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Australia’s Burgundy Diamond Mines poised to acquire Ekati for $186 million

Burgundy Diamond Mines Ltd. has announced its intention to purchase the NWT’s Ekati diamond mine from Arctic Canadian Diamond Company for approximately $186 million.
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“I am optimistic about the future of Arctic Canadian. This equity-based investment by Burgundy will greatly improve the financial foundation of the company and our goal of extending mine life at Ekati, while continuing to provide employment opportunities for many people in Northern communities,” stated Kristal Kaye, chief financial officer with Arctic Canadian Diamond Company. Dave Brosha photo/courtesy of Arctic Canadian Diamond Company

Burgundy Diamond Mines Ltd. has announced its intention to purchase the NWT’s Ekati diamond mine from Arctic Canadian Diamond Company for approximately $186 million.

The deal, which Australia’s Burgundy is calling “transformational,” is subject to shareholder approval and consent under Canada’s Competition Act.

Ekati, which lies 300 km northeast of Yellowknife, generated revenue of (US)$494 million based on the sale of 4.2 million carats of diamonds in 2022.

The mine, with a workforce of close to 1,100, has probable ore reserves of 26.1 million carats.

Arctic Canadian Diamond Company acquired Ekati in February 2021 after Dominion Diamonds filed for insolvency protection in April 2020. Prior to that, the Washington Companies, a private entity, purchased Ekati for (US)$1.2 billion in November 2017.

The site has been in production since October 1998. The mine life is currently projected to expire as of 2028, however, ongoing exploration could extend that.

Burgundy’s CEO is Kim Truter, who was formerly the CEO of De Beers Canada, making him familiar with the NWT mining scene. He also has past experience as a senior manger with Rio Tinto.

The new Ekati owner stated that its immediate strategy will consist of “optimizing Ekati’s current mine performance and extending mine life through, among other things, underwater remote mining, assessment of the Jay deposit and Fox Underground opportunities, and systematic exploration using newly applied machine learning (artificial intelligence) technology, capturing incremental margins along the diamond value chain by cutting and polishing coloured Ekati diamonds at Burgundy’s commercial facilities in Perth (Australia) and leveraging collaborative sales and agreements with international jewelers.”

Rory Moore, president and CEO of Arctic Canadian Diamond Company, stated, “I believe that this transaction is a significant positive development for Ekati and for the North. I want to acknowledge and thank our current owners for facilitating the restart of operations at Ekati in early 2021. The hard work of our people has led to a return to steady state profitable operations and successfully demonstrated the longer-term value of the Ekati asset that attracted Burgundy to this transaction.”

Kristal Kaye, chief financial officer with Arctic Canadian Diamond Company, added, “I am optimistic about the future of Arctic Canadian. This equity-based investment by Burgundy will greatly improve the financial foundation of the company and our goal of extending mine life at Ekati, while continuing to provide employment opportunities for many people in Northern communities.”