With the acquisition of the Ekati mine, Burgundy Diamond Mines anticipates increasing volumes of rough diamonds for sale and expanding the cutting, polishing and sale of fancy-coloured polished luxury diamonds
Arctic Canadian Diamond to sell Ekati diamond mine to Burgundy Diamond Mines. (Credit: Arctic Canadian Diamond Company)
Burgundy Diamond Mines signed a binding share purchase agreement with Canadian mining company Arctic Canadian Diamond to acquire the latter’s Ekati diamond mine and other assets in the Northwest Territories of Canada for $136m.
Post transaction, the Australia-based company is said to become the largest ASX-listed diamond company by fully acquiring Arctic Canadian Diamond’s assets.
Burgundy Diamond Mines shareholders will review the proposed acquisition, where equity will be secured through a conditional placement to generate up to $150m.
Located in the Lac de Gras region of the Northwest Territories, the Ekati mine is a surface and underground diamond mine which began production in 1998.
Upon closing the acquisition, the mining company expects to optimise Ekati diamond mine’s performance and extend mine life through different strategies.
These include underwater remote mining, assessment of the Jay deposit and Fox underground opportunities, and systematic exploration by utilising newly applied machine learning and artificial intelligence technology.
With the acquisition of the Ekati mine, Burgundy Diamond Mines anticipates increasing volumes of rough diamonds for sale and expanding the cutting, polishing and sale of fancy-coloured polished luxury diamonds.
Burgundy Diamond Mines CEO Kim Truter said: “This is an exciting and transformational acquisition for Burgundy with the potential to generate significant and growing returns for our shareholders.
“The acquisition of Ekati is complementary to Burgundy’s vertically integrated business model where it can directly produce rough fancy-coloured diamonds at Ekati and then cut and polish them in our facilities in Perth to go into high-end jewellery designs.”
Subject to financing and Burgundy Diamond Mines shareholders’ approval, the transaction is expected to close in late April 2023.