Arctic Canadian Diamond Company logo is seen in this undated handout. THE CANADIAN PRESS/HO
YELLOWKNIFE – An Australian company is set to buy all of Arctic Canadian Diamond Company Ltd.’s assets, including the Ekati diamond mine in the Northwest Territories.
Burgundy Diamond Mines has entered into a binding share purchase agreement with Arctic for approximately US$136 million.
The deal is dependent on financing and the approval of Burgundy’s shareholders, which is expected in late April.
An announcement from Arctic says the sale will secure continued operations and longevity for the mine.
Ekati, located approximately 300 kilometres northwest of Yellowknife, opened in 1998 and employs about 1,100 people.
As of November 2022, Arctic says the mine has produced roughly 90.8 million carats, including a 186-carat diamond that was recovered and sold in 2016.
“I believe that this transaction is a significant positive development for Ekati and for the North,” Rory Moore, president and chief executive officer of Arctic, said in a statement Monday.
“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.”
Arctic bought Ekati in February 2021 after former owner Dominion Diamond Mines went into creditor protection and a sale to Dominion’s parent company, The Washington Companies, fell through.
Burgundy said the life of the mine is expected to end in 2028. Like Arctic, it said it intends to explore options to extend the mine’s life, including underwater remote mining and the development of the Jay deposit or Fox underground.
“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,” Michael O’Keefe, Burgundy executive chairman, said in a statement.
This report by The Canadian Press was first published March 14, 2023.
