Star Diamond Mentioned Again - 07 Aprhttps://www.stockwatch.com/News/Item?bid=Z-C:*MKTDIAM-2888427&symbol=*MKTDIAM®ion=C Ken MacNeill and George Read'sStar Diamond Corp.(DIAM) rose one-half cent to 24.5 cents on 511,000 shares. The company has been served a statement of defense from Rio Tinto Exploration Canada Inc. (RTEC), its yes-I-am, no-you're-not joint venture partner on the FalCon diamond project in central Saskatchewan. RTEC filed notice in early November that it was exercising all four of its options on the FalCon project, a move it said triggering the formation of a joint venture with RTEC holding a 60-per-cent interest. After three months of behind the scenes grumbling, Star Diamond filed a statement of claim against RTEC in early March, alleging that RTEC had improperly exercised its options, had improperly spent excessive sums on the project to do so, and had failed to provide Star Diamond with meaningful data from its exploration program, all of which it considered breaches. Specifically, Star Diamond claims that RTEC attempted to exercise its options in parallel without first providing notice that it intended to do so. It also claimed that the $103.6-million that RTEC said that it spent on the project was excessive, unreasonable and inconsistent with accepted industry practices. Further, Star Diamond said that RTEC failed to provide any results, data or information derived from the 10-hole Bauer trench cutter bulk sampling program undertaken on the Star pipe last year. RTEC's statement of defense contained few surprises. The company insists that it was not required to file prior notice that it was exercising all four options in parallel as it was relying on a subsequent section of the agreement that allowed it to roll excess expenditures from one option to the next. There certainly were excess expenditures -- over $30-million above the $70.5-million required -- and RTEC says that it provided notice sequentially, although clearly in machine-gun fashion, with the three subsequent notices of exercise laid out in one long sentence of legalese. RTEC also offers a counter to Star Diamond's complaint about the amount and reasonableness of its expenditures. It says that it had "sole discretion" over the expenditures, adding that at all material times it acted in good faith and incurred expenditures reasonably. Further, RTEC says that Star Diamond had the option of requesting an audit of the expenditures and while it did so, its request was received outside the 30-day window required by the agreement. RTEC saved much of its lawyerly indignation for Star Diamond's allegation that it breached the agreement by intentionally withholding data that it was required to provide. RTEC claims to have provided Star at all material times with all the data to which it was entitled, as well as additional information beyond the scope of the agreement. RTEC complains that Star "alleged publicly" that RTEC intentionally breached the option agreement by withholding sampling results from the not yet completed program. "Star knows that these sampling results do not exist," RTEC's lawyers huffed, adding that the company will provide the data as soon as they become available. As a warmup to its final salvo, RTEC complains that Star Diamond made "numerous allegations of misconduct, bad faith and deliberate predatory conduct by RTEC" and "encouraged and facilitated the public reporting of these false allegations" that, in RTEC's opinion "would constitute a basis for a defamation claim" in any other context. Therefore, it is requesting the court award it special costs. Further, RTEC has filed a counterclaim against Star Diamond, alleging that Star breached the option agreement by failing to execute the joint venture agreement and further, by failing to transfer a 100-per-cent registered interest in the properties to RTEC on Saskatchewan's mineral administration registry system. Accordingly, RTEC has requested its own long list of relief sought from the court. Therefore, the lawyering in Saskatchewan courthouses will continue to ramp up while essential exploration activities at FalCon inch slowly forward. Indeed, an RTEC spokesman reaffirmed that the company believes [Star Diamond's] allegations are without merit and that we have complied with the agreement," adding that RTEC "will continue to vigorously defend the case. https://www.stockwatch.com/News/Item?bid=Z-C:*MKTDIAM-2888427&symbol=*MKTDIAM®ion=C