Ekati diamond mine all but sold for $136M US to Australian diamond company

An Australian company is set to own the N.W.T.'sEkati diamond mine, located about 300 kilometres northeast of Yellowknife near Lac de Gras.

The Arctic Canadian Diamond Company, which currently fully owns the mine, announced Monday it has agreed to sell all of its shares and assets to Burgundy Diamond Mines Limited. Burgundy Diamond Mines is a public company listed on Australia's ASX stock exchange.

The $136M US ($187MCdn)deal needs to be finalized by Burgundy's shareholders, but that is expected in late April, according to Monday's press release.

Calgary-based Arctic Diamond bought Ekati a little more than two years ago when the mine was struggling financially and then-owner Dominion Diamondwent into bankruptcy protection. Since then, the economic fortunes of the mine have improved.

According to Reuters, Burgundy Diamond Mines has operations in Australia, Botswana, Peru and Canada. In Canada, Burgundy owns the Naujaat diamond project near Naujaat, Nunavut. In Australia, the company operates the continent's only commercial diamond cutting and polishing facility.

Arctic Canadian's chief financial officer,Kristal Kaye, said in apress releasethat the sale "will greatly improve the financial foundation of the company and our goal of extending mine life at Ekati."

What the pending sale could mean for rough diamond supply to N.W.T.-based diamond processors, financing for future environmental remediation, or how the sale might extend the mine's life were not addressed in the press release. But a spokesperson for Arctic Canadian Diamond said a representative would be made available later to address those and other questions.

The Ekati diamond mine is now anticipated to "support a mine life to 2028," according to a press release from Burgundy.The company also said it intends to explore options to extend mine life, includingunderwater remote miningand the development of the Jay deposit and/or the Fox underground development.

The eventual closure of the mine would be the start of a long and expensive environmental remediation process.

The Ekati mine employs approximately 1,100 people, including 486 northerners.