Burgundy Suspends Point Lake Mining After 67,700-Carat Bulk Sample
Burgundy Diamond Mines pauses open pit mining at Point Lake due to weak diamond prices, focusing instead on higher-margin underground operations at Misery. The company also prepares to unveil a new mine plan and Fox project study.
- Temporary suspension of Point Lake open pit mining
- Focus shifts to improved Misery underground production
- Layoffs and contractor reductions at Point Lake
- Upcoming mine plan and Fox underground pre-feasibility study
- Market conditions drive operational and cost adjustments
Market Pressures Force Strategic Shift
Burgundy Diamond Mines Limited (ASX, BDM) has announced a significant operational pivot in response to ongoing challenges in the rough diamond market. The company is suspending open pit mining at its Point Lake deposit, citing sub-economic conditions amid depressed diamond prices. This move reflects a broader industry trend where miners are prioritizing cost efficiency and higher-margin ore to weather market volatility.
Point Lake, From Promise to Pause
Point Lake, located just two kilometres from the established Misery underground operation, was a key focus for Burgundy since mid-2024. After preparing the site and extracting a bulk sample of approximately 67,700 carats in May 2025, the company assessed the deposit’s diamond grade and marketability. Despite technical modelling of various production scenarios, the current pricing environment rendered Point Lake mining uneconomical. Consequently, Burgundy has temporarily halted surface mining activities, resulting in layoffs and contractor reductions at the site.
Misery Underground, The New Operational Backbone
In contrast, the Misery underground operation remains fully active and has seen notable improvements in production rates thanks to enhanced mining techniques and better equipment utilization. Burgundy is recalibrating its operating model to sustain a viable mine plan focused on underground extraction without near-term surface operations. This strategic shift aims to optimise margins and reduce costs while maintaining steady output from Ekati’s core asset.
Looking Ahead, Mine Plan and Fox Project
Looking forward, Burgundy plans to release its inaugural company-issued mine plan by the end of July 2025. Alongside this, a pre-feasibility study for the Fox underground project; a high-value deposit last mined as an open pit in 2014; will also be published. Fox, situated about eight kilometres from the Ekati processing plant, represents a potential long-term growth opportunity. However, the timing and financial implications of this project remain to be seen, pending the study’s findings.
Navigating Uncertainty in a Volatile Market
Burgundy’s operational update underscores the challenges diamond miners face amid fluctuating market demand and pricing pressures. By prioritising higher-margin underground operations and pausing less profitable surface mining, the company is taking a pragmatic approach to safeguard its financial health. Investors will be watching closely for the upcoming mine plan and Fox project details to gauge Burgundy’s medium-term outlook and resilience.
Bottom Line?
Burgundy’s strategic pivot highlights the delicate balance between market realities and growth ambitions in diamond mining.
Questions in the middle?
- When might Point Lake mining resume if diamond prices improve?
- What financial impact will the suspension at Point Lake have on Burgundy’s near-term earnings?
- How will the Fox underground pre-feasibility study influence Burgundy’s long-term strategy?