PERTH (miningweekly.com) – ASX-listed Burgundy Diamond Mines will move to complete the acquisition of the Ekati diamond mine, in Canada, after shareholders approved the $136-million deal and the $150-million conditional placement to finance the deal.

Burgundy earlier this year announced an agreement with Arctic Canadian Holdings to acquire all of the common shares of the company, as well as all of the common shares of Arctic Canadian Diamond Marketing, which is responsible for managing the supply chain, sorting, preparation, marketing and sales of the Ekati rough diamonds.

The $136-million consideration will comprise of $21-million shares in Burgundy, a deferred $15-million cash payment, which is due in December this year, and Burgundy repaying $100-million of outstanding debt.

In addition, Burgundy has agreed to a potential earn-out payment to the vendor of $7.5-million in cash in the first quarter of 2024 if 2023 earnings before interest, taxes, depreciation and amortisation (Ebitda) of the Arctic companies equals or exceeds $200-million, and $7.5 million in cash in the first quarter of 2025 if 2024 Ebitda of the Arctic companies equals or exceeds $200-million.

Burgundy executive chairperson Michael O’Keeffe said on Friday that the company was pleased with the overwhelming support from shareholders.

“This is a terrific endorsement of our innovative strategy, with our vertically integrated business model now completed and in place to capture margins across the full value chain,” he said.

CEO Kim Truter said the acquisition provided Burgundy with the platform for sustained growth with significant value to be delivered to shareholders over multiple horizons.

“Ekati is a tier one asset in a tier one jurisdiction with significant blue sky beyond the current operations and production, which are world-class,” he said.

The Ekati operation sold 4.2-million carats in 2022, delivering revenues of $494-million and adjusted Ebitda of $200-million.

The current mine life of Ekati, including the addition of a new openpit development at Point Lake, runs to 2028. Exploration and project evaluation activities are ongoing, including the development of innovative mining techniques that could be used to extract the deeper resources from the Sable openpit, Fox openpit and Point Lake openpit. If successful, the mining of these deeper portions of existing orebodies would extend the life of Ekati.

Following the completion of the transaction, Burgundy will become the largest ASX-listed diamond company, and one of the largest listed diamond companies globally.

The acquisition is targeted for completion on July 1.