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Ekati diamond mine owner Burgundy has again requested an extension on some regulatory commitments because it doesn’t have the money to pay contractors to do the work on time.
Burgundy made a similar request in November last year but then received a $115-million federal loan in December that was designed to keep the mine out of bankruptcy.
According to regulatory filings over the past two weeks, the loan has not solved all of the company’s cashflow issues.
In a letter to the Wek’èezhìi Land and Water Board, Burgundy head of health, safety, environment, communities and training Sheila Chernys said the company was “working diligently to manage these funds responsibly and in accordance with federal expectations.”
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Even so, Chernys wrote, “many of our supporting consultants and contractors are requiring pre-payment before commencing work.”
At the same time, the letter continued, Burgundy is having to expend “significant financial resources” on the annual winter road season through which the NWT’s diamond mines carry out a lot of their resupply.
“As a result, we are experiencing temporary constraints that affect our ability to advance certain reporting deliverables on their current timelines,” Cherny wrote.
Burgundy requested new deadlines for some regulatory submissions “to ensure that all reports are completed to the required standard and with the appropriate technical rigor.”
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For example, Burgundy asked for its deadline to submit a “seepage response framework” for one area of Ekati to be moved from March 31 to August 31 this year.
That framework was originally due on December 31, 2025. The deadline had already been pushed back once.
Similarly, Burgundy asked to have until September 25 for a new dam classification assessment report to be filed. The original deadline for that work was in November last year.
“It is unfortunate that the licensee is in this situation. However, given the financial circumstances, the board has decided to approve the extension requests as submitted by Burgundy,” the regulator responded this week, using wording identical to that found in a similar letter four months ago.
Burgundy did not respond to requests for comment.
The company has said Ekati will be a smaller mine now that it is operating to the terms of a federal loan. Some of the money, which Burgundy said did not constitute a bailout in its view, was intended to go toward creditors in the North and elsewhere.
The NWT is more broadly in a push-and-pull between advocates of a more relaxed regulatory environment and those who say if anything, closer scrutiny is needed.
Multiple companies – and territorial politicians – say the territory’s regulatory regime can be streamlined, or at least altered. The NWT and Ottawa signed a memorandum this week to “improve the clarity, predictability and efficiency” of regulatory processes, though no specifics were provided.
By contrast, supporters of the existing system say it is in place to guard against an Ekati – a large mine with a significant environmental footprint, operated by a financially unstable entity – becoming another Giant Mine, which closed abruptly when its owner went out of business and is now a $4-billion federal liability.
