13 March 2024
Burgundy Diamond Mines Limited (ASX: BDM) (Burgundy or the Company) is pleased to provide an update regarding the terms and conditions of its reclamation surety bonds.
Burgundy is required to post securities with key government agencies to ensure reclamation is completed across its mining properties, as required by relevant legislation of Canada and the Northwest Territories. The security is provided in the form of either cash, letters of credit or surety bonds.
Burgundy has an agreement with Canadian surety providers whereby they provide surety bonds to the Government of the Northwest Territories to secure certain environmental obligations of Burgundy owed to the Government of the Northwest Territories in connection with the operation of the Ekati diamond mine. Bond values are reduced by each payment of cash collateral provided by the Company.
As of 31 December 2023, Burgundy maintained reclamation deposits of approximately US$48 million, with additional cash collateralisation of surety bonds of approximately US$157 millio?which are due in the second quarter of calendar 2024.
Burgundy has secured an agreement in-principle with the surety providers to extend the cash collateralisation schedule of the remaining obligation over four years, instead of full payment by the end of June 2024. The revised cash collateralisation schedule would see Burgundy make quarterly instalments of C$14.5 million, concluding with a final payment of ~C$9.7 million in 03 2027. The revised payment schedule is consistent with the existing Ekati life of mine schedule and is subject to entry of long form documentation with the surety providers.
Burgundy CEO and Managing Director, Kim Truter welcomed the long-term partnership with the surety providers as the Company continues to build for the future.