Burgundy Diamond Mines reported a significant decline in revenue from the Ekati mine’s rough output during the second fiscal quarter, with a 27% drop compared to the same period last year. The company disclosed that it sold 1 million carats from the Canadian deposit, generating $106 million in sales for the quarter ending June 30. This marked a decrease from the sale of 1.3 million carats, which garnered $145 million in revenue a year ago. The average price per carat also fell by 5% to $103.
CEO Kim Truter attributed the ongoing price suppression in the diamond market to inventory accumulation within the supply chain. Despite these challenges, Burgundy continued its operations during the quarter, mining ore from Ekati’s Sable open pit and Misery underground operation. Notably, 75% of the ore processed came from the Sable pit. The company also progressed with the development of the open-pit operation at Point Lake, aiming to commence production there by early 2025.
Production volume decreased by 10% to 1.2 million carats for the quarter due to lower ore processing stemming from maintenance activities at the processing plant. Burgundy reported rough diamond inventory worth approximately $100 million by the end of June, and its debt increased to $63.2 million from $43.7 million at the end of March.
Looking ahead, Truter expressed optimism about a potential recovery in rough diamond prices, citing discussions with industry experts who foresee tightening supply-demand dynamics favoring price increases. Burgundy acquired the Ekati mine for $136 million in March 2023 from Arctic Canadian Diamond Company.
