Star Diamond Corporation (DIAM) Earnings Call Transcript

Good morning, and welcome. At this time, I would like to introduce the Board of Directors of Star Diamond Corporation, Ewan D. Mason, Lisa K. Riley and Larry E. Phillips. I will now turn the conference over to Ewan D. Mason, the CEO and Chair of the Board of Star Diamond Corporation.

Thank you, operator. Good morning, and welcome to all. At this time, I would like to introduce the Board of Directors, in which we've already done. Welcome to the Special Meeting of Shareholders of Star Diamond Corporation. As mentioned, my name is Ewan Mason. And as Chair of the Board, I will chair today's meeting. This virtual meeting will be conducted in the same manner as our 2025 Annual General Meeting generally. Our goal is to replicate the experience you would have if today's meeting were being held in person. On behalf of the Board, I wish to express thanks to those shareholders who have submitted their proxies in advance of today's meeting. As this meeting is being held virtually and there are some rules that we have established for the orderly conduct of this meeting. Questions in respect of the business of today's meeting may be submitted by registered shareholders and duly appointed proxy holders only using the designated Ask a Question field on the web portal. Please note, there will be a slight delay in how we received these questions in real time. When asking your question, please indicate your name, which entity you represent, if any, and confirm that you are indeed a registered shareholder or a duly appointed proxy holder. Questions will generally be addressed during the question period at the end of the meeting. However, I may deal with questions regarding procedural matters or directly related to the motions during the meeting at an appropriate time. Voting will be conducted by one single electronic ballot. Registered shareholders and duly appointed proxy holders will be asked to vote on each item of business after the presentation of all items of business only registered shareholders and duly appointed proxy holders of the corporation are permitted to vote at today's meeting. we will advise when the polls have opened, and you may select your vote on each resolution. If you have already submitted your vote and you do not wish to change your vote, it is not necessary for you to submit a further vote at this meeting. We will now proceed with the formal portion of today's meeting. To expedite the formal part of the meeting, I will move all motions and will not require motions to be seconded. I now call to order the special meeting of the corporation shareholders. With the consent of the meeting, I appoint Robert Seiger of Voorheis & Co. LLP as Secretary of this meeting. With the consent of this meeting, I also appoint Bart Wingerak from Odyssey Trust Company as scrutineer to report on the number of shares represented at this meeting and to tabulate the votes on any ballot taken at this meeting and to report thereon to the chairperson of the meeting. The scrutineer has provided me with a copy of their report, which indicates that at least two persons present and holding or representing by proxy, not fewer than 5% of the shares entitled to vote at the meeting are in attendance to -- in the meeting to proceed in accordance with the bylaws of the corporation. A copy of the final report on attendance will be filed with the records of -- minutes of the meeting. I have here the certificate of Odyssey indicating that proper notice of the meeting has been given in accordance with the Canadian Business Corporations Act and the bylaws of the corporation. Accordingly, unless there is an objection, I will dispense with the reading of the notice of meeting. I direct that a copy of the notice with proof of mailing be kept by the Secretary with the records of the meeting. The purpose of today's meetings are set out in the Notice of Meeting and Management Information Circular, which was dated June 19, 2025, and copies of which were mailed to shareholders on or about June 28, 2025, together with the form of proxy. These materials are available under the corporation's profile on the SEDAR+ website or on the corporation's website. You should know that proxies lodged before this meeting allow the corporation's designated proxy holders to cast a significant number of votes. Based on the number of shares represented at this meeting, the corporation will be able to determine the outcome of all motions that will go to a vote today. I may therefore declare the motions, which will go to a vote today as carried even though all the votes may not have been counted or a final report may not yet be available. I shall do this to keep up the pace of the meeting. I now declare that this meeting is regularly called and properly constituted for the transaction of today's business. We will now move to the formal part of the agenda. The first item of business is to consider an ordinary resolution as set out in Schedule A of the management information circular to approve the waiver of the applicable visions of the corporation's amended and restated shareholder rights plan to the private placement to Spirit Resources or an affiliate thereof of 133,333,333 units -- that was 1 million, sorry, of the corporation at a price of $0.03 per unit with each unit consisting of: a, one common share -- one common share -- purchase form of the corporation. I will refer to this financing during the meeting as the private placement. The terms of the private placement are set out in subscription agreement dated as of May 15, 2025, between the corporation and spare resources and are described in the management information circular. The Board of Directors has authorized and approved, subject to shareholder confirmation, the waiver of the application of the rights plan to the private placement in accordance with the terms of the rights plan. In order for the waiver of the application of the rights plan to the private placement to be approved, an ordinary resolution must be passed by at least a majority of the votes cast at this meeting, excluding those votes attached to the common shares held by Spirit Resources and its affiliates. I move that the ordinary resolution in the form set out in Schedule A of the management information circular be approved. This motion is now on the floor. And I will briefly pause for any questions relating specifically to this motion. As mentioned at the beginning of this meeting, voting today will be conducted by a single electronic ballot. We will, therefore, continue with the next item of business, and you will be prompted to vote on each resolution after the presentation of all business items for this meeting. The next item is to consider an ordinary resolution as the amendment of the rights plan to affect the termination of the rights plan in such manner and form as the corporation's Board of Directors may determine as further described in the management information circular. The Board of Directors has authorized and directed the corporation subject to shareholder confirmation, to amend the rights plan to effect the rights plan immediate and unconditional termination in such manner and form as the Board may decide. In order for the amendment to affect the termination of the rights plan to be approved, an ordinary resolution must be passed by at least a majority of the votes cast at this meeting as well as a majority of votes cast, excluding those votes attached to common shares held by Spirit Resources and its affiliates. I move that the ordinary resolution in the form outlined in Schedule B of the management information circular be approved. The motion is now on the floor. Unless there are any questions or discussions, I will move to the next item of business. There are no questions. So the next item of business is to consider an ordinary resolution as set out in Schedule C of the management information circular. To approve the private placement to Spirit Resources or an affiliate thereof all as described in the management information circular, including with respect to: a, the unit subscription price and warrant exercise price, each exceeding the maximum discount to the market price of the common share committed by the TSX without shareholder approval; b, the completion of the private place material effect in control of the corporation; c, the number of common shares issued below in aggregate in connection with the private placement, the contemporaneous automatic conversion of the corporation's outstanding convertible notes, and the exercise of certain preemptive rights to be granted to Spirit in the connection with the private placement. If exercised by Spirit Resources exceeding the maximum dilution of the common shares permitted by the TSX without shareholder approval; and finally, d, the number of common shares issuable in aggregate to Spirit as an insider of the corporation following the completion of the private placement pursuant to certain preemptive rights to be granted to Spirit in connection with the private placement. If exercised by Spirit resulting in aggregate private placement issuances to insiders of the corporation during the preceding 6-month period being in excess of the maximum insider visitation permitted by the TSX without shareholder approval. In order for the terms of the private placement to be approved, an ordinary resolution must be passed by at least a majority of the votes cast at this meeting, excluding those votes attached to the common shares held by Spirit Resources and its affiliates. I move that the ordinary resolution in the form outlined in Schedule C of the management information circular to be approved. The motion is now on the floor. And unless there are any questions or discussions, I will move on to the next item of business. There are no questions. The next item of business is to consider an ordinary resolution as set out in Schedule D of the Management Information Circular to approve the election of Al Gourley to the corporation's Board of Directors conditional effective upon the closing of the private placement. As discussed in the Management Information Circular, the completion of the private placement is conditional upon the election of the corporation shareholder of two directors nominated by Spirit to be effective upon completion of the private placement. The election of Mr. Gourley as a nominee of Spirit will be in addition to the three directors who were previously elected at the Corporation's Annual General Meeting. In addition to the term of office, Mr. Gourley as a Director, will be from the same of the closing of the private placement until the next Annual Meeting of the Shareholders of the Corporation or until his successor is duly elected or appointed. Mr. Gourley is qualified to act as a director under the provisions of the Canadian Business Corporations Act. The motion is now on the floor. There are no questions. So the final item of business is considered ordinary resolution as set out in the Schedule E of the Management Information Circular to approve the election of Wayne Malouf to the Board of Directors. Conditional and effective upon the closing of the private placement, Mr. Malouf is Spirit Resources' second nominee. As with Mr. Gourley, the election of Mr. Malouf as a nominee of Spirit will be in addition to the three directors who were previously elected at the Corporation's Annual General Meeting of Shareholders held on May 15, 2025, bringing the total number of directors to five assuming the election of both Mr. Gourley and Mr. Malouf from the completion of the private placement. If elected, the term of office of Mr. Malouf as a director will be from the date of the closing of the private placement until the next Annual Meeting of the Shareholders of the corporation or until his successor is duly elected or appointed. Mr. Malouf has confirmed that he is prepared to serve as a director. Mr. Malouf is qualified to act as a director under the privileges of the Canadian Business Corporations Act. I move that the ordinary resolution in the form outlined in Schedule E of the Management Information Circular be approved. The motion is now on the floor, and you will be prompted to vote on the resolution shortly. We will now proceed with voting on the items of business that have been brought before the meeting. You will now be prompted to register your vote in respect of each of today's business items for this meeting. If you have already submitted your vote, you do not wish to change your vote, it is not necessary for you to submit a further vote at this meeting. Please register your votes by clicking on your selection for each resolution. Once the electronic balloting process closes, the voting page will disappear, and your votes will be automatically submitted. So we'll wait a few minutes for the completion of the balance and then move on. We will provide registered shareholders and duly appointed proxy holders approximately 1 minute to complete their electronic ballots. Once voting is completed, I will ask that the scrutineer compile the report regarding the results of voting on all business matters. We will reconfine in a few moments with the voting results. [Voting] For anyone just joining, we're waiting for completion of the electronic voting process. We have 1 minute left.

Mr. Chairman, you could proceed.

Thank you, Bart. Thank you for waiting all. I have received the scrutineer's preliminary report and confirm the following: the ordinary resolution of proving the waiver of the application of the corporation shareholder rights plan to the private placement has been approved by a majority of shareholders, excluding those common shares held by Spirit Resources and its affiliates. The ordinary resolution approving the termination of the corporation's rights plan in such manner informed as the corporation's Board of Directors may determine has been approved by a majority of shareholders as well as the majority of shareholders, excluding those common shares held by Spirit and its affiliates. The ordinary resolution approving the private placement has been approved by a majority of shareholders, excluding those common shares held by Spirit and its affiliates. The ordinary resolution approving the action of Al Gourley -- I'm sorry, the election of Al Gourley as a Director of the corporation effective and conditional upon the closing of the private placement has been approved by a majority of the shareholders. And finally, the ordinary resolution approving the election of each of Al Gourley and Wayne Malouf as a director of the corporation and conditional upon the closing of the product placement has been approved by a majority of the shareholders. I direct that the voting results be included in the minutes of this meeting and announced in a press release and filed on SEDAR. As there is no further business to be brought before this meeting, I move that the formal portion of today's meeting be concluded. As the formal business of the meeting of shareholders of the corporation has now been completed, I'd like to turn to any questions submitted during the meeting and invite shareholders and [ bill ] the appointed proxy holders only to ask questions to the extent that they have not already done so. I ask that all registered shareholders or duly appointed proxy holders who would like to ask a question use the designation -- designated Ask a Question field on the web portal to do so. When asking your question, please state your name, the entity you represent, if any, and confirm you are a registered shareholder or a duly appointed proxy holder. Please limit your questions to topics relating to today's subject matter and keep your questions short and to the point. We will now give attendees a brief moment to type in their questions.

Mr. Chairman, we have not received any questions from registered shareholders or duly appointed proxy holders, and I move that the question-and-answer period of the meeting be terminated.

Thank you very much, Brian. So therefore, being no further questions, we now conclude the question-and-answer portion of the meeting. On behalf of management, our Board of Directors and our employees, I would like to take the opportunity to thank everyone for attending the meeting today. I would like to thank all of our shareholders for their commitment and continued support. We look forward to your attendance again next year at our Annual General Meeting. Thank you for your time today, and goodbye.