Burgundy Cuts Full-Year Revenue Forecast

Burgundy Diamond Mines has reduced its revenue guidance for the full year amid weak demand and low prices for its rough.

Revenue for 2024 will now be between $430 million and $460 million, rather than the $460 million to $500 million the company originally projected, it said Tuesday. The move reflects a prolonged slowdown in the market.

During the third quarter, revenue grew 30% to $118 million despite a 28% drop in the average price to $83 per carat, as sales volume surged 80% to 1.4 million carats.

The company also lowered its production outlook to 4.7 million to 5 million carats, compared to its previous 4.9 million to 5.3 million carats. The revision comes as Burgundy transitions from the Sable area to the Point Lake open pit and processes lower-grade ore, it explained.

During the period, the miner recovered a 36-carat, fancy-vivid-yellow diamond, as well as an 11.3-carat, fancy-yellow diamond. The company currently has a rough-diamond inventory of 1.1 million carats, valued at $73.2 million, it noted.

Burgundy expects to hold two auctions during the fourth quarter that ends December 30. The second one to take place during that period will be a larger-than-normal event, including inventory carried over from the previous cycles and rough brought forward, enabling Burgundy to capitalize on the timing, as retailers traditionally use this period to stock up for the holiday season, it explained.

“Despite a soft diamond market, the Ekati product continued to generate strong buyer interest and high sell-through rates,” the company said.

Image: The Ekati mine. (Burgundy Diamond Mines)