The Ekati diamond mine, the original diamond mine in Canada’s Northwest Territories, has a new owner—for the third time since 2017.
Perth, Australia-based Burgundy Diamond Mines has agreed to pay $136 million for 100% of the assets of Ekati’s current owner, Arctic Canadian Diamond Company (ACDC). ACDC also owns Canadamark, the country-of-origin certification program.
Burgundy owns and operates a diamond cutting and polishing facility in Australia, and is a current Ekati customer. Owning the mine will let Burgundy become “truly vertically integrated across the diamond value chain,” it said in a statement.
The acquisition will “result in a significant recapitalization of Arctic Canadian, which will secure continued operations and longevity for the mine,” said Burgundy’s statement. The mine has 1,100 employees, many of them from local Northern communities.
The mine was originally scheduled to close in 2025, though current plans call for it to remain open until 2029. Possible remote underground mining could extend the mine’s life for another decade.
In 2022, Ekati produced 4.2 million carats, which it sold for an average price of $117 a carat. Revenue was $494 million, and adjusted EBITDA was $200 million, according to the statement.
Burgundy is headed by Kim Truter, a 40-year mining industry veteran who most recently served as CEO of De Beers Canada from 2015 to 2019. Prior to that, he was chief operating officer of Rio Tinto Diamonds, as well as managing director of the now-closed Argyle mine in Australia, and president and chief operating officer of Diavik, the nearby mine in the Northwest Territories.
Mining entrepreneurs Michael O’Keeffe and Marc Dorion are also on the board of Burgundy, which also has active diamond exploration projects in Botswana and Canada.
The proposed transaction is subject to the approval of Burgundy’s shareholders. It is expected to close in late April 2023.
Ekati has been producing diamonds since 1998, though its recent history has been twisty and convoluted. In 2013, owner BHP sold it to Dominion Diamond Corp., which then owned 40% of the nearby Diavik mine. The miner had been called Harry Winston, after the famed jeweler it owned, but it sold that asset to Swatch Group in 2013 to buy Ekati.
After activist investors joined Dominion’s board, it was sold to the Washington Companies for $1.2 billion in 2017. In 2020, COVID-19 forced Ekati to temporarily close, and Dominion filed for insolvency protection soon afterward. The mine’s survival looked tenuous.
Eventually, a group of the company’s bondholders purchased the mine and renamed its new owner the Arctic Canadian Diamond Company.
Last month, Rio Tinto, the owner of the Diavik Diamond Mine, agreed to a $40 million investment that would extend that mine’s life until 2026.
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