Five Star Diamonds Enters Agreement to Commence Drilling at Two Key Projects

Highlights

• Five Star Diamonds to issue shares as consideration for up to 5,200 meters of diamond core drilling at the Maravilha and Catalao Kimberlite Diamond Projects.
  
• Approximately 3,200 meters of drilling is planned to test the recently discovered M3 kimberlite at the Maravilha Diamond Project, with the aim of defining the initial tonnage potential of the M3 kimberlite.
  
• A further 2,000 meters of drilling is planned to test 16 high priority targets at the Catalao Diamond Project.
  
• This equity based contract with one of South America’s leading drilling companies is a testament to the value of the kimberlite diamond projects at Catalao and Maravilha.

TORONTO, April 17, 2018 (GLOBE NEWSWIRE) -- “We are delighted to be initiating an important drilling program at Maravilha, where previous sampling has demonstrated the highly prospective nature of the project,” said Matthew Wood, Chairman of Five Star Diamonds. “This equity based contract with one of South America’s leading drilling companies is a testament to the value of our two kimberlite diamond projects at Catalao and Maravilha.”

Five Star Diamonds will issue Company shares to its drilling contractor, in lieu of estimated cash payments of R$1,831,350 (approximately CA$700,000) for drilling services, including up to 5,200 meters in drilling.

The issuance of shares will enable Five Star Diamonds to conserve cash as the Company plans to define the initial tonnage potential of the M3 Kimberlite at the Maravilha Diamond Project, and, to test 16 high priority targets selected based on previous ground magnetic and auger drilling results at the Catalao Diamond Project.

The shares will be issued upon the completion of the contract at a price calculated based on an average VWAP over the previous 30 days before and after the completion of the contract. The shares will be subject to a 12 month lock up agreement after they are issued. The issuance of shares under this arrangement will be subject to the prior approval of the TSX Venture Exchange.

DRILLING AT MARAVILHA DIAMOND PROJECT

Five Star Diamonds recently announced results of a sampling program to test the M3 kimberlite pipe at the Maravilha Diamond Project. A total of 658 macro and microdiamonds were recovered.

The M3 kimberlite pipe lies within the Sao Francisco Craton and is hosted by Archean meta granites and meta basalts. A ground magnetic survey indicated that the M3 kimberlite pipe has a strong magnetic response suggesting an ovoid shape measuring approximately 130 by 65 meters with the major axis aligned along a northeast southwest direction.

Approximately 3,200 meters of diamond core drilling, distributed across 30 drill holes, is planned in the upcoming programme. All drill holes will be angled at 60 degree inclinations. The depth of the drill holes will range from 30 meters up to 190 meters with the aim of investigating the M3 kimberlite pipe to a vertical depth of 160 meters. The M3 kimberlite outcrops at surface. The drilling programme will use two drill rigs (type Mach 320). All drill holes will be drilled using a HQ (63.5mm) diameter to provide enough material for further diamond sampling and analysis.

Drilling is expected to commence initially at the Maravilha Project in the coming weeks. Once completed at Maravilha the drill rigs will be mobilized to the Catalao Project.

DRILLING AT CATALAO DIAMOND PROJECT

The drilling programme for the Catalao Diamond Project aims to investigate 16 high priority targets selected based on previous ground magnetic and auger drilling results. A total of 36 diamond core drill holes are planned for approximately 2,000 meters. The holes will be vertical and will use a HQ (63.5mm) diameter.

A photo accompanying this announcement is available at http://resource.globenewswire.com/Resource/Download/30f11cec-c0fe-4bca-8500-3a93a75541a7

ABOUT FIVE STAR DIAMONDS

Five Star Diamonds is listed on the TSX Venture Exchange under the ticker symbol STAR. The Company controls a dominant and highly enviable position in the Brazilian kimberlite diamond sector owning 23 diamond projects comprising an aggregate of 49 exploration licences.

To date, the Company has conducted exploration programs on seven projects with the Catalao, Maravilha, Riachao, Jaibaras and Verissimo Projects proven to contain diamond bearing kimberlites.

Five Star Diamonds is focused on acquiring and developing advanced staged diamond projects in Brazil. Since it was established, it has pursued an accelerated growth strategy and aims to be one of the first producers of diamonds from kimberlite deposits in Brazil. The Company is focused on the development of sustainable kimberlite pipes and is not involved in alluvial diamond mining with its associated environmental issues. The Company works closely with local, state and federal authorities in Brazil to foster an open, transparent and legal diamond industry in Brazil.

This release is an update by the Company on its 100% owned Maravilha Diamond Project and its 100% owned Catalao Diamond Project. It is expected that the company will be able to provide further updates on these and its other Projects over the coming months and we look forward to keeping shareholders informed of our progress as we move towards building a truly unique Brazilian Diamond Company.

Qualified Person

Mr Paulo Ilídio de Brito
BSc Geology

Mr. Paulo de Brito is a geologist based in Brazil, has over 30 years of experience in the mining industry, dealing primarily with gold, copper, nickel, iron, industrial minerals and more recently diamonds. Mr. Brito is a Principal of consulting group Brasgeo and was until recently Exploration Manager of Paringa Resources Limited. Previously, he worked as a senior geologist with WMC Resources Ltd. for 18 years until the closure of their activities in Brazil in 2002.

The exploration activities and their related results included in this announcement were directly supervised and managed by Mr. Brito. According to Mr. Brito, all exploration work carried out to date on the Projects mentioned in this release follow clear mining industry standards.

Mr. Brito, is a member of AIG (Australian Institute of Geoscientists), a professional geologist of CREA-RJ (Conselho Regional de Engenharia e Agronomia) and a Qualified Person as defined in National Instrument 43-101. Mr. Brito reviewed and approved the scientific and technical information contained in this press release.

On behalf of the Board

Five Star Diamonds Limited

Matthew Wood
Chairman of the Board

For further information, please contact:

Five Star Diamonds Limited
Joe Burke, GM Marketing
jburke@fivestardiamonds.net

Rajan “Raj” Rai
rrai@fivestardiamonds.net
+1 778 835 9200

John Vincic, Principal
Vincic Advisors
john@vincicadvisors.com
+1 647 402 6375
www.vincicadvisors.com

Cautionary Note Regarding Forward-looking statements

Information set forth in this news release contains forward-looking statements. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking statements as a result of various factors, many of which are beyond the Company’s control. Such factors include, among other things: variations in the nature, quality and quantity of any mineral deposits that may be located, significant downward variations in the market price of any minerals produced, the Company’s inability to obtain any necessary permits, consents or authorizations required for its activities, to produce minerals from its properties successfully or profitably, to continue its projected growth, to raise the necessary capital or to be fully able to implement its business strategies. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.