Ekati Diamond Mine gets $115M federal loan, avoids bankruptcy

By Sarah St-Pierre 

Ekati’s owner was preparing for bankruptcy if it did not receive the loan, CEO says

Ekati Diamond Mine is getting a $115 million loan from the Canadian government to continue operations at the mine and protect jobs, its owner announced Thursday.

Jeremy King, CEO of Australia-based Burgundy Diamond Mines, which owns Ekati, said his company was working in the background with the government of the Northwest Territories and came close to shutting the mine down “weeks ago.”

“We were in a very bleak, or stark, scenario,” he said. “It was either this line or we were looking at bankruptcy and shutting the mine down,” he said.

King said the loan allows Ekati to keep operating and employ people.

The federal Finance department is providing the loan to Arctic Canadian Diamond Company Ltd., Ekati’s operator. Australia-based Burgundy Diamond Mines is its parent company and Ekati’s owner.

The department would not confirm the exact conditions attached to the loan, but a spokesperson confirmed in an email to CBC that “there are strong conditions attached to this loan, including job guarantees, strong loan repayment provisions, among others.”

Claude Guay, parliamentary secretary to the minister of energy and natural resources, said the federal government decided to intervene because mining is a “vital sector” for the country and the Northwest Territories, particularly for Indigenous communities in the region.

“In the short, medium term, this should definitely alleviate the economic challenges of the mine and provide certainty for the communities around the mine,” he said.

In a press release reacting to the news, territorial employment minister Caitlin Cleveland wrote that the loan is a sign that northern companies and workers “deserve the same level of urgency and support” as southern industries have received in times of crisis.

“Our priority continues to be people,” she wrote. “We will remain in close contact with the company, Indigenous governments, and affected contractors to make sure employees have clear information, access to supports, and stability wherever possible.”

Loan conditions

King said the $115 million will be received in installments, with the first one expected “in days.”

The loan comes through the Large Enterprise Tariff Loan (LETL) facility from the Canada Enterprise Emergency Funding Corporation.

To be eligible for LETL loans, a large Canadian company must fulfill three criteria: have an impact on Canada’s economy due to significant operations or a significant workforce in the country; have at least approximately $150 million in annual Canadian revenue; and require a minimum loan size of $30 million.

Finance confirmed in an email that each LETL loan is unique to the company, their circumstances and broader market conditions, and that exact terms are private to the government and company.

It is standard for LETL loans to be split between two facilities, according to a government factsheet. An unsecured one, not backed by collateral for seven years, is equal to 75 per cent of the loan amount. A secured facility for the remaining 25 per cent is issued for a term that depends on the company’s existing secured debt.

While the loan is a tariff relief mechanism, the diamond market has been struggling long before U.S. tariffs kicked in.

Guay said Ekati has nevertheless been affected by the 35 per cent U.S. tariff on rough diamonds and the separate 25 per cent tariff on polished diamonds, on top of the market’s poor shape before tariffs.

King said tariffs have hit the business “extremely hard.”

“This loan is not a fix-all,” he said. “It still remains a very challenging time for Ekati and Burgundy Diamond Mines.”

He said if there is not a rebound in diamond prices in the next six to 12 months, it will be very challenging and the mine may require further funding, for which he said the company would explore all options.

If market conditions allow, he said the medium to longer term plan would be to go forward with underground exploitation at the Fox deposit, which would have a 12 to 14 year mine life.

“What we’re trying to do is get to a point where this funding bridges us for this difficult period,” King said.

Financial woes

Burgundy Diamond Mines said in September it had applied for federal tariff relief funding and was eligible for up to $150 million.

King said $115 million was the maximum the government was willing to lend after conducting its own assessments.

He said the priority with the loan will be to reimburse outstanding creditors they still have to pay.

After that, the focus will be on pivoting towards highest value products out of Ekati, he said.

Ekati laid off hundreds of staff in 2025.

“The jobs that are there now are retained,” King said. He also said market conditions have not recovered sufficiently to restart operations at Ekati’s Point Lake site.

Earlier this month, CBC reported that the Aurora Group of Companies, which provides heavy trucks and mechanical services to Ekati, claimed it had to lay off 90 workers because of $8 million in missed payments and unclear plans for the future from Burgundy Diamond Mines.

The company also requested to halt public trading of shares on the Australian Securities Exchange (ASX) in July. Its latest request for an extension of the suspension was to halt trading from December 11 to January 8, 2026.

In a letter to the ASX requesting the extension, Burgundy wrote the suspension was necessary “pending an announcement in relation to the completion of a funding package which is critical to the company’s ongoing financial availability.”

King confirmed this was in reference to this loan, and that his current estimate for when Burgundy might resume trading would be in late January.

Guay said he expected a lot of the mine’s ongoing financial issues to get resolved in the short term, but did not specify which. He said the loan will make a “significant difference.”

Buying time for diversification

Guay said the loan will help keep Ekati afloat while economic diversification in the territory gets solidified over the next few years.

“We can prolong the life of this mine so that we can work at a decent pace to create new jobs and diversify our economy and go after other minerals that are rich in the soil of the Northwest Territories,” he said.

He said the federal government is also discussing other programs with Ekati, like job-retraining activities.

Guay said the skills of workers in diamond mining will be transferrable to future projects he expects to come to the territory, like electrification power projects and future critical minerals mines.

He said the federal government expects to announce more major projects in the Northwest Territories in 2026 and beyond.

“There’s a bright future for the mining industry in the Northwest Territories,” he said. “We don’t want to lose those skills and also the economic impact that it’s having on the community.”