Burgundy Diamond Mines plans to return the Ellendale mine to production as early as next year after securing funding for the resumption of operations.
The mine is located in the Kimberley region of Western Australia and has produced more than half of the world’s fancy yellow diamonds.
The company will return the mine to production thanks to commitments from investors to raise $49.7 million in new capital.
Burgundy managing director and chief executive officer Peter Ravenscroft said the funding package was tailored to build on the ramp up of the company’s diamond strategy.
“Since commencing our diamond strategy we have methodically and significantly expanded our portfolio across favourable mining jurisdictions, and are now pursuing rapid cashflow through early production and significant vertical integration. This positions us well to achieve our goal to become the world’s leading midcap diamond company,” Ravenscroft said.
“Recent asset acquisitions have given the company a pathway to near-term revenue. In view of this, Burgundy has taken the opportunity to broaden its sources of funding beyond just equity, in order to minimise dilution whilst maintaining a robust balance sheet.
“We are now fully funded to successfully execute several key initiatives within our diamond strategy, predominantly advancing the Ellendale project towards production with lucrative downstream potential, finalising the first stage of the bulk sampling program at Naujaat, and continuing the promising exploration program in Botswana.”
Ravenscroft said the funding package gives Burgundy significant financial flexibility to advance its downstream initiatives and continue to consolidate the Fancy-Colour diamond business.
“This is a transformative stage in Burgundy’s unique growth strategy, bringing an innovative and cutting-edge approach to developing an end-to-end diamond business in a high-value niche sector of the market,” Ravenscroft said.
“We are excited to now be in a position to pursue the substantial value opportunities that we have identified.”
In March, Burgundy bought the mine from Gibb River Diamonds for $6.7 million in cash, 16 million Burgundy shares and 1.5 per cent revenue royalty.
Burgundy managing director Peter Ravenscroft said the Ellendale project was important for the company’s future growth.