The Ekati diamond mine in Canada will be shut down by court order after its owner, Burgundy Diamond Mines, failed to find a buyer for the asset.
"The sales process conducted…did not result in any compliant bids, and the interim funding available to the Burgundy respondents is fully exhausted," the company’s documents filed in the Supreme Court of British Columbia read, as quoted by Rapaport.
Since May this year, Burgundy has been involved in the court-supervised restructuring process for the mine, and received an extension of its creditor protection. However, it failed to yield any bids by the court-required due date, despite contacting 140 "potentially interested parties."
The regional government now requires the company to wind down the operations and proceed with land reclamation.
"The government of the Northwest Territories requires the urgent appointment of a receiver over the Burgundy respondents to conduct an orderly wind down of Ekati mine operations, and to oversee environmental remediation and reclamation activities," it said in the court filing.
According to the filing, Burgundy was expecting to run out of all available cash by July 17, if no further funding was obtained. The company’s debts included approximately C$175 million ($124.9 million) owed to the Canada Enterprise Emergency Funding Cooperation (CEEFC) as well as $79 million payable to other lenders.
Theodor Lisovoy, Managing Editor, Rough&Polished
