Ekati finds a new home with Burgundy
Acquires diamond mine from Arctic Canadian for US$136M North of 60 Mining News - July 5, 2023
Last updated 7/20/2023 at 1:54pm
Burgundy Diamond Mines Ltd. has finalized its acquisition of the Ekati diamond mine in Canada's Northwest Territories, adding another precious stone mine to its portfolio.
Already a 40% partner with North Arrow Minerals Inc. at the Naujaat diamond project in Nunavut, Burgundy closed a transaction on July 4 that provides the Australian diamond company full ownership of the world-class Ekati Mine, which will significantly elevate Burgundy's efforts to deliver high-end cut and polished diamonds mined in Canada's Arctic to global markets.
You can read a complete breakdown of Ekati, Burgundy, and the opportunity the mine will play for the company at Burgundy set to buy Ekati diamond mine in the March 14, 2023 edition of North of 60 Mining News.
"Burgundy is well-positioned for growth, with significant value to be delivered to all stakeholders through our fully integrated end-to-end value chain now including the global scale Ekati asset," said Burgundy Diamond Mines CEO Kim Truter. "Burgundy investors have overwhelmingly supported and endorsed this acquisition, and they are showing great interest in producing sustainable and valuable natural diamonds via mines in Canada and bringing them to market through our innovative business model."
Considering previous operator Dominion paid a massive US$1.2 billion to operate the mine for only a few short years before filing bankruptcy, Burgundy has agreed to pay roughly US$136 million, nearly a tenth of the cost.
Before Burgundy's ownership, Arctic Canadian Diamond Company gained possession of Ekati by assuming approximately US$70 million of Dominion's debt and the obligations to reclaim the mine site upon closure of the diamond mine.
Perhaps due to unforeseen challenges, Arctic Canadian Diamond opted to sell the property to Burgundy, which it sees as a win for the North regardless of ownership.
"I believe that this transaction is a significant positive development for Ekati and for the North," said Arctic Canadian Diamond President and CEO Rory Moore. "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."
Going into 2023, Ekati hosted 48.5 million metric tons of reserves averaging 0.5 carats per metric ton (26.1 million carats) of diamonds.
These reserves, however, do not include the large quantities of diamonds that could be recovered with an innovative underwater mining system developed by Arctic Canadian.
Moore says the underwater remote mining system "has the potential to significantly increase the mine life at Ekati and thereby provide the opportunity for Arctic to continue to make a positive socio-economic contribution to the North for many years to come."
With an estimated 80 million carats mined historically since its opening in 1998, nearly 30 million in reserves and an inestimable quantity submerged underwater, the life of Ekati is still going strong, and if Burgundy plays it right, another 20 years could be viable for this Far North diamond mine.