“Environmental requirements are getting unnecessarily more onerous, government agencies are inflexible to change and the burden placed on the asset is increasing,” the company said, adding that it may need to revisit the viability of the Ekati asset and focus on growth elsewhere should these problems continue.
Burgundy said this outcome would be “tragic,” noting that Ekati’s undeveloped diamond resources are large enough that the property could operate until 2040 and beyond if it were to receive sufficient support.
Notably, the Jay pipe represents “one of the largest undeveloped kimberlite pipes on the planet.”
Burgundy has five key areas where it wants help: mine reclamation provisioning, the diamond royalty valuation process, mineral resource act regulations development, environmental permitting and water management requirements.
According to the company, operational burdens in the NWT could be alleviated should the government make the requested changes and reduce regulations in these key areas.
Burgundy also believes that the mindset in the north needs to change from that of “closure” to “opportunity,” saying that “there is no reason that diamond mining cannot continue at scale for the next 25 years.”
The Ekati diamond operation is located in the Lac de Gras region of the NWT, approximately 300 kilometers northeast of Yellowknife. It began production in October 1998, with exploration programs dating back to 1981.
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
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