Burgundy Diamond Mines Limited (ASX:BDM) entered into a binding share purchase agreement to acquire 100% stake in Ekati Diamond Mine in Canada from Dominion Diamond Mines ULC for $151 million on March 13, 2023. As per the terms of the transaction, Burgundy Diamond Mines Limited will pay a consideration of $21 million through its ordinary shares and $15 million as deferred payment. Burgundy Diamond Mines Limited will also pay $100 million debt of Dominion Diamond Mines ULC. In addition, Burgundy has agreed to a potential earn-out payment to the vendor of $7.5 million in cash in the first quarter of 2024 if 2023 EBITDA of the Ekati Diamond Mine equals or exceeds $200 million and $7.5 million in cash in the first quarter of 2025 if 2024 EBITDA of the Arctic Companies equals or exceeds $200 million. The target delivered revenue of $494 million and adjusted EBITDA of $200 million in 2022. To fund the proposed acquisition, Burgundy will conduct an equity raising via a conditional placement to raise up to $150 million.

On April 18, 2023, the share purchase agreement was amended. Through the amendment, Burgundy and the vendor have agreed that the debt repayment is to be made via a combination of cash and share, instead of cash only. In exchange for forgiveness of ~$23 million of debt owed by the mine, Burgundy agrees to issue existing lenders with $23 million of shares in Burgundy, provided that the number of shares that will be issued to the existing lenders, when taken together with the stock consideration, will not be more than 19.9% in voting power in Burgundy. Rest of the consideration remains unchanged. Davies Ward Phillips & Vineberg LLP acted as legal advisor to Burgundy Diamond Mines Limited (ASX:BDM).

Burgundy Diamond Mines Limited (ASX:BDM) acquired Ekati Diamond Mine in Canada from Dominion Diamond Mines ULC on July 4, 2023.