MMG halts zinc concentrate output at Dugald River mine
The company has halted operations at a mill at its zinc mine in Australia for about two months of repair work.
Rio Tinto (ASX, LON, NYSE: RIO) and Canadian junior Star Diamond (TSX: DIAM) have reached an agreement to end a drawn out dispute over the development of a joint diamond project in the province of Saskatchewan.
The legal row stemmed from a 2017 earn-in deal under which Rio Tinto’s subsidiary, Rio Tinto Exploration Canada (RTEC), committed to spend $75 million in phases to acquire 60% of the Star-Orion South diamond project.
When RTEC exercised all its options simultaneously, Star Diamonds objected, alleging the the world’s second-largest miner did so to boost its stake at below market value.
The main change to the terms of their original joint venture agreement is that RTEC will eventually own 75% of the project, with Star Diamond holding the remaining 25% interest.
Shares in the Canadian diamond junior jumped 58% on the news on Friday to C$0.36, the highest they have traded this year. That puts the company’s market capitalization at C$138.25 million (about $109m).
As part of the intended changes, the parties agreed that all expenses on the project prior to December 31, 2021 will be the sole responsibility of RTEC.
Investments next year before the announcement of a decision on whether or not to build a diamond operation, to be made after completing a feasibility study, will initially be advanced by RTEC.
Star Diamond will not be required to begin reimbursing RTEC for its share of the costs unless and until commercial production has been achieved, the parties said.
Should the junior enter into an agreement to sell more than 50% of its shares to a third party, RTEC will have five business days to match such an acquisition proposal.
Once the decision to develop a mine on the Fort à la Corne property in Saskatchewan has been made and announced, Star Diamond will have six months to begin contributing to the joint venture.
A 2018 preliminary economic assessment estimated 66 million carats could be recovered from the project over a 38-year period, generating $C3.3 billion ($2.6 billion) in revenue.
Located 60 km east of Prince Albert, Saskatchewan’s third largest city, Star-Orion is known to host larger stones, including high-value Type IIa diamonds.
2 Comments
BOB HALL
Bout time guys! Get digging.
George Bowles
It will be nice when it happens!