirit entering into an investor rights agreement, pursuant to which Spirit will be granted certain pre-emptive and prospectus registration rights, the right to nominate two directors to the board following completion of the private placement, as well as, in the event Spirit exercises all of the warrants, the right to nominate an additional director to the board and to nominate the chair of the board from such Spirit director nominees.

In connection with the private placement, the company and Spirit have also entered into a loan agreement, whereby Spirit will advance an unsecured term loan in the principal amount of $800,000 to the company. The loan bears interest at 6 per cent per year and matures upon the earlier of the closing of the private placement or the date falling on the 180th day after issuance of the loan, unless extended by Spirit in its sole discretion.

Ewan Mason, president and chief executive officer of the company, said: "We are very pleased to welcome Jean-Raymond Boulle as a transformative shareholder to move this incredible diamond project forward. Mr. Boulle's reputation as a successful entrepreneur in the mining sector speaks for itself and his connections in the diamond industry will be extremely useful in the search for financing to build this world-class mine."

Spirit is a Luxembourg-based private investment corporation that is ultimately owned and controlled by Mr. Boulle. Immediately prior to the execution of the documentation pertaining to the private placement, Spirit beneficially owned and controlled 61,121,810 common shares, representing 9.86 per cent of the issued and outstanding common shares on a non-diluted basis.

Assuming the satisfaction of the conditions listed herein and the completion of the private placement, Spirit will beneficially own and control an aggregate of 194,455,143 common shares and 133,333,333 warrants, representing 25.82 per cent of the issued and outstanding common shares on a non-diluted basis and 36.97 per cent on a partially diluted basis, assuming the exercise of the warrants. The completion of the private placement would result in an increase of Spirit's holdings of common shares by approximately 15.96 per cent on a non-diluted basis and 27.11 per cent on a partially diluted basis.

Spirit intends to acquire the units for investment purposes. Depending on market conditions and other factors, Spirit may, from time to time, acquire and/or dispose of securities of the company or continue to hold its current position.

To obtain a copy of the early warning report to be filed by Spirit in connection with this press release, please contact Michael Oke at 44-7834368299. Spirit's address is 63 rue de Rollingergrund, 2440 Luxembourg.

About Star Diamond Corp.

The company is a Canadian-based corporation engaged in the acquisition, exploration and development of mineral properties. The company's most significant asset is its interest in the Fort a la Corne property in central Saskatchewan. These diamondiferous kimberlites are located in close proximity to established infrastructure, including paved highways and the electrical power grid, which provide significant advantages for future mine development.

We seek Safe Harbor.