Diamond finds could extend NWT’s Misery mine ‘well past 2026,’ Burgundy says

Results from summer drilling at Burgundy Diamond’s (ASX: BDM) Ekati mine in the Northwest Territories could help extend production at the underground Misery mine much longer than expected, the company says.

Out of 710 metres drilled across six holes in July, the crew found a fancy yellow diamond about 25 metres below the last planned mine level. Drilling that targeted Misery’s main ore body confirmed the company’s belief that there’s a larger body at depth.

“We are pleased to announce the results from our current drilling program are indicating that the Misery pipe, which is a very high value ore source requiring almost zero development capital, is very likely to stay in production well past the original 2026 date,” Burgundy CEO Kim Truter said in a release on Monday.

The possible extension of Misery’s life comes as the territory’s three diamond mines face closures in the coming years. Rio Tinto’s (NYSE: RIO; LSE: RIO; ASX: RIO) Diavik mine is due to close in 2026, and De Beers’ Gahcho Kué mine is slated to run until 2028. While Ekati’s Sable open pit is expected to wind down this year, its Point Lake open pit could produce until 2029, according to company projections.

Burgundy acquired Ekati when it purchased its former owner, Arctic Canadian Diamond, in March 2023 for US$136 million.

The mines, located hundreds of kilometres northeast of the capital Yellowknife are accessible only by winter road and airstrip.

Resource update in months

Drilling and bulk sampling of the main ore body’s prospective Southwest extension at Ekati is expected to start in the fourth quarter. Updated resource and reserves for Misery and the Southwest extension are expected in the next six months, with an official extended mine plan scheduled for release in the next year’s first quarter.

Ekati’s current mine plan is based on ore reserves of 15.8 million carats, Burgundy said. The company also developed a conceptual mine plan that could extend Ekati’s life towards 2040. It involves extending Misery, moving underground at Sable, developing underground and processing stockpiles at the Fox deposit, and potentially pursuing underwater remote mining at Point Lake.

Burgundy shares were down 7.6% to A12¢ apiece on Tuesday in Sydney, valuing the company at A$170.5 million ($154.3 million). Its shares traded in a 52-week range of 12¢ to 24¢.