Burgundy Halts Sales to Shareholder Over Possible Rule Breach

By Rob Bates | October 08, 2025

Burgundy Diamond Mines, the Australian owner of the Ekati mine in Canada’s Northwest Territories (pictured), has halted transactions with one of its key shareholders, Antwerp-based Choron Group, after it was told certain sales may have breached a stock exchange rule governing “related party” transactions.

Choron Group provided Burgundy with $24.9 million in short-term financing in 2023. The loan was meant to be settled with sales of rough diamonds to Choron.

In an Oct. 7 filing with the Australian Securities Exchange (ASX), Burgundy said any rough sales it made to Choron “were priced at the average of two independent valuations conducted by experienced diamond valuators appointed by an independent third party. This approach accelerated the inventory turnover cycle and ensured there was no unsold inventory, as is often the case in the company’s traditional sales channels.”

However, Burgundy noted, ASX’s “Listing Rule 10.1 requires shareholders to approve agreements for the sales of assets to related parties in certain circumstances.” Choron founder Anshul Gandhi is a member of Burgundy’s board of directors.

Following discussions with the exchange, Burgundy said it “has suspended sale of inventory to Choron, pending ASX’s determination [on whether the listing rule was breached], and anticipates seeking shareholder approval in relation to the matter as well as an expert report to opine on whether the transaction was fair and reasonable.”

Burgundy added that “sales of diamonds to [its] other customers are continuing.”

On Sept. 28, the ASX halted trading in Burgundy’s shares at the company’s request, as the miner searches for external funding. Burgundy said in a Sept. 29 statement that it had applied for a loan from the Canada Enterprise Emergency Funding Corporation (CEEFC) “under its Large Enterprise Tariff Loan Scheme.

“[Burgundy] has been advised that it has been approved as eligible for such funding of up to 150 million [Canadian dollars] and is now undergoing a due diligence process with CEEFC,” the statement said. “That process is expected to conclude in a matter of weeks.”

It said that “the board and management of the company continue to pursue all other avenues of attracting external funding in what is a highly challenged time for the global diamond industry.”

(Photo courtesy of Burgundy Diamond Mines)