Burgundy Diamond Mines (ASX: BDM), has halted open pit operations at Point Lake within its Ekati diamond mine in Canada’s Northwest Territories, resulting in the layoff of hundreds of workers and contractors.
The company, which went on trading halt on Wednesday, cited poor market conditions as the reason for halting operations. Communications manager Ariella Calin told CBC News that the ongoing downturn in the diamond market has rendered the Point Lake project “sub-economic.”
The site will be placed under care and maintenance to allow for a rapid restart should market conditions improve, Calin said.
Operations will continue at Ekati’s Misery underground mine, located roughly two kilometres from Point Lake.
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.
Burgundy continues in trading halt until the publication of an official update on the matter.
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Burgundy Diamond Mines (ASX: BDM), has halted open pit operations at Point Lake within its Ekati diamond mine in Canada’s Northwest Territories, resulting in the layoff of hundreds of workers and contractors.
The company, which went on trading halt on Wednesday, cited poor market conditions as the reason for halting operations. Communications manager Ariella Calin told CBC News that the ongoing downturn in the diamond market has rendered the Point Lake project “sub-economic.”
The site will be placed under care and maintenance to allow for a rapid restart should market conditions improve, Calin said.
Operations will continue at Ekati’s Misery underground mine, located roughly two kilometres from Point Lake.
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.
Burgundy continues in trading halt until the publication of an official update on the matter.