Burgundy Diamonds Mines is one step closer to re-opening the Ellendale diamond mines in Western Australia’s Kimberley region.
Burgundy Diamond Mines has made its second payment as part of an option agreement it had signed to secure full ownership of the mine from Gibb River Diamonds in WA. A final payment is due in 2023. Burgundy bought the mine in March 2021 from Gibb River Diamonds for $6.7 million in cash, 16 million Burgundy shares and 1.5 per cent revenue royalty.
The company is readying the mine to resume operations after it had been moth-balled by its previous owners. Burgundy will be exploring the alluvial deposits at the Blina and Ellendale locations and developing the stockpiles and coarse rejects and remnant pit material with plans to be fully operational by the end of this year.
Past production at the Ellendale mine produced 50 percent of the world’s fancy yellow diamonds.
Burgundy believes there is significant potential for the new Ellendale leases to deliver a profitable diamond mining operation, with the intention of becoming Australia’s next diamond producer within the next 24 months. The project ticks many strategic boxes for Burgundy in terms of location, high-end product and cash-flow timeline.
With the Blina Alluvials fully permitted for mining, this will be a priority target for Burgundy, with plans for additional geological assessment followed by targeted bulk sampling and trial mining.
Resource assessment of the other Ellendale prospects and former mining operations is already underway, in addition to the fabrication of a state-of-the-art processing plant expected to be up and running by the year end.
Burgundy is currently operating its Perth facilities at high capacity, cutting and polishing third-party rough diamonds bought in 2021 and is pursuing options to make further purchases over the remainder of 2022.
Burgundy Managing Director Peter Ravenscroft is excited by the retail aspect of the company’s operations.
“We are thrilled to be preparing the launch of our ultra-luxury diamond brand in Paris in July,” he said, “and will soon be announcing the engagement of a great creative agency to manage this process.” French jeweller Bäumer Vendôme will be collaborating with Burgundy on a branded collection using coloured diamonds from Ellendale, along with other gems from third-party retailers.
“Building a new luxury brand and partnering with select jewellery retailers offers a unique concept to the market [which] customers will enjoy a true end-to-end experience while we can deliver the best returns for our partners, shareholders and the communities in which we operate,” added Ravenscroft.
Argyle closure and Russian aggression leaves a gap
The race to kickstart the Kimberley’s diamond industry heated up last year following the closure of Australia’s only operational diamond mine at Argyle. Now, the ongoing invasion of Ukraine by Russia presents another opportunity for Australian diamond miners as Russian gems leave an irresponsible flavour in the mouths of ethically minded consumers.
Another miner in the Kimberley region, Lucapa Diamond Company, recently identified three new prospective targets only 50 kilometres from Ellendale. The exploratory team recovered more than a thousand diamonds from a single drill hole on the site.
Coloured mined diamonds remain in high demand with the prices of high-quality yellow stones increasing as much as 30 percent in recent years.