Transformational acquisition of the Ekati Diamond Mine, Canada

13 March 2023

14 March 2023

HIGHLIGHTS

  • Burgundy to acquire the world-class Ekati Diamond Mine (Ekati) in Canada’s Northwest Territories for total consideration of US$136 million (~A$209 million)
  • The Proposed Acquisition is transformational for Burgundy – post completion, the Company will become the largest ASX-listed diamond company and one of the largest listed diamond companies globally
  • In 2022, Ekati sold 4.2 million carats (Mcts) and delivered revenue of US$494 million and adjusted EBITDA of US$200 million
  • The Proposed Acquisition completes Burgundy’s strategy of becoming truly vertically integrated across the diamond value chain
  • To fund the Proposed Acquisiton, Burgundy will conduct an equity raising via a conditional placement to raise up to US$150 million (~A$231 million)

Burgundy Diamond Mines Ltd (ASX: BDM) (Burgundy or the Company) is pleased to announce that it has entered into a binding share purchase agreement (SPA)4 with Arctic Canadian Holdings LLC (Arctic Shareholder or the Vendor) to acquire 100% of the common shares of Arctic Canadian Diamond Company Limited (ACDC) and 100% of the common shares of Arctic Canadian Diamond Marketing N.V. (ACDM) (together with ACDC, the Arctic Companies) (the Proposed Acquisition).

ACDC is the 100% owner of all businesses, assets and other interests comprising Ekati, a producing diamond mine located in Canada’s Northwest Territories. ACDM is a marketing business responsible for management of the supply chain, sorting, preparation, marketing and sales of rough diamonds from Ekati.

Total consideration at closing for the Proposed Acquisition is US$136 million (~A$209 million), comprised of:

  • US$21 million (~A$32 million) in Burgundy ordinary shares, issued to the Vendor at the same issue price5 in the Placement (Scrip Consideration)6;
  • a deferred payment of US$15 million (~A$23 million) in cash in December 2023 to the Vendor (Deferred Payment); and
  • Burgundy will repay the majority of outstanding debt of ACDC of ~US$100 million (~A$154 million) (or such greater amount approved by Burgundy) (Debt Repayment)7

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