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Meet the ASX’s biggest diamond company
Burgundy Diamond Mines is set to acquire the world-class Ekati diamond mine from Arctic Canadian Holdings for a cold $209 …
Australian Mining.
Burgundy Diamond Mines is set to acquire the world-class Ekati diamond mine from Arctic Canadian Holdings for a cold $209 million.
Ekati is Canada’s first surface and underground diamond mine, which sits about 200km south of the Arctic Circle.
In 2022 alone, the Canadian mine sold 4.2 million carats, delivering revenue of over $742 million.
To fund the proposed acquisition, Burgundy will seek to generate $231 million in equity through a conditional placement.
The purchase amount includes $32 million in Burgundy shares and a deferred payment by Burgundy of $23 million in cash. Additionally, Burgundy will front the majority of the seller’s outstanding debt, roughly $154 million.
According to Burgundy, global demand and supply trends support a favourable long-term pricing outlook for rough diamonds.
Ekati has a current life of mine plan of six years, but the diamond company has said it would look at innovative mining techniques such as underwater remote mining and AI-driven exploration to extend the life of mine and access deeper resources.
“This is an exciting and transformational acquisition for Burgundy with potential to generate significant and growing returns for our shareholders,” Burgundy chief executive officer, Kim Truter, said.
“The acquisition of Ekati is complementary to Burgundy; we’ve been purchasing rough fancy-coloured diamonds from Ekati in recent years, then cutting and polishing them in our facilities in Perth to go into high-end jewellery designs,” he said.
“We view this acquisition as a wonderful marriage between Burgundy and the Arctic Companies, delivering immediate and meaningful production to our portfolio…
“As a result, Burgundy will become the largest ASX-listed diamond company and be well positioned for sustainable growth.”
Burgundy’s executive chairman, Michael O’Keefe, called the transaction a “genuine game-changer”.
“Having been involved with Burgundy since 2017, this exciting acquisition completes Burgundy’s vertically integrated businesss model; bringing some of the world’s most beautiful diamonds to market…” he said.
“We are confident that both Burgundy and Ekati have a very bright future and we expect this transaction will create significant value for all stakeholders.”
In September last year, Burgundy recovered its first diamond – a fancy yellow clocking in at 1.51 carat – at its Ellendale diamond project in WA.
