A Canadian court has ruled that Star Diamond (TSX: DIAM) has grounds to take its legal fight with Rio Tinto (ASX, LON, NYSE: RIO) to court over their joint Star-Orion South project in north-central Saskatchewan, but said the junior faces an “uphill battle.”
Judge Grant Currie said the Saskatoon-based company may struggle to prove that Rio Tinto Exploration Canada (RTEC) improperly exercised its options to obtain a majority ownership stake in the proposed diamond mine.
The legal row involves a 2017 agreement under which Rio Tinto’s subsidiary would spend $75 million in phases to acquire 60% of the Star-Orion South diamond project.
Star Diamond says that in November, RTEC informed them that it was exercising all options at once and well ahead of schedule. The junior claims that by doing that, RTEC breached the conditions of the deal and misrepresented the costs involved in the exploration work.
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