Burgundy Diamond Mines has told the Australian Stock Exchange it is still waiting for the Canadian federal government to confirm it’ll receive a huge bailout package.
Burgundy, which owns the NWT’s Ekati diamond mine, has been in financial trouble for months. Hundreds of staff have been laid off and the company has failed to make severance payments on time.
Regulatory work has also been delayed because contractors’ invoices remain outstanding.
Earlier this month, Burgundy – which is listed on Australia’s ASX – told the exchange it hoped to hear about a federal bailout by November 20.
However, after that day came and went, the company said in a new statement it is “difficult to predict a timetable” for talks with Ottawa to conclude.
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Burgundy’s bailout is expected to take the form of a large enterprise tariff loan, or LETL.
LETLs were announced in March as a response to US tariffs. (Natural diamond sales globally have been hit both by US tariffs on India – a major polishing centre for diamonds – and the growth of the lab-grown diamond industry.)
In the words of the Canada Enterprise Emergency Funding Corporation, a federally backed entity managing the program, LETLs offer “financing support for large Canadian enterprises affected by actual and potential new tariffs and countermeasures, and which face challenges accessing traditional sources of market financing.”
The minimum size of any loan under the program is $30 million, and the sum can go much higher depending on the circumstances.
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The program’s eligibility criteria state that loan size is determined based on “demonstrated need, the reasonableness of management’s business plan assumptions and the ability to repay.”
Burgundy said this week it is “working toward finalising these matters as soon as practicable and is aiming to do so by the commencement of normal trading on December 11.”
Until then, trading in Burgundy’s shares on the ASX will remain suspended.
