Burgundy in trading halt ahead of key Ekati mine update

[Ben Graham]

Burgundy Diamond Mines (ASX: BDM), owner of the Ekati diamond mine in Canada’s Northwest Territories, halted trading of its shares on the Australian Securities Exchange on Wednesday, fuelling speculation about its next move.

The miner said the trading pause was due to an upcoming operational update, with shares set to resume trading in Sydney on Friday.

Adding to the uncertainty, some Ekati workers were reportedly instructed not to travel to the remote site this week, according to local media outlet Cabin Radio.

Burgundy acquired Ekati in March 2023 through its $136-million purchase of Arctic Canadian Diamond.

Since then, it has grappled with mounting financial pressure amid a downturn in the global diamond market. Earlier this year, Burgundy said it would focus on achieving “financial flexibility” in 2025, including steps to ensure adequate working capital.

The company has also undergone significant leadership changes, including the retirement of chief executive officer Kim Truter in May. He was succeeded by Jeremy King.

Ekati reached a major milestone in 2024, surpassing 100 million carats produced and sold over its 26-year history. Still, the trading halt comes at a critical time for the region’s diamond industry.

All three active diamond mines in NWT face face eventual shutdowns. Rio Tinto’s (ASX, LON, NYSE: RIO) Diavik mine is scheduled to close in 2026, while De Beers’ Gahcho Kué mine is expected to operate until 2030. Ekati’s long-term future remains uncertain.

The mines are located hundreds of kilometres northeast of Yellowknife and are accessible only by air or seasonal winter roads.

A recent report by research firm Impact Economics warns that mine closures could cost the territory 1,500 jobs and prompt more than 1,100 residents to leave.