CALGARY, Alberta, May 14, 2026 (GLOBE NEWSWIRE) -- Burgundy Diamond Mines Limited (ASX:BDM) (Burgundy or the Company) and its subsidiary Arctic Canadian Diamond Company Ltd. ("ACDC") today, provided an update regarding their ongoing court-supervised proceedings under the Companies' Creditors Arrangement Act ("CCAA").
On Monday May 11, the Supreme Court of British Columbia granted ACDC a further extension of the stay of proceedings originally granted on May 1. The stay has been extended until July 28, and the Court also approved an interim Debtor-in-possession financing arrangement as well as the commencement of a sales and investment solicitation process in respect of ACDC and its assets. Burgundy reaffirms its commitment to employees, contractors, Indigenous partners, governments, local businesses, and northern communities while continuing operations at the Ekati Diamond Mine during the restructuring process.
"We recognize the importance of Ekati Diamond Mine to the Northwest Territories economy and to the many employees, contractors, businesses and communities that rely on the operation," said Jeremy King, Chief Executive Officer of Burgundy Diamond Mines.
"We understand the concern that the CCAA process creates for stakeholders, and we remain focused on maintaining safe and responsible operations, while working toward a long-term solution for the business."
Recent public commentary regarding Burgundy's financial position and the federal government-backed Large Enterprise Tariff Loan ("LETL") facility has not fully reflected the broader operational and market realities facing the global natural diamond industry and remote northern mining operations.
Since acquiring Ekati in July 2023, Burgundy has invested substantial capital into maintaining and extending operations, including:
- Funding and extending the Misery underground mine life
- Completing pre-feasibility and advancing feasibility studies for the Fox and Sable underground projects
- Supporting ongoing employment and northern procurement
- Continuing participation in critical northern infrastructure initiatives, including the annual winter road system.
Burgundy emphasized that:
- Ekati is the sole operating asset controlled by Burgundy.
- Ekati is a large-scale, remote, fly-in fly-out sub-arctic mining operation with significant operating and sustaining capital requirements.
- Burgundy shareholders have not received any dividends or distributions of any kind since the acquisition and ongoing funding of the Ekati Diamond Mine.
- Burgundy has implemented significant cost reductions across its operations, including adjusting the Ekati operating model, and closing its Perth manufacturing facility, Antwerp sales office, and Calgary corporate office.
- Burgundy funds significant annual environmental insurance and rehabilitation premiums for the environmental bonds which underwrite the ultimate rehabilitation of the Ekati site. Approximately US$95 million in cash has been posted by Burgundy and is held on trust by the GNWT for this purpose, and the total amount of environmental bonds in place with large insurance groups is approximately US$140 million.
The C$175 million LETL facility has been instrumental in sustaining ongoing operations, ensuring payments to employees, contractors, and suppliers across the Ekati operation and the broader northern supply chain. As a vital support mechanism during a period of unprecedented global disruption in the natural diamond industry, the facility is designed to provide an operational bridge until market conditions stabilize.
Prior to the commencement of the CCAA process, Burgundy also received financial support from an existing shareholder and director to support operational continuity during a prolonged downturn in the natural diamond sector.
These funding initiatives, cost reductions and other operational measures implemented by the Company, were critical in allowing Ekati to continue operating, preserving employment, supporting contractors and suppliers, and maintaining economic activity in the Northwest Territories during an exceptionally challenging market environment.
The Company's current financial challenges reflect sustained pressure across the sector, including:
- A significant decline in natural diamond prices
- Increased competition from lab-grown diamonds
- Global financing constraints
- Geopolitical instability
- Tariff-related uncertainty, and
- Materially higher fuel and operating costs impacting remote northern mining operations.
Burgundy's financial challenges also reflect significant external cost pressures impacting remote northern mining operations. Ekati is a large-scale, remote, fly-in fly-out sub-arctic mining operation that depends heavily on diesel fuel for mining activities, power generation, heating, transportation, and winter road logistics. The recent escalation of conflict in the Middle East and resulting disruption to global fuel markets, materially increased diesel and freight costs during a critical operating period for the Company. The increase in fuel and related supply chain costs had a significant impact on the Ekati operation and was not anticipated at the time the LETL facility was approved.
"The natural diamond sector is experiencing one of the most challenging market environments in decades," said King. "Despite these conditions, Burgundy and its stakeholders continued to invest significant capital and operational resources into Ekati because of the long-term strategic importance of the asset, its workforce, and the economic contribution it makes to the Northwest Territories and Canada. The issue we are addressing is a severe cyclical downturn in diamond prices and market liquidity, rather than the underlying quality or long-term potential of the Ekati asset."
The CCAA process is intended to stabilize operations, preserve employment, protect enterprise value, and provide the necessary framework to pursue restructuring and long-term solutions. Ekati will continue operating during the CCAA process, with continued focus on safety, environmental stewardship, and operational continuity.
The Company also acknowledges outstanding obligations to its Impact Benefit Agreement partners, the Hamlet of Kugluktuk & Kitikmeot Inuit Association, Akaitcho Treaty 8 (Yellowknives Dene First Nation & Lutsël K'é Dene First Nation),?Tli?cho Government and North Slave?Métis Alliance.
"We value our relationships with Indigenous governments and community partners and recognize the importance of these commitments," said King. "We are actively working within the CCAA framework to address outstanding obligations as responsibly and expeditiously as possible."
Burgundy will continue to engage constructively with territorial and federal governments, Indigenous partners, employees, lenders, and suppliers, throughout the restructuring process.
"Maintaining operations during this process is critical to preserving jobs, supporting northern communities, and maximizing value for stakeholders," said King. "Our focus remains on working to secure a stronger financial position and establishing a sustainable path forward for Ekati and the broader northern diamond industry."
Further updates will be provided as the CCAA process progresses.
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About Burgundy Diamond Mines Limited
Burgundy Diamond Mines is a premier, independent, diamond company focused on the mining and production of diamonds. Burgundy's strategic approach involves building a balanced portfolio of diamond projects located in favourable jurisdictions, including the globally ranked Canadian mining asset Ekati. Burgundy's mine to market business model ensures total chain of custody and provides traceability along every step of the process, safeguarding the ethical production of the diamonds from mine to point of sale. Founded in Perth, Western Australia, Burgundy is led by a world-class management team and Board, combining global expertise with a commitment to sustainable and responsible diamond operations.
Caution regarding Forward Looking Information
This document contains forward looking statements concerning Burgundy Diamond Mines Limited. Forward looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward-looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements in this document are based on Burgundy's beliefs, opinions and estimates as of the dates the forward-looking statements are made, and no obligation is assumed to update forward looking statements if these beliefs, opinions or estimates should change or to reflect other future developments.
