Burgundy announces C$115m Canadian tariff loan to stabilise Ekati
Diamond miner Burgundy Diamond Mines has secured up to C$115-million in funding through Canada’s Large Enterprise Tariff Loan (LETL) facility, providing critical liquidity to sustain operations at its Ekati mine in the Northwest Territories.
The fully secured term loan, granted to Burgundy’s wholly owned subsidiary Arctic Canadian Diamond Company by the Canada Enterprise Emergency Funding Corporation (CEEFC), will rank senior to all existing debt and carry a maximum seven-year term.
The facility has been established to support large Canadian enterprises impacted by actual or potential tariffs and countermeasures, with Burgundy citing the current 50% US tariff on imports from India – where about 90% of the world’s rough diamonds are cut and polished – as a key pressure point.
Burgundy CEO and director Jeremy King said on Friday the funding was critical to maintaining operations while the company worked to lower its cost base and refocus on higher-value assets within the Ekati complex.
“This loan is critical to assisting Burgundy and Ekati as it attempts to navigate rough diamond markets impacted by the current 50% US tariff on imports from India, where 90% of rough diamonds globally are cut and polished,” King said.
He added that the support of senior debt holders, environmental surety providers and trade creditors had enabled the company to restructure its balance sheet in line with the requirements of the LETL facility.
The loan will attract interest at the three-month Canadian Overnight Repo Rate Average plus 200 basis points for the first two years, stepping up thereafter. Interest accrued during the initial two-year period may be capitalised as payment-in-kind.
Funds will be used to support ongoing underground development, the reactivation of the Sable openpit, completion of the Fox wash plant, working capital requirements and financing costs.
As part of the funding package, Burgundy has also agreed to issue CEEFC more than 1.1-billion unlisted warrants with a ten-year expiry and an exercise price of A$0.017 a share. The warrants represent about 43% of the company’s issued share capital on a fully diluted basis, subject to shareholder and regulatory approvals for the majority tranche.
The funding is conditional on a broader financial restructuring, including the full subordination of existing senior debt, an extension of debt maturities and the capitalisation of interest for four years. Environmental surety bond providers have also agreed to subordinate their claims, while Arctic’s trade creditor position has been improved through negotiated discounts and structured repayment plans.
Operationally, mining continues at the Misery underground operation, with the processing plant operating on a two-weeks-on, two-weeks-off campaign basis since August 2025. Preparatory work has begun to re-enter the Sable openpit and complete the Fox wash plant to treat about six-million tonnes of low-grade stockpiled material.
Operations at the Point Lake openpit remain suspended pending an improvement in diamond prices for that product, while Burgundy has closed its Antwerp office as part of cost-reduction initiatives, shifting to outsourced auction and tender services.
The company said the LETL funding also provides a pathway to medium-term growth, including the planned establishment of underground operations at the high-value Fox deposit, which has an expected mine life of more than 12 years.
Burgundy’s shares remain suspended on the ASX following a voluntary trading halt implemented in September while the company finalised the LETL funding and broader restructuring process.
