Rio Tinto wants to buy a 60% stake in the Star-Orion South diamond exploration site in Canada for CAD 70.5 million ($53.3 million), according to project owner Star Diamond Corp.
In 2017, Rio Tinto entered into a joint-venture deal under which it had the right to acquire shares in the proposed mine. Its decision to opt in fully to the project comes five years earlier than the original deadline outlined in the agreement. Star Diamonds is currently reviewing a notice it received from Rio Tinto stating its intentions, it noted Friday.
Star-Orion South has an indicated mineral resource of 55.4 million carats of rough, estimated at $210 per carat, Star Diamond said. The deposit also contains inferred resources of 11.5 million carats in its Star and Orion South kimberlites. A major study of goods at the project, conducted in March, indicated nearly 27% of diamonds at its Star project and 13% of those at the Orion South kimberlite are type IIa.
Rio Tinto owns two other diamond projects. Its Argyle mine, in Australia, is set to close in 2020, while the Diavik deposit, in Canada’s Northwest Territories, is due to produce its last diamonds in 2025.
Star Diamonds’ stock price soared 49% Friday following the announcement.
Image: The Star-Orion South site. (Star Diamond Corp.)