Ekati diamond mine sold to Australian miner

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The Ekati diamond mine sold to an Australian mine

The Ekati mine, located northeast of Yellowknife, has been mining diamonds since 1998.

Calgary-based Arctic Canadian Diamond has announced the sale of the Ekati mine in the Northwest Territories to Australian-based Burgundy Diamond Mines for US$136 million.

The sale must now be finalized by Burgundy's shareholders, which is expected to take place at the end of April, according to a press release on Monday.

Calgary-based Arctic Diamond had acquired the Ekati mine just over two years ago when it was facing financial difficulties and placed itself under the Creditors Arrangement Act. Since this sale, the financial situation of the mine has improved.

Burgundy Diamond Mines owns mines in Australia, Botswana, Peru and Canada. In Canada, the company owns the Naujaat diamond mine project located near the community of the same name, in Nunavut. In Australia, it operates the continent's only commercial diamond cutting and polishing facility.

Arctic Canadian's Chief Financial Officer, Kristal Kaye, said in a statement that this sale will greatly improve the company's financial position and our goal of extending the life of the Ekati mine.

The release does not mention what this sale means about the supply of rough diamonds to diamond processors in the NWT, funding for future environmental remediation work, or how the sale could extend the life of the mine.

Burgundy miner writes in a press release that Ekati can be mined until 2028. The Australian miner also indicated that it intends to study the possibilities of extending the life of the mine, including the remote operation of a submerged mine and the development of the Jay deposit or the underground development of Fox.

The closure of the mine will be the beginning a long and costly process of environmental remediation.

The Ekati Diamond Mine is located 300 kilometers northeast of Yellowknife. It employs approximately 1,100 people, including 486 northern residents.

With information from CBC

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