Canadian company Star Diamond has agreed to acquire the remaining 50% interest in the Buffalo Hills Diamond Project in north-central Alberta from Canterra Minerals.

As consideration, Star Diamond will issue 17.5 million common shares, valuing the transaction at $1.1m.

One half of the consideration shares will be subject to a 12-month lock-up arrangement.

In addition to the consideration shares, Canterra will receive a 1% royalty interest in the project.

The deal's completion is subject to customary closing conditions including approval from the TSX. All of the consideration shares will be subject to a customary four-month holding period.

Upon completion of the deal, Star Diamond will hold 100% of the project.

Located around 400km north-west of Edmonton, Alberta, the Buffalo Hills Diamond Project encompasses 21 mineral leases spanning 4,800 hectares.

It represents a notable and accessible area of diamond-bearing kimberlites, sharing similarities with the Fort á la Corne kimberlites in Saskatchewan, Canada.

The company stated that the project is situated in the Buffalo Hills Kimberlite District, which hosts a minimum of 38 individual kimberlite bodies. Among these, 26 kimberlites contain diamonds, with several of them exposed at the surface.

Exploration of these kimberlites commenced in 1996, with small parcels of diamonds collected from various exploration programmes focusing on the most promising sites.

Star Diamond president and CEO Ewan Mason said: “We are excited to gain control of the 50% of Buffalo Hills Diamond Project we did not own. In early 2023, we dusted off the file on this property and conducted an examination of the existing diamond parcel that was collected from a bulk sample previously taken in 2010.

“Our diamond specialist thoroughly analysed the diamonds and we were astonished to find not only anomalous levels of Type IIa diamonds in the sample but also a presence of fancy yellow diamonds (K6 yellow diamonds) with elevated modelled diamond prices.

“It became clear to us that further work needed to be done and with a number of pipes at surface we believe that a larger bulk sample should be taken to determine how many of the 38 pipes on the property may be economic.”

Canterra Minerals president and CEO Chris Pennimpede said: “We are confident that Star Diamond will be able to maximise the value of the Buffalo Hills Diamond Project as a dedicated diamond explorer with complementary assets in the region.

“Canterra is now focused on advanced stage copper and gold exploration in the central Newfoundland Mining District and looks forward to maintaining its exposure to the project as a Star Diamond shareholder.”