Burgundy Diamond Mines (ASX:BDM,OTC Pink:BDMMF) has paused plans for additional growth on the Ekati diamond mine, saying diamond costs have fallen at the very least 20 % because it acquired the challenge.
In a letter to RJ Simpson, premier of Canada’s Northwest Territories (NWT), Burgundy stated that together with the lowering costs, the diamond trade has been receiving “little or no assist.”
“Environmental necessities are getting unnecessarily extra onerous, authorities companies are rigid to alter and the burden positioned on the asset is rising,” the corporate stated, including that it might must revisit the viability of the Ekati asset and deal with development elsewhere ought to these issues proceed.
Burgundy stated this consequence can be “tragic,” noting that Ekati’s undeveloped diamond assets are giant sufficient that the property may function till 2040 and past if it had been to obtain adequate assist.
Notably, the Jay pipe represents “one of many largest undeveloped kimberlite pipes on the planet.”
Burgundy has 5 key areas the place it needs assist: mine reclamation provisioning, the diamond royalty valuation course of, mineral useful resource act laws growth, environmental allowing and water administration necessities.
In line with the corporate, operational burdens within the NWT could possibly be alleviated ought to the federal government make the requested modifications and scale back laws in these key areas.
Burgundy additionally believes that the mindset within the north wants to alter from that of “closure” to “alternative,” saying that “there isn’t a cause that diamond mining can not proceed at scale for the following 25 years.”
No public assertion had been launched by the NWT on the time of this writing, however Cabin Radio reported {that a} spokesperson for Simpson stated the federal government is “taking the time wanted to work with colleagues and related departments to find out how, and if” the considerations and helps proposed by Burgundy may be addressed.
The Ekati diamond operation is positioned within the Lac de Gras area of the NWT, roughly 300 kilometers northeast of Yellowknife. It started manufacturing in October 1998, with exploration packages relationship again to 1981.
Burgundy bought Ekati in July 2023, and mining presently takes place on the Sable open-pit mine and Distress underground mine. The corporate has withdrawn its utility for underground growth at Sable.
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Securities Disclosure: I, Gabrielle de la Cruz, maintain no direct funding curiosity in any firm talked about on this article.