Burgundy Diamond Mines has signed a fuel offtake agreement for 2025 with Macquarie Bank, under which the latter now owns the diesel in the Ekati diamond mine’s fuel tanks and supplies diesel to the project as it is required.
Due to the remote Arctic location of Burgundy’s cornerstone Ekati mine, an inventory resupply campaign is conducted annually via the Tibbitt to Contwoyto Winter Road, typically over an eight-week period.
As a result, the majority of Ekati’s annual procurement cash outflows occur over several short months resulting in working capital challenges each year. The new agreement provides a mechanism that enables Burgundy to reduce seasonal volatility of its operating cash outflows.
For 2025, this will provide a working capital benefit of approximately $45 million which will be realized during Q1.
“We are very pleased to confirm this innovative approach which spreads our fuel resupply expenditures over the full year versus one quarter. This promising strategy offers potential to become an annual process for Burgundy and is structured with potential for it to be a multi-year agreement,” said Kim Truter, CEO of Burgundy.
Theodor Lisovoy, Managing Editor, Rough&Polished
