Burgundy concludes reclamation surety bonds agreement
August 14 2024 - 3:49PM
Burgundy Diamond Mines Limited
(
ASX:BDM) (
Burgundy or
the Company) is pleased to confirm that the
agreement with the surety providers in relation to the reclamation
bonds has been formally concluded and signed by all parties, in
line with previously agreed principles (see ASX announcement dated
March 13th, 2024).
Burgundy is required to post security with key government
agencies to ensure reclamation is completed across its mining
properties, as required by relevant legislation in Canada and the
Northwest Territories. The security is provided in the form of
either cash, letters of credit or surety bonds, or a combination of
these.
Significantly, Burgundy can confirm it has successfully
concluded the renegotiated cash collateralisation payment schedule
to extend over four years, consistent with Ekati’s current life of
mine plan, versus the previous terms requiring full payment in
Q2-2024. The revised cash collateralisation schedule1 provides for
quarterly instalments of ~US$11 million, concluding with a final
payment of ~US$7 million in Q3-2027 (see figure 1 below).
“This is a real game changer,” noted Kim Truter, CEO and
Managing Director of Burgundy Diamond Mines. “Our revised long-term
partnership and arrangement with our surety providers ensures our
closure obligations are funded, releases cash to fund our mine
extension options, and ensures we maintain a healthy cash reserve.
Furthermore it reduces future financial liability related to
reclamation requirements.”
“We remain increasingly optimistic regarding the attractiveness
and optionality at Ekati, our cornerstone mining asset. With tier
one infrastructure in place and a highly experienced operating
team, the incremental capital cost and low execution risk of the
mine life options are globally competitive. We also have
significant exploration potential on or adjacent to our property.”
said Truter.
Current conceptual mine life extension options include the
extension of Misery underground, moving underground at Sable,
developing an underground mine at Fox, processing high value Fox
stockpiles, optimising the Point Lake project currently in the
development stage, and implementing underwater remote mining
technology, if trials are successful. Burgundy is committed to
progressing work on the potential conceptual life of mine options
in the most environmentally responsible and sustainable way, with
support from regulators and local community stakeholders. The
Company is anticipating formally publishing a new mine plan within
the next 6 to 12 months.
Figure 1 – New payment schedule for reclamation surety
bonds1
1. Rounded numbers, actual amounts vary. Q1-2024
and Q2-2024 payments have been allocated to Q3-2024. C$:US$ price
conversion of 1.35 (as used in the ASX announcement dated 13 March
2024). This release does not include Point Lake reclamation
payments as they are secured under a separate agreement.
This announcement was authorised for release by the Board of
Burgundy Diamond Mines Limited.
Contacts
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About Burgundy Diamond Mines Limited
Burgundy Diamond Mines is a premier independent global scale
diamond company focused on capturing the end-to-end value of its
unique vertically integrated business model.
Burgundy’s innovative strategy is focused on capturing margins
along the full value chain of the diamond industry, including
mining, production, cutting and polishing, and the sale of
diamonds. By building a balanced portfolio of diamond projects in
favourable jurisdictions, including the globally ranked Canadian
mining asset, Ekati, and a diamond cutting and polishing facility
in Perth, Burgundy has unlocked access to the full diamond value
chain. This end-to-end business model with total chain of custody
provides traceability along every step of the process, with
Burgundy able to safeguard the ethical production of the diamonds
from mining to marketing and discovery to design. Burgundy was
founded in Perth, Western Australia. The company is led by a
world-class management team and Board.
Caution regarding Forward Looking
Information
This document contains forward looking statements concerning
Burgundy Diamond Mines Limited. Forward looking statements are not
statements of historical fact and actual events and results may
differ materially from those described in the forward-looking
statements as a result of a variety of risks, uncertainties and
other factors. Forward looking statements in this document are
based on Burgundy's beliefs, opinions and estimates as of the dates
the forward-looking statements are made, and no obligation is
assumed to update forward looking statements if these beliefs,
opinions or estimates should change or to reflect other future
developments.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a5446387-1c01-43b2-8763-7d39f2a59cb2