Canada’s first diamond mine, in the Northwest Territories (NWT), has now produced over 100 million carats of the expensive gemstones since it opened in the fall of 1998. The remote northern site runs 24 hours per day, 365 days a year.
The project’s operator, Australia’s Burgundy Diamond Mines Ltd (ASX: BDM), announced the milestone on Tuesday.
However, despite continuous production for decades, the company says the site won’t be running out of diamonds until 2040, ideally. There are still 140 million carats remaining, according to an indicated resource estimate. The Ekati mine holds the world’s third-largest diamond deposit.
“Operating 24/7 in a remote sub-Arctic location requires ingenuity, grit, and a commitment to excellence,” the company said in a LinkedIn post last week. “This accomplishment, reached on Sept. 28, 2024, reflects the dedication and hard work of every individual at Ekati over the past two and a half decades.”
Burgundy acquired the operation from the private company Arctic Canadian Diamond in June last year. Its other primary asset is the Naujaat Diamond Project in Nunavut.
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Is Burgundy a good investment?
At this point in time, it’s a questionable prospect. The diamond miner’s shares have slid by over 32 per cent in the past year.
Furthermore, the company postponed a major expansion at one of the mine’s pits in September. This is of potential concern when considering that Burgundy previously said the development would be critical for Ekati’s future.
Diamond prices have dropped by over 20 per cent since the company acquired the project. This is partially attributable to the growing popularity of lab-grown diamonds. A double-whammy of sorts.
“We know that some of our biggest diamond market purchasers have not recovered post-Covid, and that continues to have an impact on our NWT diamond mines,” NWT MLA, Caitlin Cleveland, said in an interview on Monday.
Despite these negative recent developments, those who have optimism for the diamond market in the long-term may consider Burgundy to be a worthwhile investment.
Rio Tinto Ltd (ASX: RIO) (NYSE: RIO) is another company actively mining diamonds in the NWT. The major operator’s Diavik mine has produced over 3.3 million carats since 2003. The site’s resources will be depleted by 2026.
Also, De Beers Canada, which runs the Gahcho Kué operation. There are three major diamond mines in the territory.
rowan@mugglehead.com
