Mining major Rio Tinto has given notice to Star Diamond that it will be seeking approval of a $17.8 mn budget for the Star-Orion diamond project in Saskatchewan for the period of June 2021 through March 2022.
The two companies are involved in a dispute about the ownership of Star-Orion. Rio Tinto is also looking to collect a portion of the $64.4 mn it has already spent on the project between November 2019 and May 2021.
In November 2017 Rio Tinto signed a four-stage, $70.5 mn agreement to earn up to a 60% interest in the project over 7.5 years. Star Diamond however did not agree to enact the JV and took Rio Tinto to court.
The case, which also seeks damages from Rio Tinto, is not likely to be heard until next year. If Star is unable to fund its portion of spending, it risks having its interest in the project diluted.
The two sides are awaiting a court decision on an ‘undertaking’ by Rio Tinto that was heard on June 4 and would determine whether Rio Tinto can call a management committee meeting.
Rio Tinto has completed a 10-hole bulk sampling program at Star-Orion that it says has confirmed confidence in grades at the project.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
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