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Mining|PROJECT|SECURITY|Underground|Environmental
Mining|PROJECT|SECURITY|Underground|Environmental
mining|project|security|underground|environmental

Burgundy renegotiates reclamation surety bonds payment schedule

Ekati diamond mine

Ekati diamond mine

13th March 2024

By: Darren Parker

Creamer Media Senior Contributing Editor Online

     

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ASX-listed Burgundy Diamond Mines (BDM), which operates the Ekati mine, in Canada, has secured an agreement in-principle with Canadian surety providers to extend the cash collateralisation schedule of the remaining obligation relating to the terms and conditions of its reclamation surety bonds over four years, instead of having to make the full payment by the end of June. 

Under the terms of the revised cash collateralisation schedule, BDM would pay quarterly instalments of C$14.5-million, concluding with a final payment of about C$9.7-million in the third quarter of 2027. 

This revised payment schedule is consistent with the existing Ekati life-of-mine (LoM) schedule and is subject to the conclusion of long form documentation with the surety providers. 

Under the terms and conditions of its reclamation surety bonds, BDM is required to post securities with key government agencies in Canada and its Northwest Territories to ensure reclamation is completed across its mining properties. The security is provided in the form of either cash, letters of credit or surety bonds. 

BDM’s agreement with Canadian surety providers ensures that they provide surety bonds to the Northwest Territories government to secure certain environmental obligations in connection with the operation of the Ekati mine. These bond values are reduced by each payment of cash collateral provided by the company. 

As of the end of last year, BDM maintained reclamation deposits of about $48-million, with additional cash collateralisation of surety bonds of about $157-million, which are due in the second quarter of this year. 

“This is a clear win-win for all parties, ensuring future closure obligations are well funded, in line with our devoted focus on [environmental, social and governance] priorities, in addition to providing further funding capacity to invest in growth options today and over the short- to medium-term. 

“We look forward to working with the surety providers to finalise the long form documentation,” BDM CEO and MD Kim Truter noted in a statement to shareholders on March 13.

He added that the agreement supported the development of the new conceptual LoM plan for BDM’s cornerstone Ekati asset.

“Potential conceptual mine life extension options include the extension of Misery underground, moving underground at Sable, developing an underground mine at Fox, processing existing low-grade stockpile at Fox, optimising the Point Lake project and implementing the underwater remote mining project if trials are successful,” he pointed out.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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