How Burgundy’s Ekati Update Extends Mine Life and Boosts Fox Underground Value

Extending Ekati’s Productive Horizon

Burgundy Diamond Mines Limited (ASX – BDM) has released a comprehensive update to the Life of Mine (LOM) plan for its flagship Ekati Diamond Mine, located in Canada’s Northwest Territories. The plan now extends through to 2040, reflecting new geological data, mining strategies, and economic studies that underpin the company’s operational outlook.

The Misery Main underground mine, a high-value deposit, has seen its mine life extended by 2.5 years to the end of 2027. This extension follows an updated Mineral Resource Estimate (MRE) incorporating 28 new diamond drill holes and extensive microdiamond sampling. While Indicated Resources have slightly decreased due to ongoing mining and refined grade data, Inferred Resources have increased, and the pipe remains open at depth, suggesting further potential beyond current plans.

Fox Underground – A New Chapter with Strong Economics

The Fox Underground project has been re-evaluated with a fresh prefeasibility study (PFS) completed in 2025. The study highlights robust economics, with a post-tax net present value (NPV) at a 9% discount rate ranging from US$272 million in the Ore Reserves Case to US$352 million in an Upside Case that includes additional Inferred Resources. Internal rates of return (IRR) are strong at 30-32%, supporting the planned development start in mid-2026 and a mine life of 14 years.

Key to the improved economics is a shift to the sublevel retreat mining method, successfully applied at Misery, which reduces initial capital expenditure by eliminating the need for underground crushing and conveying infrastructure. The Railveyor system will be used for material haulage, offering operational flexibility and cost savings.

Point Lake Bulk Sample and Mining Deferral

A bulk sample from the Point Lake open pit, processed in 2025, yielded 67,757 carats at an average value of US$52 per carat, which is 27% lower than previous estimates based on historical samples. This valuation, influenced by a finer diamond size distribution, has led Burgundy to defer mining at Point Lake until mid-2026. Meanwhile, pre-stripping is complete and the site is prepared for resumption pending market conditions.

Operational and Financial Outlook

The updated LOM plan incorporates these resource and reserve changes, alongside detailed production profiles and cost forecasts. Plant operations will move to a two-week on/two-week off schedule from August 2025 until Point Lake resumes full production. Capital expenditure over the life of the mine is forecast at US$516 million, with all-in sustaining costs averaging US$131 per carat, though these costs rise in later years as production tapers.

Diamond price forecasts used in the economic models anticipate gradual price growth across all deposits, with Fox Underground diamonds commanding premium prices reflective of their size and quality.

Permitting and Risks

Burgundy has outlined key permitting requirements and timelines for the Fox project, including new Land Use Permits and amendments to existing Water Licences. The permitting process is expected to take 12 to 16 months, with no significant environmental or legal impediments currently identified. However, risks remain around potential delays in permitting, infrastructure procurement, pit dewatering, and diamond grade or valuation shortfalls.

These factors will be critical to monitor as Burgundy advances Fox Underground development and manages the transition from current operations.