Burgundy Diamond Mines reported a loss in the first six months of the year, as the challenging diamond market and inclement weather took a toll on its operations.
The company reported a loss of $29.5 million from its Ekati mine in Canada’s Northwest Territories for the period that ended June 30, compared to a profit of $9.4 million last year, it said last week. The company transitioned production from its Sable open pit to Point Lake during the six months, leading to the mining of lower-grade, lower-value rough. Additionally, poor weather, which made it difficult to reach certain portions of the deposit, affected the value of supply. A $7.8 million write-down on the value of its goods amid low demand also contributed to the deficit.
Unfavorable weather conditions impacted production at the miner’s Misery pit as well, though it saw an improvement in the second quarter.
Meanwhile, revenue was down 44% year on year to $125.2 million, as sales volume decreased 11% to 2.1 million carats due to the recovery of lower-grade ore. The introduction of tariffs on imports to the US also affected sales.
Production slipped 33% to 1.6 million carats as a result of bad weather and the transition to Point Lake. Burgundy’s inventory dropped 58% year on year to $600,000 as of the close of the six months.
In July, after the period ended, low diamond prices caused the company to pause operations at the Point Lake pit and consequently lay off workers.
Image: Rough diamonds from the Ekati mine. (Burgundy Diamond Mines)