Burgundy Diamond Mines has suspended production at one of the two active kimberlite pipes of its Ekati diamond project in Canada due to challenging market conditions.
Prior to the announcement, the company has halted trading in its securities at the Australian Stock Exchange (ASX) until July 18.
Point Lake kimberlite pipe is located approximately 2 kilometres from the established Misery underground operation. In May this year, the bulk sampling at the Point Lake was complete and 67,700 carats were recovered, which provided Burgundy with data on the diamond grade and marketability.
The company has deemed the Point Lake open pit operation as “sub-economic” in the current depressed diamond price environment. The subsequent decision to temporarily suspend open pit mining at Point Lake will lead to the layoff of some employees and the reduction of the number of contractors.
Meanwhile, it continues to exploit the Misery underground operation at Ekati as production rates have significantly improved in recent months thanks to improved mining techniques and equipment utilization.
“Linked to these improvements, the company is re-setting its operating model to support a viable adjusted mine plan without near term surface operations,” Burgundy said in a statement.
The company aims to soon publish a pre-feasibility study for the Fox underground project, a high value per carat deposit that was last mined as an open pit operation in 2014.
Theodor Lisovoy, Managing Editor, Rough&Polished
