08:30 AM EST, 12/19/2024 (MT Newswires) -- Star Diamond ( SHGDF ) said Thursday that it is putting the Star-Orion South diamond project in Saskatchewan under care and maintenance amid a depressed diamond market.

The company said it has failed to raise $3 million to $5 million for a prefeasibility study as the market is in a "current state of malaise."

Star Diamond ( SHGDF ) said it has failed to secure financing from royalty companies, bridge debt providers and potential offtakers.

As a result, the company entered into discussions with a heavy equipment auctioneer to sell the Bauer Trench Cutter, which could raise $4 million to $6 million, of which 50% is payable to Rio Tinto under the terms of their exit agreement.

Star Diamond ( SHGDF ) is also conducting cost-cutting measures including moving to a smaller office and pausing marketing and consulting contracts. The board and the CEO also agreed to forgo compensation while certain management functions will be reduced or eliminated.

"While 2024 was a great year for us in getting back our former joint-venture partner's 75% share of the project, along with a myriad of other assets, and increasing the project resource by nearly 30%, the diamond industry as a whole has not fared so well," said Ewan Mason, Star Diamond's ( SHGDF ) president and CEO. "There does however appear to be the beginning of a turn-around in the larger stone end of the market and that should bode well for us going forward."

The company's share price closed Wednesday at a 52-week low of $0.025.