Weak Rough Prices Hit Ekati Sales

Revenue from the Ekati mine’s rough output fell 27% during the second fiscal quarter, according to owner Burgundy Diamond Mines. 

The company sold 1 million carats from the Canadian deposit for $106 million for the three months that ended June 30, it said last week. That compares to the sale of 1.3 million carats for $145 million during the same period a year ago. Meanwhile, the average price slipped 5% to $103 per carat. The second-quarter results were also lower than the 1.3 million carats the company sold for $117 million in the first quarter.  

“In terms of the diamond market, prices continue to be suppressed due to inventory built up in the middle part of the supply chain,” Burgundy CEO Kim Truter said.  

During the January-to-March period the company mined ore from Ekati’s Sable open pit as well as its Misery underground operation, with 75% of total ore processed originating from Sable. The miner also advanced its development of the open-pit operation at Point Lake, and it expects production at the area to begin in early 2025, it said.  

Production slipped 10% to 1.2 million carats for the three months as the miner processed a lower proportion of ore due to maintenance at its processing plant.  

Burgundy had approximately $100 million in rough inventory at the end of June. Its debt increased to $63.2 million in the second quarter from $43.7 million as at March 31. The company believes rough prices will recover in the near term. 

“Based on discussions with experts in the field, we believe it is just a matter of time before we start to see the diamond price move upwards as the supply-demand equation tightens,” Truter added.  

Burgundy purchased Ekati from Arctic Canadian Diamond Company for $136 million in March 2023. 

Image: An aerial view of the Ekati mine. (Burgundy Diamond Mines)