Burgundy Diamond Mines (BDM) Q2 2024 TU earnings summary

Executive summary

• Annual production increased from 4.1 million to 5.1 million carats, with operational reliability and net debt reduced from $157 million to $63 million as of June 2024.

• Acquisition of Ekati mine was a countercyclical move, targeting undervalued assets with strong fundamentals and long mine life potential.

• Management is focused on mine life extension, operational improvements, and disciplined capital allocation to position for market recovery.

• Board strengthened with strategic investor Anshul Gandhi, enhancing midstream diamond expertise.

• Sable underground drilling 45% complete; Point Lake open pit on track for early 2025 production.

Financial highlights

• Q2 2024 sales totaled $103 million, with revenue per carat at $103, down 5% year-over-year; carats sold dropped 23% compared to Q2 2023.

• Net debt improved to $63 million, with cash at quarter-end just under $57 million; net cash including diamond inventories at $36.9 million as of June 30, 2024.

• One-off tax payment of $25 million and $21 million in capital expenditures, mainly for Point Lake development, impacted cash flow.

• EBITDA for Q2 2024 was $26 million; 2023 EBITDA was $133 million.

• Diamond inventory valued at $100 million as of June 2024.

Outlook and guidance

• 2024 revenue guidance remains $460 million–$500 million, with operational and sales metrics on track.

• Carats recovered and sold expected between 4.9 million and 5.3 million for the year.

• Second half expected to outperform due to seasonality and operational improvements post-maintenance.

• Ongoing mine life extension projects and new production from Point Lake expected to support future growth.

• Management expects diamond prices to improve as supply-demand tightens and with renewed industry marketing.