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Annual Report | Year Ended 31 December 2024
Annual Report
For the year ended 31 December 2024
Contents
Corporate Directory ..................................................................................................................................................................... 2
Managing Directors’ Report ....................................................................................................................................................... 3
Directors' Report .......................................................................................................................................................................... 5
Lead Auditors Independent declaration ................................................................................................................................... 24
Financial Statements ................................................................................................................................................................... 25
Consolidated Statement of Loss and Other Comprehensive Loss ............................................................................. 26
Consolidated Statement of Financial Position .............................................................................................................. 27
Consolidated Statement of Changes in Equity .............................................................................................................. 28
Consolidated Statement of Cash Flows .......................................................................................................................... 29
Notes to the Consolidated Financial Statements .................................................................................................................... 30
Consolidated entity disclosure statement ............................................................................................................................... 76
Directors’ Declaration .................................................................................................................................................................. 77
Independent Auditor’s Report ................................................................................................................................................... 78
Corporate Governance Statement ............................................................................................................................................ 85
ASX Additional Information ........................................................................................................................................................ 86
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Annual Report | Year Ended 31 December 2024
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Corporate Directory
Board of Directors
Michael O’Keeffe
Chair
Kim Truter
Chief Executive Officer and Managing Director
Marc Dorion
Non-Executive Director
Stephen Dennis
Non-Executive Director (Appointed 30 January 2024, retired 14 January 2025)
Trey Jackson
Non-Executive Director (Appointed 30 January 2024)
Jeremy King
Non-Executive Director (Appointed 9 April 2024)
Anshul Gandhi
Non-Executive Director (Appointed 1 August 2024)
Company Secretary
Brad Baylis
Registered Office
Level 25
South32 Tower
108 St Georges Terrace
Perth WA 6000
Telephone:
08 6313 3945
Website:
www.burgundydiamonds.com
Email:
info@burgundydiamonds.com
Stock Exchange Listing
Listed on the Australian Securities Exchange (ASX Code: BDM)
Auditors
KPMG Australia
235 St Georges Terrace
Perth WA 6000
Share Registry
Automic Share Registry
Level 5, 191 St Georges Terrace
Perth WA 6000
Telephone: 1300 288 664
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Annual Report | Year Ended 31 December 2024
3
Managing Directors' Report
On behalf of the Board of Directors, I am pleased to present the Company’s Annual Report for the financial year
ended 31 December 2024 ("FY2024").
Burgundy cemented its position as the largest G7 producer of natural diamonds, supplying around 4% of global
rough diamonds. During the year Burgundy achieved the milestone of 100 million carats produced and sold from
the Ekati asset over the course of its 26-year history. This is a remarkable achievement and a testament to the
quality of the asset, the people, the strong resource base, a replicable operating model, and an abundance of
kimberlite pipes.
The year was overshadowed by depressed diamond prices due to several factors including a sluggish Chinese
economy, the ongoing conflict in Ukraine, over supply from the two largest producers and lower than normal
diamond jewellery retail sales. All these factors resulted in a buildup of inventory in the mid-stream and a
corresponding drop in demand for rough diamonds. Aggregate global diamond prices dropped approximately 25%
year over year, yet Burgundy saw its revenue decline by only 6%, a testament to the quality of Ekati diamonds and
the benefits of operating in the Canadian jurisdiction. This also underscores how the Ekati product generally
outperforms the market, making the asset more resilient to market headwinds.
A strong focus was placed on strengthening the balance sheet for the business. Key highlights included:
•
The renegotiation of the closure provisioning terms (referred to as the Surety Agreement) such that the
formula for calculating the annual cash contributions is now and in the future aligned with the published
Life of Mine Plan, and the introduction of a sizeable minimum cash balance of $30.0 million to ensure
ongoing balance sheet strength. This new agreement reflects the ongoing support from the Government
of the Northwest Territories and the strong relationship with our surety providers.
•
The establishment of a new environmental trust account, closely related to the Surety Agreement, that
has been jointly set up to include all historical and ongoing environmental and closure related cash
collateralization payments. A key benefit of this new trust account is the favourable accounting
treatment of tax liabilities with a significant reduction anticipated during 2025 and beyond.
•
As part of our broader debt reduction focus, the historical convertible note debt and associated 6%
coupon rate were paid out of operating cashflow.
As a result of these initiatives, total debt reduction since June 2023 is circa $123.0 million.
A key focus of the team has been on extending the mine life of the Ekati asset by leveraging off the established
fixed infrastructure base and the abundance of kimberlite pipes on the property. The development strategy that
was adopted focuses on kimberlite pipes that exists within the reserve or near the reserve base, that have been
previously mined as open pit operations and lend themselves to underground mining. This approach dramatically
reduces the permitting needed, capital burden and development lead times. The mining method that is currently
in use at the Misery underground mine, will likely be adopted at the planned underground projects for Sable and
Fox pits. These three underground mines, coupled with ongoing surface production from the newly established
Point Lake open pit, should see mine life extended all the way into mid-2030. Further potential for development
still exists with other kimberlite pipes such as Jay pipe in the future. These mine plans will be officially released to
the market in 2025.
One of the highlights in 2024 was the transition from Sable open pit to the new Point Lake open pit, located nearly
50km away in the opposite direction. By the end of the year the necessary overburden movement had been
completed to expose the first kimberlite ore, while Sable operations had wound down significantly. During early
2025, the new Point Lake open pit will enter full production, which will complement Misery underground
production, located only a few kilometres away. These two mining sources will ensure that the process plant runs
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Annual Report | Year Ended 31 December 2024
4
at full capacity. The close proximity of Point Lake to Misery enables significant operational advantages with the bulk
of the workforce located at Misery camp, thus reducing travel time and allowing ore long haul back to the process
plant to occur in a single direction. This improves our overall operational efficiency and lowers our operating costs.
As we look ahead into 2025, we are excited about the rough diamond supply and demand equation tightening up,
which will inevitably lead to improved rough diamond price realization. There will likely be more stability in the
market as the major producers cut their supply, consumers return to normal spending levels, and sentiment
improves. Burgundy is well positioned to take advantage of the market swing with strong production forecast for
the year, a strong balance sheet, very low debt, and a long pipeline of supply for many years to come.
Kim Truter
Chief Executive Officer and Managing Director
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DIRECTORS’ REPORT
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DIRECTOR’S REPORT | 6
Directors’ Report
The Directors of Burgundy Diamond Mines Limited (“BDM” or “the Company”) present their report, together with
the financial statements of the consolidated entity consisting of Burgundy Diamond Mines Limited and its controlled
entities for the financial year ended 31 December 2024 (“FY2024”).
Directors
The names and particulars of the Company’s directors in office during the financial year and at the date of this
report are as follows. Directors held office for this entire period unless otherwise stated.
Michael O’Keeffe (Chair, appointed 15 June 2017)
Mr. O’Keeffe was the Managing Director of Glencore Australia Limited from 1995-2004 and was Executive Chair of
Riversdale Mining Limited prior to that company being acquired by Rio Tinto PLC in 2011. Mr. O’Keeffe is currently
the Executive Chair and former Chief Executive Officer of Champion Iron Limited which operates an iron ore project
in Canada. Mr. O’Keeffe is a significant shareholder holding 4.78% of the ordinary share capital of the Company.
Current and former directorships of listed entities in the last three years:
Executive Chair of Champion Iron Limited (current)
Special responsibilities:
Chair of the Board.
Interest in securities:
67,903,535 ordinary shares
Kim Truter (Chief Executive Officer & Managing Director, appointed 17 November 2022 and previously
non-executive director, appointed 22 September 2020)
Mr. Truter was most recently the Chief Executive Officer of De Beers Canada from 2015 to 2019. During his tenure
he led the successful completion and ramp-up to full production of the $1.0 billion Gahcho Kué diamond project in
Canada, as well as the value-adding acquisition of the former Peregrine Diamonds assets. He was also a member of
the De Beers Group executive team, driving global business performance across operations, sales, and marketing.
Previously, Mr. Truter served as Chief Operating Officer of Rio Tinto Diamonds, managing their global portfolio in
Australia, Canada and Zimbabwe. He also served as Managing Director of Argyle Diamond Mines Pty Limited in
Australia and as the President and Chief Operating Officer of Diavik Diamond Mines Inc in Canada.
Mr. Truter brings over 30 years of mining experience in both surface and underground operations and large-scale
project development across multiple geographies. He has substantial diamond experience, providing executive
global leadership in Canada, Australia and Africa; often in complex, remote and challenging operating
environments. He has worked extensively with communities and governments to ensure that local benefits are
sustainably established. His proven leadership capabilities include a very strong dedication to safety, productivity
and financial performance improvement.
Current and former directorships of listed entities in the last three years:
None.
Special responsibilities:
None.
Interest in securities:
527,000 ordinary shares
19,337,775 unlisted options
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DIRECTOR’S REPORT | 7
Marc Dorion (Non-Executive Director, appointed 5 July 2020)
Mr. Dorion is a counsel in the Business Law Group of prominent Canadian law firm McCarthy Tétrault, based in
Montreal, where he supervises the natural resources group in Québec. He received his LLL from the Université de
Sherbrooke, Quebec, Canada then did post graduate studies in corporate taxation at Osgoode Hall Law School, York
University. His practice focuses on development, financing, construction and operation of major projects in the
natural resources, energy, infrastructure and industrial sectors. He received the titles of Advocate Emeritus from
the Quebec Bar and also of King’s Counsel.
Current and former directorships of listed entities in the last three years:
None.
Special responsibilities:
Chair of the Human Resources and Compensation Committee and member of the Audit and Risk Committee.
Interest in securities:
12,541,667 ordinary shares
Stephen Dennis (Non-Executive Director, appointed 30 January 2024, retired 14 January 2025)
Mr. Dennis has experience in the resource industry spanning over 35 years during which he held various joint
venture roles and senior management positions in Australia and internationally. He has been involved in all aspects
of the mining and resources business throughout his career, including the financing and development of major mine
projects with strong track record of achieving positive results. He has held senior operational and commercial
positions in MIM Holdings Limited, where he spent four years based at Mount Isa Mines operations, CBH Resources
Limited, Brambles Australia Limited and Minara Resources Limited.
Current and former directorships of listed entities in the last three years:
Non-Executive Chair of Rox Resources Limited (current)
Non-Executive Chair of Marvel Gold Limited (current)
Non-Executive Director of Evolution Energy Minerals Limited (current)
Special responsibilities:
Former Chair of the Audit and Risk Committee and member of the Human Resources and Compensation
Committee.
Interest in securities at date of resignation:
2,100,000 ordinary shares
Trey Jackson (Non-Executive Director, appointed 30 January 2024)
Mr. Jackson has more than 25 years of experience in the metals & mining and energy sectors as a private equity
investor and executive in the US, Canada, Europe, and Australia, including numerous board appointments to private
and public companies.
Mr. Jackson was an executive with The Cline Group from 2011 to 2019 as part of the team that built Foresight
Energy from a greenfield development into a public company. While at The Cline Group, Mr. Jackson was the Chief
Commercial Officer during the period the company developed the Coalspur and Donkin mines in Canada. He also
led the acquisition, expansion, and divestment of Cline’s subsidiary Convent Marine Terminals and served as
company president during his tenure there.
Currently, Mr. Jackson serves as a co-founder of PBE Mining, a mining technology company with global patents and
operations in Australia, and Tetra Resources, an Australian mining operator. With his experience serving on boards,
including a prior Director role for a NYSE listed company, he brings a depth of experience and knowledge.
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DIRECTOR’S REPORT | 8
Current and former directorships of listed entities in the last three years:
None.
Special responsibilities:
Member of the Audit and Risk committee and member of Human Resources and Compensation Committee.
Interest in securities:
916,833 deferred share units were granted during 2024 which represent Mr. Jackson's annual director retainer and
contribute towards Mr. Jackson's share ownership obligation.
Jeremy King (Non-Executive Director, appointed 9 April 2024)
Mr. King has over 25 years experience in domestic and international legal, finance and corporate matters, including
cross-border private equity investments, leveraged buy-out acquisitions, and acting for banks, financial institutions
and corporate issuers in respect of debt and equity capital raisings.
In recent years, Mr. King’s focus has been on the natural resources industry where he has gained significant
experience both within Australia and internationally. Mr. King is the founding director of a boutique advisory service
in Perth, Australia that supports companies with corporate transactions and compliance issues associated with ASX-
listed companies. In addition to serving on the Burgundy Diamond Mines board, Mr. King serves on boards of four
additional companies listed on the Australia Stock Exchange (ASX), and regularly advises ASX listed companies on a
range of corporate matters.
Current and former directorships of listed entities in the last three years:
Non-Executive Director of Red Mountain Mining Limited (current)
Non-Executive Director of DTI Group Limited (current)
Non-Executive Director of Smart Parking Limited (current)
Non-Executive Director of Transcendence Technologies Limited (current)
Non-Executive Director of Tando Resources Limited (current)
Special responsibilities:
Chair of the Audit and Risk Committee.
Interest in securities:
4,646,215 ordinary shares
Anshul Gandhi (Non-Executive Director, appointed 1 August 2024)
Mr. Gandhi has extensive experience in the diamond industry. Raised in Antwerp, Belgium, Mr. Gandhi has been in
and around the diamond industry from a young age. He began his formal journey by earning a Graduate Gemologist
degree from the prestigious Gemological Institute of America in New York.
Mr. Gandhi joined the Choron Group in 2010 to helm the rough diamond division. Over the years, Mr. Gandhi was
instrumental in launching the division responsible for manufacturing exceptional rough diamonds as well as
managing global polished diamond operations. In his role as CEO since 2023, Mr. Gandhi oversees major strategic
business decisions and leads key corporate functions.
Current and former directorships of listed entities in the last three years:
None.
Special responsibilities:
None.
Interest in securities:
120,000,000 ordinary shares
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Chief Financial Officer & Company Secretary
Brad Baylis (appointed on 26 April 2023)
Mr. Baylis has more than 25 years of experience in the energy and mining sectors in leadership roles spanning
commercial, corporate, and operational finance. Mr. Baylis was most recently the Chief Financial Officer for Air
Tindi, a regional airline based in Yellowknife in the Northwest Territories of Canada. Previous roles include the Chief
Financial Officer of De Beers Canada and the Chief Financial Officer of Riverdale Resources.
Interest in securities:
4,668,888 unlisted options
Principal Activities
The principal activities during the financial year were the operation of the 100% owned world class Ekati diamond
mine located in Canada’s Northwest Territories, sale of rough diamonds through auctions held in Antwerp Belgium
and sale of polished diamonds manufactured in Burgundy’s cutting and polishing facility in Perth Australia.
Review of Operations
For the purpose of providing comparable information for the period 1 January 2023 to 31 December 2023, the
Group has presented tonnes mined, ore processed, carats recovered, carat inventory on hand, carats sold and total
proceeds by ACDC and ACDM NV for the period prior to acquisition by Burgundy.
In 2024, a total of 11.8 million tonnes were mined, down 44% from 2023 (2023: 21.1 million tonnes) due to lower
waste and lower ore mined during the year resulting from lower waste movement requirements for Sable Pit in
2024 as Sable operations draw to a close and delays in mining activity at Point Lake.
A total of 4.1 million tonnes of ore was processed through the process plant during the year down 2% from 2023
(2023: 4.2 million tonnes).
During the year, 4.6 million carats were recovered, down 10% from 2023 (2023: 5.1 million carats). Carats recovered
were lower than previous period due to lower ore processed during the year and decrease in overall grade. The
Group ended the year with 1.1 million carats in ending inventory down 15% versus ending inventory in 2023 (1.3
million carats). The ending inventory represents the normal work in progress and finished goods inventory based
on the current sales cycle.
Capturing incremental margins along the diamond value chain by leveraging collaborative sales agreements with
international jewellers remains a key focus.
Further, the Group continues actively assessing merger and acquisition ("M&A") opportunities to build out
a balanced portfolio of diamond projects in Tier 1 jurisdictions.
Sales and Marketing
During the year, the Group held eleven rough diamonds auctions in our Antwerp office. During the year, 4.9
million carats were sold, up 4% from 2023 (2023: 4.7 million carats) for total proceeds of $442.1 million down
6% from 2023 (2023: $471.3 million). Despite the extremely challenging rough diamond market the Group was
able to sell all high-value available product as Ekati Canadian natural diamonds provide customers with
sustainably produced high-value diamonds with low fluorescence, optimal assortment, and unique fancy colours.
During the year, the Group's cutting and polishing facilities in Perth continued to operate at full capacity, refining
third-party rough diamonds purchased during the 2023 and 2024. The Group is developing its channel strategy
and anticipates further sales collaborations in 2025.
Corporate
Issue of Unlisted Options
On 1 April 2024, the Company issued 12,360,994 unlisted options to senior executives including the Chief Executive
Officer and Chief Financial Officer with exercise price of A$0.21.
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DIRECTOR’S REPORT | 10
Results of Operations
The net loss of the Group for the year ended 31 December 2024 was $97.3 million (period ended 31 December
2023: net loss of $0.7 million). The net loss incurred during 31 December 2024 reflects a full twelve months of
results of the Ekati Diamond Mine, whereas the period ended 31 December 2023 only reflected results of Ekati
Diamond Mine for six months from 1 July 2023 till 31 December 2023 (post acquisition period). As at 31 December
2024, the market capitalisation of the Group decline significantly by $110.2 million which represents a 58% decline
compared to the period ended 31 December 2023. Furthermore, price per carat realised in the Rough Diamond
CGU decreased by 10% compared to period ended 31 December 2023. As a result of these factors
management performed an impairment assessment of the Rough Diamond CGU which resulted in an impairment
of the Ekati Diamond Mine property, plant and equipment of $151.6 million for the year. The significant increase
in net loss in 2024 is primarily due to the impairment charge recorded on Ekati property, plant and equipment.
Financial performance for the previous five years is as follows:
(US$ '000)
31 December
2024
31 December
2023
30 June
2023 (i)
30 June
2022 (i)
30 June
2021 (i)
(97,257)
(676)
(17,802)
(13,601)
(9,088)
(6.84)
(0.05)
(5.09)
(4.09)
(3.61)
Net Loss after tax
Loss per share (cents per share)
(i) Prior year comparatives have been translated from Australian Dollar to US Dollar at the closing spot rate as at end of the
respective year-end.
Financial Position
The statement of cash flows shows a decrease in cash and cash equivalents for the year ended 31 December 2024
of $69.3 million (period ended 31 December 2023: net decrease of $30.9 million). During the year, the Group
generated $87.1 million from operating activities primarily from sales of rough diamonds and working capital
related timing adjustments. Cash used in financing activities of $33.3 million related to $23.2 million in repayment
of convertible notes and $10.0 million of principal lease repayments. Cash used in investing activities of $122.3
million mainly comprised of $98.5 million on purchase of property, plant and equipment and net contributions for
cash collateralisation of reclamation surety bonds of $24.5 million. As at 31 December 2024, the Group had funds
of $25.1 million (31 December 2023: $94.4 million).
Material risks and uncertainties
The Board is responsible for overseeing the processes used by management to assess and manage risk, including
the identification by management of the principal risks of the business and the implementation of appropriate
systems to address such risks.
The Group is subject to a number of risks and uncertainties as a result of our operations, each of which could have
a material adverse effect on our business prospects or financial condition. These factors include, among other
things:
Operational risks
•
the uncertain nature of mining activities, including risks associated with underground construction and
mining operations.
•
risks associated with the estimates related to the capital expenditures required to sustain and grow mining
operations.
•
due to the remoteness of our mining operations, we are forced to rely heavily on a seasonal winter road or
air transport for the supply of goods and services. Both forms of transport are very susceptible to disruptions
due to adverse weather conditions, resulting in unavoidable delays in planned programs and/or cost
overruns.
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Annual Report | Year Ended 31 December 2024
DIRECTOR’S REPORT | 11
•
variations in mineral resource and mineral reserve estimates or expected recovery rates.
•
failure of plant, equipment or processes to operate as anticipated.
•
mining is subject to potential risks and liabilities associated with pollution of the environment and
the disposal of waste products occurring as a result of mining operations. To the extent that the Group's
operations are subject to uninsured environmental liabilities, the payment of such liabilities could have a
material adverse effect on the Group.
•
risks associated with potential environmental liabilities, our estimates related to reclamation plans and costs,
and any increase to the amount or change in the form of security required to be posted in connection with
such plans and costs.
•
modifications to mine plans and capital development schedule as planned projects are optimized.
•
the risk of increased demand for synthetic diamonds or the presence of undisclosed synthetic diamonds in
jewellery, negatively impacting demand for diamond jewellery.
•
disruption, damage or failure of information technology systems from a variety of sources, including, but not
limited to, cable cuts; damage to physical plants; natural disasters; terrorism; fire; power loss; hacking, cyber-
attacks and other information security breaches; non-compliance by third party service providers; computer
viruses; vandalism and theft.
Financial and diamond pricing risks
•
the risk that future diamond price assumptions may prove to be incorrect.
•
risks resulting from macro-economic uncertainty in financial markets and other world economic conditions.
•
the risk of fluctuations in diamond prices and changes to consumer demand in the principal markets of the
US, China and India.
•
cash flow and liquidity risks including our ability to generate sufficient cash to service our debt obligations,
working capital requirements and financial commitments.
•
the risk of fluctuations in the Australian, Canadian and US dollar exchange rate.
•
risks related to our ability to meet our employee benefit obligations.
Laws and regulations
•
modifications to existing practices so as to comply with any future permit conditions that may be imposed
by regulators.
•
risks associated with regulatory requirements and the ability to obtain all necessary regulatory approvals and
permits.
•
delays in obtaining approvals and lease renewals.
•
labour disputes and disruptions related to the collective bargaining agreement at the Ekati Diamond Mine.
As part of the Group's risk oversight practices, we have:
•
An Audit and Risk Committee comprised of members of the Board of Directors of the Company, which,
pursuant to its charter, has a mandate to assist the board in fulfilling its financial reporting and risk
oversight responsibilities.
•
Key executives of the Group who are tasked with overseeing the day-to-day management of the primary
business of the Company, including the implementation of appropriate systems to monitor, control, report
on and mitigate principal risks.
•
A Burgundy Diamond Mines' Code of Conduct which is applicable to its subsidiaries and sets out the standards
which guide the conduct of our business and behaviour of all employees, suppliers, contractors, agents,
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DIRECTOR’S REPORT | 12
advisors and other representatives when dealing or acting on behalf of the Company and its subsidiaries. The
Code of Conduct is a risk management tool that exemplifies our commitment to maintaining high standards
of conduct.
•
Whistleblower Policy, which together ensures a formal, simple and anonymous channel to report concerns
regarding fraud or significant ethical issues related to the Group.
Dividends
No dividends have been paid or declared by the Company since the end of the previous financial period. No dividend
will be paid in respect of the current financial period.
Significant Changes in the State of Affairs
There were no other significant changes in the state of affairs of the Group other than those described within the
operating and corporate activities review.
Matters Subsequent to The Reporting Period
(i) Fuel offtake agreement
During February 2025, ACDC entered into a fuel offtake agreement for 2025 with a subsidiary of Macquarie Bank
Ltd. ("Macquarie"). Through this new agreement, Macquarie owns the diesel in the Ekati fuel tanks and supplies
diesel to Ekati as it is required. This agreement provides a mechanism that enables Burgundy to better manage the
levels of working capital and reduce seasonal volatility of its operating cash outflows. In February, the Group
received $39.2 million from Macquarie and will make monthly payment to Macquarie based on fuel consumption.
Likely Developments and Expected Results
The strategic objectives of the Group are to create shareholder value through the operation of an end-to-end
diamond company, with activities including exploration, project development, mining, cutting, and polishing and
retail jewellery sales. Expected results have not been included in this report because disclosure of the information
would be likely to result in unreasonable prejudice to the Group.
Directors’ Meetings
The number of Directors’ meetings held during the financial period and to the date of this report and the number
of meetings attended by each Director during the time the Director held office are:
Board
Audit and Risk
Committee
Human Resources and
Compensation Committee
Held(i)
Attended(ii)
Held(i)
Attended(ii)
Held(i)
Attended(ii)
Kim Truter
4
4
2
2
2
1
Michael O’Keeffe
4
4
—
—
2
—
Marc Dorion
4
4
2
2
2
2
Stephen Dennis
4
3
2
2
2
2
Trey Jackson
4
4
2
2
2
2
Jeremy King
4
4
—
—
2
1
Anshul Gandhi
3
3
—
—
2
—
(i) Number of meetings held during the time the director held office or was a member of the committee during the year.
(ii) Number of meetings attended.
In addition to the scheduled Board meetings, Directors regularly communicate by telephone, email or other
electronic means, and where necessary, circular resolutions are executed to effect decisions.
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Rounding
The Group is of a kind referred to in ASIC Corporations Instrument 2016/191 and, in accordance with that Class
Instrument, amounts in the directors’ report and financial report have been rounded to the nearest thousand
dollars, unless otherwise stated.
Remuneration Report (Audited)
This remuneration report for the year ended 31 December 2024 outlines the remuneration arrangements of the
Company in accordance with the requirements of the Corporations Act 2001 (“the Act”) and its regulations. All
amounts are in United States Dollars unless otherwise noted. This information has been audited as required by
section 308(3C) of the Corporations Act 2001.
The Remuneration Report details the remuneration arrangements for Key Management Personnel (“KMP”) who
are defined as those persons having authority and responsibility for planning, directing and controlling the major
activities of the Company, directly or indirectly, including any Director (whether executive or otherwise) of the
Company.
The KMP of the Company for the year ended 31 December 2024 are as follows:
Role
Appointment
Resigned
Michael O’Keeffe
Chair
15 June 2017
N/a
Kim Truter
Chief Executive Officer and Managing Director
17 November 2022
N/a
Marc Dorion
Non-Executive Director
5 July 2020
N/a
Brad Baylis
Chief Financial Officer and Company Secretary
26 April 2023
N/a
Stephen Dennis
Non-Executive Director
30 January 2024 14 January 2025
Trey Jackson
Non-Executive Director
30 January 2024
N/a
Jeremy King
Non-Executive Director
9 April 2024
N/a
Anshul Gandhi
Non-Executive Director
1 August 2024
N/a
Voting and comments made at the Company's 2024 Annual General Meeting (“AGM”)
At the 21 May 2024 AGM, 95.36% of the votes received supported the adoption of the remuneration report for the
period ended 31 December 2023. The Company did not receive any specific feedback at the AGM regarding its
remuneration practices.
Remuneration Philosophy
Members of key management have authority and responsibility for planning, directing and controlling the activities
of the Company. During the financial period, KMP of the Company comprises the Board of Directors, Chief Executive
Officer and Chief Financial Officer.
The Company’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s
duties and responsibilities and that remuneration is competitive in attracting, retaining, and motivating people of
the highest quality.
The Company did not utilise services of any remuneration consultant during the year ended 31 December 2024.
Remuneration Governance, Structure and Approvals
The remuneration of Directors is currently set by the Board, however, in the first quarter of 2024, the Human
Resources and Compensation Committee was established to carry on the remuneration governance and approval
function. The nature and amount of remuneration is collectively considered by the Board with reference to relevant
employment conditions and fees commensurate to a company of similar size and level of activity, with the overall
objective of ensuring maximum stakeholder benefit from the retention of high-performing Directors.
The Board and the subsequent Human Resources and Compensation Committee established in the first quarter of
2024 is primarily responsible for:
•
The over-arching executive remuneration framework;
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Annual Report | Year Ended 31 December 2024
DIRECTOR’S REPORT | 14
•
Operation of the incentive plans which apply to executive directors and senior executives, including key
performance indicators and performance hurdles;
•
Remuneration levels of executives; and
•
Non-Executive Director fees.
Their objective is to ensure that remuneration policies and structures are fairly competitive and aligned with the
long-term interests of the Company.
Non-Executive Remuneration Structure
The remuneration of Non-Executive Directors consists of Directors’ fees (plus statutory superannuation), payable
in arrears. The current maximum total aggregate fixed sum per annum that may be paid to Non-Executive Directors
in accordance with the Company’s Constitution is CDN$1,000,000 which may be varied by ordinary resolution of
the Shareholders in a General Meeting.
Remuneration of Non-Executive Directors is based on fees approved by the Board of Directors and is set at levels
to reflect market conditions and encourage the continued services of the Directors. In accordance with the
Company’s Constitution, the Directors may at any time, subject to the Listing Rules, adopt any scheme or plan which
they consider to be in the interests of the Company, and they may from time to time vary this scheme or plan.
Remuneration may also include an invitation to receive retainer compensation in the form of Deferred Share Units
per the terms of the program.
Executive Remuneration Structure
The nature and amount of remuneration of executives are assessed on a periodic basis with the overall objective
of ensuring maximum stakeholder benefit from the retention of high-performance individuals.
The main objectives sought when reviewing executive remuneration is that the Company has:
•
Coherent remuneration policies and practices to attract and retain Executives;
•
Executives who will create value for shareholders;
•
Competitive remuneration offered benchmarked against the external market; and
•
Fair and responsible rewards to Executives having regard to the performance of the Company, the
performance of the Executives and the general pay environment.
Relationship between Remuneration and Company Performance
The remuneration framework for KMP comprises fixed remuneration and at-risk components comprising short-
term and long-term variable incentives that are determined by individual and Company performance.
Fixed Remuneration
Fixed remuneration consists of fixed contractual salary or fees, employer contributions to pension funds and other
employee benefits.
The fixed remuneration for each senior executive is influenced by the nature and responsibilities of each role and
the knowledge, skills and experience required for each position. Fixed remuneration provides a base level of
remuneration which is market competitive and comprises a base salary and regulatory and non-regulatory pension.
It is structured as a total employment cost package.
KMP are offered a competitive base salary that comprises the fixed component of pay and rewards. External
remuneration consultants may provide analysis and advice to ensure base pay is set to reflect the market for a
comparable role. Base salary is reviewed annually to ensure the executives’ pay is competitive with the market. The
remuneration of KMP is also reviewed on promotion. There is no guaranteed pay increase included in any KMP’s
contract.
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Annual Report | Year Ended 31 December 2024
DIRECTOR’S REPORT | 15
Short-Term Incentives (“STI”)
Short term incentives such as cash incentives may be awarded and are determined based on performance targets
established by the Human Resources and Compensation Committee and take into consideration performance
metrics such as the Company’s performance against safety and environmental, social and governance ("ESG") goals,
production metrics such as tonnes mined, tonnes processed and carats recovered and the individual employee’s
contribution to the Company’s performance. The Human Resources and Compensation Committee has not
exercised their discretion to reduce any performance-based elements of remuneration in the current year.
Subsequent to 31 December 2024, Human Resources and Compensation Committee approved the payment of 2024
KMP short term incentives as Restricted Share Units with a three year redemption period.
Key Performance Indicator ("KPI") Scorecard
Long-Term Incentives (“LTI”)
Options may be issued at the Board’s discretion. The Board is of the opinion that the expiry date and exercise price
of the options currently on issue to the Directors and Executives is a sufficient, long-term incentive to reward
Executives in a manner which aligns the element of remuneration with the creation of shareholder wealth.
During the year the Board also approved the Company's Restricted Share Units ("RSU") and Deferred Share Units
("DSU") plan in terms of which Executives were issued RSU and DSU awards as a long-term incentive to incentivise
executives to enhance shareholder results. Both the RSU and DSU vest over a three-year vesting period, and on
redemption are cash settled at the market value on date of redemption. Market value is determined as the 5 day
volume weighted average trading share price of the Company's common shares on the ASX. RSU are exercisable
upon vesting, whereas vested DSU are exercisable after the executive's departure (e.g. retirement, resignation,
death) from the Company.
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Annual Report | Year Ended 31 December 2024
DIRECTOR’S REPORT | 16
Financial Performance
Financial performance for the previous five years is as follows:
years is as follows:
(US$ '000)
31 December
2024
31 December
2023
30 June
2023 (i)
30 June
2022 (i)
30 June
2021 (i)
(97,257)
(676)
(17,802)
(13,601)
(9,088)
(6.84)
(0.05)
(5.09)
(4.09)
(3.61)
Net Loss after tax
Loss per share (cents per share)
(i) Prior year comparatives have been translated from Australian Dollar to US Dollar at the closing spot rate as at end of the
respective year-end.
Director and Officer Share Ownership Standard
Effective as of 1 December 2023, the Board of Directors of the Company has adopted a Share Ownership Standard
to set out share ownership guidelines which will enhance alignment of the interests of non-executive directors and
senior executive officers of the Company with its shareholders.
The share ownership requirements are as follows:
i. Senior Executive Officers
Senior executive officers of the Company are required to beneficially own, control or direct, directly or indirectly,
common shares or share units (including Restricted Share Units and Deferred Share Units) of the Company (the
“Shares”) having minimum values as follows:
•
Chief Executive Officer: Value equal to three (3) times the gross amount of his/her annual base salary.
•
Chief Financial Officer: Value equal to two (2) times the gross amount of his/her annual base salary.
•
Other named executive officers: Value equal to the gross amount of his/her annual base salary.
Individuals in office as at the effective date of this Policy (the “Effective Date”) are required to achieve the applicable
level of share ownership within five (5) years following the Effective Date. Senior executive officers hired
subsequent to the Effective Date must achieve their minimum share ownership level within five (5) years from the
date they are appointed a senior executive officer of the Company.
ii. Non-Executive Directors
Non-executive directors of the Company are required to beneficially own, control or direct, directly or indirectly,
Shares of the Company having a value equal to three (3) times the gross amount of his/her annual director retainer.
Individuals who are non-executive directors as at the Effective Date are required to achieve this level of share
ownership within five (5) years following the Effective Date. Non-executive directors appointed subsequent to the
Effective Date must achieve this share ownership within five (5) years from the date they are elected or appointed
a director of the Company.
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Annual Report | Year Ended 31 December 2024
DIRECTOR’S REPORT | 17
Details of Remuneration
Details of the nature and amount of each major element of the remuneration of each KMP of the Company for
the year ended 31 December 2024 and period ended 31 December 2023 are as follows:
31 December 2024
Short Term Benefits
Post-Employment
Benefits
Share Based Payments
Total
Base Salary
and Fees
Short
Term Cash
Incentive
paid
Short-Term
Cash
Incentive
accrued (i)
Super-
annuation
Other
benefits (ii)
Equity-
settled
options
Equity-or
cash
settled
options
Cash-
settled
restricted
and
deferred
share units
$
$
$
$
$
$
$
$
$
Michael O’Keeffe
160,499
—
—
—
—
—
—
— 160,499
Kim Truter
584,029
274,162
179,026
—
217,549 180,306 307,032
553,276 2,295,380
Marc Dorion
102,205
—
—
—
—
—
—
— 102,205
Brad Baylis
292,015
105,026
67,135
—
94,094
— 153,516
276,637 988,423
Stephen Dennis
93,402
—
—
5,754
—
—
—
—
99,156
Trey Jackson
—
—
—
—
—
—
—
50,556
50,556
Jeremy King
65,161
—
—
4,938
—
—
—
—
70,099
Anshul Gandhi
36,355
—
—
—
—
—
—
—
36,355
Total
1,333,666
379,188
246,161
10,692
311,643 180,306 460,548
880,469 3,802,673
(i) Short-term cash incentive accrued as at 31 December 2024 payable in 2025.
(ii) Other benefits include annual vacation entitlement, defined pension contributions for Canadian residents, and taxable
benefits for life insurance and Accidental Death and Dismemberment.
31 December 2023
Short Term Benefits
Post-Employment Benefits
Share Based Payments
Total
Base
Salary
and Fees
Short
Term Cash
Incentive
paid
Short-
Term Cash
Incentive
accrued (i)
Super-
annuation
Other
benefits (ii)
Equity-
settled
options
Equity-or
cash
settled
options
Cash-
settled
restricted
and
deferred
share units
$
$
$
$
$
$
$
$
$
Michael O’Keeffe
18,002
—
—
1,929
—
—
—
—
19,931
Kim Truter
318,552
81,478
246,601
4,774
78,637 102,010
18,610
119,417
970,079
Marc Dorion
19,892
—
—
—
—
—
—
—
19,892
Brad Baylis
121,759
20,112
57,335
—
36,374
—
9,305
59,709
304,594
Total
478,205
101,590
303,936
6,703
115,011 102,010
27,915
179,126 1,314,496
(i) Short-term cash incentive accrued as at 31 December 2023 payable in 2024.
(ii) Other benefits include annual vacation entitlement, defined pension contributions for Canadian residents, and taxable
benefits for life insurance and Accidental Death and Dismemberment.
For personal use only
Annual Report | Year Ended 31 December 2024
DIRECTOR’S REPORT | 18
The following table shows the relative proportions of remuneration that are linked to performance and those that
are fixed, based on the amounts disclosed as statutory remuneration expense in the tables above:
Fixed Remuneration
At Risk – STI (%)
At Risk – LTI (%)
Name
31 December
2024
31 December
2023
31 December
2024
31 December
2023
31 December
2024
31 December
2023
Michael O’Keeffe
100%
100%
—
—
—
—
Kim Truter
47%
50%
8%
25%
45%
25%
Marc Dorion
100%
100%
—
—
—
—
Brad Baylis
50%
58%
7%
19%
44%
23%
Stephen Dennis
100%
—
—
—
—
—
Trey Jackson
—
—
—
—
100%
—
Jeremy King
100%
—
—
—
—
—
Anshul Gandhi
100%
—
—
—
—
—
The Proportion of the bonus payable or forfeited is as follows:
Cash bonus payable
Cash bonus forfeited
Name
31 December 2024
31 December 2023 31 December 2024
31 December 2023
Michael O’Keeffe
—
—
—
—
Kim Truter
31%
100%
—
—
Marc Dorion
—
—
—
—
Brad Baylis
23%
47%
—
—
Stephen Dennis
—
—
—
—
Trey Jackson
—
—
—
—
Jeremy King
—
—
—
—
Anshul Gandhi
—
—
—
—
Shareholdings of KMP (direct and indirect holdings)
The number of ordinary shares in the Company held by each KMP of the Company during the year ended 31
December 2024 is as follows:
Balance at
1 January
2024
Issued as
Remuneration
Acquired /
Converted
Held at date of
appointment/
(resignation)
Acquired
Balance at
31 December
2024
Michael O’Keeffe
67,903,535
—
—
—
—
67,903,535
Kim Truter
527,000
—
—
—
—
527,000
Marc Dorion
12,541,667
—
—
—
—
12,541,667
Brad Baylis
—
—
—
—
—
—
Stephen Dennis
—
—
—
2,100,000
—
2,100,000
Trey Jackson
—
—
—
—
—
—
Jeremy King
—
—
—
4,646,215
—
4,646,215
Anshul Gandhi
—
—
—
120,000,000
—
120,000,000
Total
80,972,202
—
—
126,746,215
—
207,718,417
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Annual Report | Year Ended 31 December 2024
DIRECTOR’S REPORT | 19
Unlisted Option holdings of KMP (direct and indirect holdings)
The number of unlisted options in the Company held by each KMP of the Company during the year ended 31
December 2024 is as follows:
Balance at
1 January
2024
Issued as
Remuneration
Exercised
Held at
Resignation
Balance at
31 December 2024
Michael O’Keeffe
—
—
—
—
—
Kim Truter
15,048,526
4,289,249
—
—
19,337,775
Marc Dorion
—
—
—
—
—
Brad Baylis
2,524,263
2,144,625
—
—
4,668,888
Stephen Dennis
—
—
—
—
—
Trey Jackson
—
—
—
—
—
Jeremy King
—
—
—
—
—
Anshul Gandhi
—
—
—
—
—
Total
17,572,789
6,433,874
—
—
24,006,663
KMP Contractual Arrangements
Kim Truter - Chief Executive Officer and Managing Director
Upon his new contract, which was issued on 1 July 2023, Mr. Truter’s new annual remuneration package is to
include the following key items updated to reflect subsequent option, RSU and DSU grants:
•
Fixed remuneration of CDN$800,000.
•
Short-term cash incentive eligibility based on performance, equivalent to a target of 100% of Mr. Truter’s
base salary.
•
Long term incentive eligibility comprising of the following:
o
an option to purchase 4,289,249 shares at a strike price of A$0.2116 per share. One third of the
options award will vest annually on the anniversary of the original grant date over a three-year
period per the terms of the plan. The options will expire 5 years from the date of the original grant.
The option holder has the right to have these awards settled via issuance of Company shares,
cashless exercise or payment in cash.
o
a RSU award of 2,144,625 RSU granted on 1st April 2024. One third of the RSU award will vest
annually on the anniversary of the original grant date over a three-year period per the terms of the
plan. These RSU awards are cash-settled.
o
a RSU award valued at CDN$400,000 (50% of base salary) effective 1st December 2023. The RSU’s
will be valued at parity with the share price determined based on the volume weighted average
price (VWAP) per share traded of the Company on the ASX over the five (5) trading days
immediately preceding the identified issue date of 1 December 2023, unless otherwise specified.
One third of the RSU award will vest annually on the anniversary of the original grant date over a
three-year period per the terms of the plan. These RSU awards are cash-settled.
o
options award valued at CDN$400,000 (50% of base salary) effective 1 December 2023. The options
quantum will be valued at 50% of face value share price determined based on the volume weighted
average price (VWAP) per share traded of the Company on the ASX over the five (5) trading days
immediately preceding the identified issue date of 1 December 2023, unless otherwise specified.
A valuation factor of 0.5 is applied when determining the total award value. One third of the
options award will vest annually on the anniversary of the original grant date over a three-year
period per the terms of the plan. The options will expire 5 years from the date of the original grant.
The option holder has the right to have these awards settled via issuance of Company shares,
cashless exercise or payment in cash.
o
a one-off DSU award valued at CDN$2,400,000 (300% of base salary) effective 1 December 2023.
The DSU’s will be valued at parity with the share price determined based on the volume weighted
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Annual Report | Year Ended 31 December 2024
DIRECTOR’S REPORT | 20
average price ("VWAP") per share traded of the Company on the ASX over the five (5) trading days
immediately preceding the identified issue date of 1 December 2023, unless otherwise specified.
One third of the DSU award will vest annually on the anniversary of the original grant date over a
three-year period per the terms of the plan. Vested DSU’s are exercisable only after departure from
the Company. These DSU awards are cash-settled.
•
Initial Share-Based Incentive comprising of three parts:
o
an option to purchase 5,000,000 shares at a strike price of A$0.30 per Share, which options shall
vest on the date that is one year after the close of the acquisition of Arctic Companies, and expire
two years from the date on which they vest.
o
an option to purchase 3,000,000 shares at a strike price of A$0.30 per Share which options shall
vest on the date on which the Group's carat production in fiscal 2026 exceeds 3,000,000 carats,
and expire two years from the date on which they vest.
o
an option to purchase 2,000,000 shares at a strike price of A$0.30, which options shall vest on the
date on which the Group's carat production in fiscal 2027 exceeds 3,000,000 carats, and expire two
years from the date on which they vest.
Brad Baylis - Chief Financial Officer
Upon his new contract, which was issued on 23 November 2023, Mr. Baylis’ new annual remuneration package
updated to reflect subsequent option, RSU and DSU grants is to include the following key items:
•
Fixed remuneration of CDN$400,000.
•
Short-term cash incentive eligibility based on performance, equivalent to a target of 75% of Mr. Baylis’ base
salary.
•
Long term incentive comprising of the following:
o
an option to purchase 2,144,625 shares at a strike price of A$0.2116 per share. One third of the
options award will vest annually on the anniversary of the original grant date over a three-year
period per the terms of the plan. The options will expire 5 years from the date of the original grant.
The option holder has the right to have these awards settled via issuance of Company shares,
cashless exercise or payment in cash.
o
a RSU award of 1,072,312 RSU granted on 1st April 2024. One third of the RSU award will vest
annually on the anniversary of the original grant date over a three-year period per the terms of the
plan. These RSU awards are cash-settled.
o
a RSU award valued at CDN$200,000 (50% of base salary) effective 1 December 2023. The RSU’s
will be valued at parity with the share price determined based on the volume weighted average
price (VWAP) per share traded of the Company on the ASX over the five (5) trading days
immediately preceding the identified issue date of 1 December 2023, unless otherwise specified.
One third of the RSU award will vest annually on the anniversary of the original grant date over a
three-year period per the terms of the plan. These RSU awards are cash-settled.
o
options award valued at CDN$200,000 (50% of base salary) effective 1 December 2023. The options
quantum will be valued at 50% of face value share price determined based on the volume weighted
average price (VWAP) per share traded of the Company on the ASX over the five (5) trading days
immediately preceding the identified issue date of 1 December 2023, unless otherwise specified.
A valuation factor of 0.5 is applied when determining the total award value. One third of the
options award will vest annually on the anniversary of the original grant date over a three-year
period per the terms of the plan. The options will expire 5 years from the date of the original grant.
The option holder has the right to have these awards settled via issuance of Company shares,
cashless exercise or payment in cash.
For personal use only
Annual Report | Year Ended 31 December 2024
DIRECTOR’S REPORT | 21
o
a one-off DSU award valued at CDN$1,200,000 (300% of base salary) effective 1 December 2023.
The DSU’s will be valued at parity with the share price determined based on the volume weighted
average price ("VWAP") per share traded of the Company on the ASX over the five (5) trading days
immediately preceding the identified issue date of 1 December 2023, unless otherwise specified.
One third of the DSU award will vest annually on the anniversary of the original grant date over a
three-year period per the terms of the plan. Vested DSU’s are exercisable only after departure from
the Company. These DSU awards are cash-settled.
Non-Executive Director Arrangements
Non-executive directors receive a board fee and fees for chairing or participating on board committees. The term
of each Non-Executive Director is open to the extent that they hold office subject to retirement by rotation, as per
the Company’s Constitution, at each AGM and are eligible for re-election as a director at the meeting. Appointment
shall cease automatically if the Director gives written notice to the Board, or the Director is not re-elected as a
Director by the shareholders of the Company. There are no entitlements following retirement or termination of an
appointment.
Effective 1 January 2024, the Non-executive Chair is paid a fee of $152,895 (CDN$220,000) and Non-Executive
Directors are paid fees of $83,397 (CDN$120,000) per annum. The fee for chairing board committees is $13,900
(CDN$20,000) per annum. Statutory superannuation is paid for directors that are resident of Australia.
Share-based Compensation
The Company may reward management for their performance and align their remuneration with the creation of
shareholder wealth by issuing share options. Share-based compensation is at the discretion of the Board and no
individual has a contractual right to receive any guaranteed benefits. Details of shares and options issued to
directors and other KMP as part of compensation during the year ended 31 December 2024 are noted below.
Options
The Company issued 6,433,874 options as part of compensation to KMP during the year.
Ordinary Shares
The Company did not issue ordinary shares as part of compensation to KMP during the year.
Equity Instruments Issued on Exercise of Options
There were no options exercised during the year by KMP.
RSU and DSU awards
The Company issued 3,216,937 in RSU awards to KMP during the year. 916,833 DSU awards were issued to KMP
during the year.
Loans with KMP
There were no other loans made to any KMP during the year ended 31 December 2024 (31 December 2023: $nil).
There were no loans from any KMP during the year ended 31 December 2024 (31 December 2023: $nil).
During September 2024, the convertible notes that Mr. Michael O'Keeffe had subscribed for amounting to
5,000,000 unsecured convertible notes with a face value of A$1 were fully settled in cash. The interest rate on these
convertible notes is 6% per annum and during the year, interest of $149,389 was paid to Mr. O'Keeffe (period ended
31 December 2023: $98,186 was paid to Mr. O’Keeffe and accrued interest payable due to Mr. O'Keeffe was
$8,915).
Other Transactions with KMP
The Company also had purchases of $0.4 million from and sales of $0.2 million to a company managed by a director
of the Group for the year ended 31 December 2024. Furthermore, the Arctic Companies had sales of $5.7 million
to companies managed by a director of the Group.
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Annual Report | Year Ended 31 December 2024
DIRECTOR’S REPORT | 22
At 31 December 2024, the Company had $129,046 of directors fees payable (31 December 2023: $19,684) and
$382,236 of bonuses payable (31 December 2023: $303,936) to KMP . There were no other transactions with KMP
during the period ended 31 December 2024.
This concludes the remuneration report, which has been audited.
Shares Under Option
At the date of this report there were the following unissued ordinary shares for which options are outstanding:
1,000,000 options expiring 5 August 2026, exercisable A$0.26
877,408 options expiring 30 August 2027, issued to employees in recognition of achieving performance milestones.
There is no consideration payable to exercise the options.
10,000,000 options of which 5,000,000 options expire 1 July 2026, 3,000,000 options expire two years after the
date on which Group's carat production in fiscal 2026 exceeds 3,000,000 carats and 2,000,000 options expire two
years after the date on which Group's carat production in fiscal 2027 exceeds 3,000,000 carats, exercisable A$0.30
12,065,136 options expiring 30 November 2028, exercisable A$0.18
12,360,994 options expiring on 31 March 2029, exercisable A$0.21
Indemnification and Insurance of Officers and Auditors
The Company has indemnified the Directors and Executives of the Company for costs incurred, in their capacity as
a Director or Executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and
Executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor
of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
Environmental Regulations
Burgundy's subsidiary Arctic Canadian Diamond Company Ltd is subject to meeting Canadian Northwest Territories
("NWT") environmental regulations and Canadian Federal Environmental guidelines. We are currently evaluating
the ESG reporting requirements. There have not been any known significant breaches of any environmental
regulations during the period under review and up until the date of this report.
People
During the year ended 31 December 2024, 30% of our Ekati employees were northern residents, and of this figure,
68% were northern Indigenous. Our total number of employees and contractors in 2024 at the Ekati Diamond Mine
was 862 including 593 employees and 269 contractors; in Belgium was 6 employees and in Australia was 14
employees.
Safety
We continue our commitment to mine in a safe and responsible way by providing our people with the data and
information needed to perform their work safely. Seven lost time injuries were experienced during the year ended
31 December 2024 across the Ekati Diamond Mine.
Environment
The Group invests in the communities in which it operates and is committed to protecting and reclaiming the
environment. During the year ended 31 December 2024, there were no significant environmental incidents at the
Ekati Diamond Mine.
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Annual Report | Year Ended 31 December 2024
DIRECTOR’S REPORT | 23
Greenhouse Gas Emissions during the year ended 31 December 2024 were 151,841 tonnes of Carbon Dioxide
equivalent (period ended 31 December 2023: 79,420 tonnes).
As at 31 December 2024 the total site reclamation costs recorded as a liability on the statement of financial position
was $229.2 million for the Ekati Diamond Mine (31 December 2023: $236.2 million). Further information regarding
future site restoration costs is included in Note 25 of the consolidated financial statements.
The Group is in the process of assessing the reporting requirements under sustainability and ESG reporting.
Proceedings on Behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purposes of
taking responsibility on behalf of the Company for all or part of these proceedings.
Auditor
KPMG Australia are the auditor of the Group and were appointed as auditor on 21 November 2023 in accordance
with section 327 of the Corporations Act 2001.
Officers of the Company Who Are Former Partners of KPMG Australia
There are no officers of the Company who are former partners of KPMG Australia.
Lead Auditor’s Independence Declaration
The lead auditor’s independence declaration under Section 307C of the Corporations Act 2001 for the year ended
31 December 2024 has been received and included within these financial statements.
Non-Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where
the auditor’s expertise and experience with the Company are important.
Details of the amounts paid or payable to the auditor for non-audit services provided during the year by the auditor
are outlined in Note 32 to the financial statements.
The Board of Directors has considered the position and is satisfied that the provision of the non-audit services is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The
Directors are satisfied that the provision of non-audit services by the auditors, as set out below, did not compromise
the auditor independent requirements of the Corporations Act 2001 for the following reasons:
•
All non-audit services have been reviewed by the Board of Directors to ensure they do not impact the
impartiality and objectivity of the auditor; and
•
None of the services undermine the general principles relating to the auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
This report is signed in accordance with a resolution of the Board of Directors.
Michael O’Keeffe
Chair
31 March 2025
For personal use only
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used
under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under
Professional Standards Legislation.
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Burgundy Diamond Mines Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Burgundy Diamond
Mines Limited for the financial year ended 31 December 2024 there have been:
i.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
NI_01
_SIG_01
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PAR_DAT_01
PAR_CIT_01
KPMG
Matthew Hingeley
Partner
Perth
31 March 2025
For personal use only
FINANCIAL STATEMENTS
For personal use only
Annual Report | Year Ended 31 December 2024
FINANCIAL STATEMENTS | 26
Consolidated Statement of Loss and Other Comprehensive Loss
(expressed in thousands of United States dollars)
Six month
Year ended
period ended
Note
31 December 2024
31 December 2023
Revenue
6
442,117
257,484
Cost of sales
7
(370,605)
(231,146)
Gross margin
71,512
26,338
Other income
8
9,046
7,532
Selling and distribution expenses
7
(6,031)
(3,709)
General and administrative expenses
7
(23,158)
(10,460)
Impairment of property, plant and equipment
7,12
(151,621)
—
Other expenses
7
(9,731)
(2,049)
Operating (loss) profit
(109,983)
17,652
Finance expenses
9
(27,416)
(14,155)
Finance income
6,509
2,685
Net finance costs
(20,907)
(11,470)
Fair value adjustment on consideration payable
22
676
5,764
Foreign exchange loss
(2,854)
(864)
(Loss) profit before income taxes
(133,068)
11,082
Current tax recovery (expense)
10
13,645
(14,951)
Deferred tax recovery
10
22,166
3,193
Tax recovery (expense)
35,811
(11,758)
Net loss
(97,257)
(676)
Other comprehensive income (loss)
Items that will not be reclassified to profit or loss
Re-measurement of defined benefit obligation (net of tax
expense of $0.0 million for year ended 31 December 2024 -
net of tax expense of $0.3 million for period ended 31
December 2023)
18
36
(505)
Other comprehensive income (loss) for the period, net of tax
36
(505)
Total comprehensive loss attributable to the owners
(97,221)
(1,181)
Loss per share for the period attributable to the owners:
Basic loss per share (cents)
11
(6.84)
(0.05)
Diluted loss per share (cents)
11
(6.84)
(0.05)
The Consolidated Statement of Loss and Other Comprehensive Loss should be read in conjunction with the notes
to the consolidated financial statements.
For personal use only
Annual Report | Year Ended 31 December 2024
FINANCIAL STATEMENTS | 27
Consolidated Statement of Financial Position
(expressed in thousands of United States dollars)
Note
31 December 2024
31 December 2023
ASSETS
Non-current assets
Property, plant and equipment
12
135,594
238,518
Other non-current assets
13
92,521
74,941
Total non-current assets
228,115
313,459
Current assets
Tax receivable
11,221
—
Inventory and supplies
14
186,049
244,931
Other current assets
5,081
4,262
Trade and other receivables
15
6,178
9,907
Cash and cash equivalents
16
25,142
94,426
Total current assets
233,671
353,526
Total assets
461,786
666,985
EQUITY
Contributed equity
17
200,607
200,607
Reserves
18
7,862
6,796
Accumulated losses
(146,428)
(49,171)
Total equity
62,041
158,232
LIABILITIES
Non-current liabilities
Loans and borrowings
19
73,834
73,834
Provision for make good
20
65
64
Deferred income
211
—
Contingent consideration
21
—
7,111
Consideration payable
22
18,927
25,935
Lease obligations
23
7,603
16,468
Employee benefit plans
24
3,566
3,828
Reclamation provisions
25
229,224
236,204
Deferred tax liabilities
10
55
22,202
Total non-current liabilities
333,485
385,646
Current liabilities
Trade and other payables
26
48,420
54,017
Current portion of loans and borrowings
19
—
22,304
Current portion of deferred income
94
—
Current portion of consideration payable
22
6,280
10,844
Current portion of lease obligations
23
9,463
9,644
Current portion of employee benefit plans
24
2,003
354
Tax payable
10
—
25,944
Total current liabilities
66,260
123,107
Total liabilities
399,745
508,753
Total equity and liabilities
461,786
666,985
The Consolidated Statement of Financial Position should be read in conjunction with the notes to the consolidated
financial statements.
For personal use only
Annual Report | Year Ended 31 December 2024
FINANCIAL STATEMENTS | 28
Consolidated Statement of Changes in Equity
(expressed in thousands of United States dollars)
For the Year Ended 31 December 2024
Note
Issued
Capital
Convertible
Notes Reserve
Other
Reserves
Accumulated
Losses
Total
Balance at 1 July 2023
153,511
4,384
2,940
(48,495) 112,340
Net loss for the period
—
—
—
(676)
(676)
Re-measurement of defined benefit obligation
—
—
(505)
—
(505)
Total comprehensive loss for the period
—
—
(505)
(676)
(1,181)
Transactions with owners of the Group:
Issue of share capital
17
47,096
—
—
—
47,096
Share-based payments
18
—
—
(23)
—
(23)
Balance at 31 December 2023
200,607
4,384
2,412
(49,171) 158,232
Net loss for the year
—
—
—
(97,257) (97,257)
Re-measurement of defined benefit obligation
—
—
36
—
36
Total comprehensive loss for the year
—
—
36
(97,257) (97,221)
Transactions with owners of the Group:
Share-based payments
18
—
—
1,030
—
1,030
Balance at 31 December 2024
200,607
4,384
3,478
(146,428)
62,041
The Consolidated Statement of Changes in Equity should be read in conjunction with the notes to the consolidated
financial statements.
For personal use only
Annual Report | Year Ended 31 December 2024
FINANCIAL STATEMENTS | 29
Consolidated Statement of Cash Flows
(expressed in thousands of United States dollars)
Six month
Year ended
period ended
Note
31 December 2024
31 December 2023
OPERATING
Net loss
(97,257)
(676)
Adjustments for
Depreciation and amortisation
7
52,312
43,897
Deferred tax recovery
10
(22,166)
(3,193)
Current tax recovery (expense)
10
(13,645)
14,951
Finance expenses
9
27,416
14,155
Finance income
(6,509)
(2,685)
Share-based compensation
2,880
298
Other non-cash items
78
(173)
Derecognition of contingent consideration
21
(7,500)
(7,401)
Fair value adjustment on consideration payable
22
(676)
(5,764)
Private royalties paid
22
(10,896)
(4,739)
Unrealised foreign exchange loss
3,259
457
Defined benefit plan contributions
24
(2,073)
(906)
Impairment losses on inventory
7
—
146
Impairment of property, plant and equipment
7
151,621
—
Government grants
351
—
Interest paid
(14,733)
(5,538)
Interest received
4,006
1,198
Reclamation expenditures
—
53
Income taxes paid
(23,426)
(1,366)
Settlement of share-based compensation
29
—
(62)
Change in non-cash operating working capital
Accounts receivable
2,333
4,568
Inventory and supplies
47,560
8,569
Other current assets
(820)
3,127
Trade and other payables
(7,119)
8,008
Employee benefit plans
2,079
1,029
Net cash from operating activities
87,075
67,953
INVESTING
Consideration for acquisition (net of cash acquired)
—
(27,994)
Proceeds from exercise of stock options
—
338
Purchase of property, plant and equipment
(98,490)
(12,614)
Proceeds from sale of property, plant and equipment
771
—
Decrease in restricted cash
13
2,391
153
Decrease (increase) in collateral for reclamation surety bonds
13
31,735
(11,943)
Increase in collateral for reclamation security deposits
13
—
(15,899)
Contribution to environmental trust fund
13
(58,670)
—
Net cash used in investing activities
(122,263)
(67,959)
FINANCING
Repayment of borrowings
30
—
(26,626)
Repayment of convertible notes
30
(23,245)
—
Lease payments
23
(10,025)
(4,116)
Net cash used in financing activities
(33,270)
(30,742)
Net decrease in cash and cash equivalents
(68,458)
(30,748)
Cash and cash equivalents, beginning of the period
94,426
125,355
Foreign exchange effect on cash balances
(826)
(181)
Cash and cash equivalents, end of the period
25,142
94,426
The Consolidated Statement of Cash Flow should be read in conjunction with the notes to the consolidated financial
statements.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 30
Notes to the Consolidated Financial Statements
NOTE 1
REPORTING ENTITY
Reporting Entity
Burgundy Diamond Mines Limited ("Burgundy" or "the Company") is a company limited by shares and domiciled
in Australia. Burgundy's registered office is located at Level 25, South32 Tower, 108 St Georges Terrace, Perth WA
6000, Australia. The consolidated financial statements of the Company as at and for the year ended 31 December
2024 comprise the Company and its subsidiaries ("the Group").
The Company's Perth location focuses on cutting, polishing and sales of polished diamonds. ACDC owns 100% of
Ekati Diamond Mine, a producing diamond mine located in Canada’s Northwest Territories. Ekati Diamond Mine
consists of the Core Zone, which includes the primary mining operations and other kimberlite pipes, as well as the
Buffer Zone, an adjacent area hosting kimberlite pipes having both development and exploration potential. ACDM
is a marketing business responsible for management of the supply chain, sorting, preparation, marketing and sales
of rough diamonds from Ekati Diamond Mine.
NOTE 2
BASIS OF PRESENTATION
(a) Statement of compliance
The consolidated financial statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board (“AASB”) and the Corporations Act 2001. The consolidated financial statements comply with
International Financial Reporting Standards (“IFRS”) adopted by the International Accounting Standards Board
(“IASB”). Burgundy Diamond Mines Limited is a for-profit entity for the purpose of preparing the financial
statements.
The Group is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors' Reports)
Instrument 2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument amounts in the
consolidated financial statements are rounded off to the nearest thousand dollars ($'000), unless otherwise
indicated.
The annual report was authorised for issue by the Board of Directors on 31 March 2025.
(b) Going concern
The consolidated financial statements have been prepared on a going concern basis that contemplates the
continuity of business activities in the foreseeable future and the realisation of assets and extinguishment of
liabilities in the normal course of operations at the amounts stated in the consolidated financial statements
that will generate sufficient income and cash flows to repay obligations, finance operations and fund capital
investments to sustain operations. During the year ended 31 December 2024, the Group incurred a net loss of
$97.3 million, generated cash flows of $87.1 million from operating activities and has net current assets of $167.4
million. The Group also has $129.0 million of contractual commitments that include quarterly surety cash
collateralisation payments of $10.1 million totalling to $62.5 million by the end of 2025 (see Note 31) and $66.3
million of current liabilities due in the next 12 months.
In making the going concern assessment, the directors prepared a detailed cash flow forecast for the Consolidated
Group ending 31 March 2026 which indicates that it will be able to meet its obligations as and when they fall due.
The Directors consider it is appropriate to adopt the going concern basis in the preparation of the consolidated
financial statements after consideration of the following factors:
•
Management completed a fuel offtake agreement to improve working capital management. In February
2025, the Group received approximately $39.2 million from Macquarie and will make monthly payments
to Macquarie based on fuel consumption with total amount payable by February 2026 (refer to Note 35);
•
Quarterly surety payments will be deferred if the Group is not able to maintain at least US$30.0 million of
cash at all times (in line with the terms of agreement to defer the payments without any default - refer to
Note 31(b));
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 31
•
Management is in discussions with lenders to provide non-dilutive working capital debt facility. The
cashflow forecast does not assume any further financing however in the event of reduced profitability
additional financing would be required; and
•
In the event that the cash flows become constrained, the Group can reduce development capital and
exploration expenditures through postponing or pausing projects, deferring or cancelling discretionary
spending.
The Group has made key assumptions in preparing the cashflow forecast that drives the uncertainty
in going concern basis of preparation, namely:
•
Price and production forecasts will be met to enable the Group to generate sufficient cash from operations
to meet its obligations in the next 12 months. The Group predominantly operates in an industry closely
correlated with commodity prices. The commodity prices have an inherent risk of external market/price
volatilities which are outside of the Group’s control. The cashflow forecast is sensitive to these external
factors. In the event that the price and production forecasts are not met, the Group would require
additional financing.
•
The liability of 2L Loan due in June 2026 will be deferred to a later future date and/or re-financed.
In order to continue as a going concern, the Group must generate sufficient income and cash flows to
repay obligations, finance operations and fund capital investments to sustain operations. This will require the
Group to generate sufficient funds from operations, and in the event this is not achieved, support from lenders
by obtaining new debt financing. There is no certainty that the Group will achieve the production and price
forecasts or receive the required support from its lenders.
As a result, there is a material uncertainty as to whether the Group can continue to operate as a going concern
in the period 12 months from the date of the approval of the financial statements and be able to realise its
assets and liabilities at the amounts recorded in the financial statements.
(c) Basis of measurement
The consolidated financial statements have been prepared in accordance with the historical cost convention
unless otherwise stated.
(d) Significant Judgements and Estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the financial statements are disclosed in Note 3.
(e) Change in fiscal year end and comparatives
Effective 30 November 2023, the Company changed its fiscal year end from 30 June 2023 to 31 December 2023
to better align the Company’s financial disclosures with its peers in the mining sector and for operational and
administrative efficiencies.
The comparative figures presented in these annual financial statements cover the six-month period from 1 July
2023 to 31 December 2023 ("Transitional Financial Year") during which the Company changed its fiscal year-end.
As a result of the change in prior fiscal year-end, the comparative amounts presented may not be entirely
comparable with the current annual reporting period.
(f) Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in Note 33.
(g) New, revised or amended standards and interpretations adopted by the Group
A number of new or amended standards became applicable for the current reporting period. The Group did not
have to change its accounting policies or make retrospective adjustments as a result of adopting these
standards.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 32
Non-current liabilities with covenants (Amendments to IAS 1)
The International Accounting Standards Board (“IASB”) has published 'Non-current Liabilities with Covenants
(Amendments to IAS 1) to clarify how conditions with which an entity must comply within twelve months after
the reporting period affect the classification of a liability. These amendments modify the requirements
introduced by Classification of Liabilities as Current or Non-current on how an entity classifies debt and
other financial liabilities as current or non-current in particular circumstances: only covenants with which an
entity is required to comply on or before the reporting date affect the classification of a liability as current or
non-current. In addition, an entity has to disclose information in the notes that enables users of financial
statements to understand the risk that non-current liabilities with covenants could become repayable within
twelve months. The amendments are effective for reporting periods beginning on or after 1 January 2024. The
amendments are applied retrospectively in accordance with IAS 8 and earlier application is permitted. The
adoption of this accounting standard on 1 January 2024, did not result in any material impact to the Group's
consolidated financial statement figures or disclosures.
Deferred tax assets and liabilities arising from a single transaction
The Group has adopted Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(amendments to IAS 12) from 1 July 2023. The amendments narrow the scope of the initial recognition
exemption to exclude transactions that give rise to equal and offsetting temporary differences – e.g.
leases and decommissioning liabilities. For leases and decommissioning liabilities, an entity is required to
recognise the associated deferred tax assets and liabilities from the beginning of the earliest comparative
period presented, with any cumulative effect recognised as an adjustment to retained earnings or other
components of equity at that date. For all other transactions, an entity applies the amendments to transactions
that occur on or after the beginning of the earliest period presented.
Adoption of the amendment to IAS 12 did not result in any material impact to the Group's consolidated financial
statement figures or disclosures.
Material accounting policy information
The Group also adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
from 1 July 2023. Although the amendments did not result in any changes to the accounting policies themselves,
they impacted the accounting policy information disclosed in the financial statements.
The amendments require the disclosure of ‘material’, rather than ‘significant’, accounting policies. The
amendments also provide guidance on the application of materiality to disclosure of accounting policies,
assisting entities to provide useful, entity-specific accounting policy information that users need to
understand other information in the financial statements. Management reviewed the accounting policies and
made updates to the information disclosed in Note 34 Material accounting policies in certain instances in line
with the amendments.
(h) New accounting standards issued but not yet effective
A number of new accounting standards and amendments to accounting standards are effective for annual
periods on and after 1 January 2025 and early application is permitted. The Group has not early adopted
any of the forthcoming new or amended accounting standards in preparing the consolidated financial
statements.
Presentation and disclosure in financial statements (IFRS 18)
In April 2024, IFRS 18 was issued by the IASB introducing new requirements to help achieve comparability of the
financial performance of similar entities. IFRS 18 focuses on the income statement requiring new subtotals and
the classification of income and expenses into operating, investing and financing categories as well as disclosure
of management performance measures and guidance on grouping information in the financial statements. IFRS
18 will replace IAS 1, Presentation of Financial Statements, retaining many of the general requirements of IAS 1.
The new standard is effective for reporting periods beginning on 1 January 2027, applied retrospectively. The
Company is currently assessing the impact of IFRS 18 on its consolidated financial statements.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 33
NOTE 3
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates its
judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other various
factors, including expectations of future events management believes to be reasonable under the circumstances.
The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements,
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are discussed below.
a) Judgements
• Note 27 (b) – Liquidity and capital risk management: forecasting cash flows for current and subsequent
fiscal years;
• Note 34 (c) (ii) – Commercial production: the start date of commercial production;
• Note 34 (e) – Impairment: assessment of impairment indications;
• Note 34 (n) – Commitments and contingencies: assumptions about likelihood and magnitude of an outflow
of resources; and
• Note 34 (r) – Functional currency: determination of functional currency.
b) Assumptions and estimates
• Note 34 (c) (iv) – Depreciation and amortisation: ore reserve and mineral resource estimates and unit-of-
production depreciation;
• Note 34 (e) – Impairment of non-financial assets: assumptions used to determine recoverable amounts;
• Note 34 (f) – Inventories: determination of net realisable value;
• Note 34 (k) – Mine rehabilitation and site restoration provision: expectation of future site closure and
reclamation activities and the amount and timing of associated cash flows;
• Note 34 (l) – Recovery of deferred tax assets: assess the likelihood of taxable earnings;
• Note 34 (u) – Share based payments: assumptions used in determining the fair value of the equity
instruments at the date at which they are granted.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 34
NOTE 4
ACQUISITION OF ARCTIC COMPANIES
On 14 March 2023, Burgundy announced that it had executed a binding share purchase agreement (“SPA”) with
Arctic Canadian Diamond Holding, LLC (“Arctic Shareholder”) to acquire 100% of the issued capital of the Arctic
Companies. The acquisition completion date was 1 July 2023 (the "Acquisition").
The Arctic Companies were acquired for total consideration of $117.5 million (“Consideration”) which comprised
of total up front consideration of $103.2 million as follows:
•
$21.7 million in ordinary shares of the Company issued to the Arctic Shareholder, through the issuance of
approximately 129.2 million shares at an issuance price of A$0.25 (“Consideration Shares”);
•
A deferred payment of $8.4 million payable by December 2023 (“Deferred Payment”) to the Arctic
Shareholder;
•
Repayment of the $73.2 million outstanding debt balance owed by ACDC to the First and the Second Lien
Term loan providers (the "Lenders"), who through the Arctic Shareholder entity were also the primary
equity holders of Arctic Companies prior to the acquisition. Repayment to the lenders comprised of a $48.1
million cash payment and the issuance of US$25.1 million in Company shares to the lenders, based on the
issue price of A$0.25. This repayment serves as full settlement of the First Lien Term Loan and as partial
settlement of the Second Lien Term loan of ACDC; and
•
$100 promissory note issued to the Arctic Shareholder relating to the acquisition of ACDM.
In addition, the Company has agreed to the following earn-out payments to the Arctic Shareholder ("Contingent
Consideration"):
•
an earn-out cash payment of $7.5 million to the Arctic Shareholder in the first quarter of 2024, subject to
the reported earnings before income tax, depreciation and amortisation ("EBITDA") of the Arctic
Companies for the 2023 calendar year being equal to or exceeding $200.0 million ("Earn-out Payment 1");
and
•
an earn-out cash payment of $7.5 million to the Arctic Shareholder in the first quarter of 2025, subject to
the reported EBITDA of the Arctic Companies for the 2024 calendar year being equal to or exceeding $200.0
million ("Earn-out Payment 2").
Contingent consideration comprising of the two earnout notes totalling to $15.0 million was recorded at its fair
value of $14.3 million. The fair value was measured using a discounted risk-free rate of 4.0% adopted based on
the 5-year treasury bill as at 1 July 2023.
The breakdown of total consideration is noted in the table below and presented in USD '000:
1 July 2023
Consideration shares
21,656
Deferred Payment
8,366
Debt Repayment
48,140
Debt Repayment Shares
25,069
Earn-out Payment 1
7,304
Earn-out Payment 2
6,970
Total consideration (i)
117,505
(i) Total consideration also includes $100 for acquisition of ACDM
The Acquisition has been accounted for as a business combination in accordance with IFRS 3, Business
Combinations (“IFRS 3”). The results of Arctic Companies have been consolidated with those of the Company
commencing on the Acquisition Date. The acquisition of Arctic Companies is to complete Burgundy’s strategy of
becoming vertically integrated across the diamond value chain. Ekati Diamond Mine delivers rough diamond
production that can be cut and polished in the polishing facilities in Perth and sold to end-customers.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 35
The purchase price was allocated to underlying assets acquired and liabilities assumed based on the fair values at
the date of acquisition. With the involvement of external specialists, these fair values were determined as follows:
(i) Property, Plant and equipment: The valuation techniques applied consider market prices for similar items when
these are available, and depreciated replacement cost when appropriate. Depreciated replacement cost reflects
adjustments for physical and economic obsolescence. These values are further adjusted after comparison to the
overall assessed fair value of the Ekati Diamond Mine.
(ii) Diamond inventory: Fair value is determined based on selling price in the ordinary course of business and a
reasonable profit margin based on effort required to complete and sell these inventories.
Identifiable assets acquired and liabilities assumed
The following table provides the final fair values of net assets acquired:
1 July 2023
Inventory and supplies
260,794
Other current assets
7,013
Trade and other receivables
8,942
Cash and cash equivalents
20,147
Property, plant and equipment
249,035
Other non-current assets
49,469
Trade and other payables
(33,251)
Consideration payable
(47,282)
Lease liabilities
(29,434)
Employee benefit plans
(3,121)
Reclamation provision
(226,302)
Income taxes payable
(12,385)
Loans and borrowings
(100,460)
Deferred tax liabilities
(25,660)
Total net assets acquired
117,505
Total consideration
117,505
Transaction costs of $7.5 million were incurred of which $5.2 million were capitalised to contributed equity as
these relate to the share issuance as part of the Acquisition and $2.3 million were expensed in other expenses in
consolidated statement of loss. These transaction costs were primarily related to professional fees, legal,
consulting and advisory fees for services rendered in connection with the Acquisition. On acquisition date, the
reclamation asset was valued at $nil.
As the acquisition was completed on 1 July 2023 which is also the commencement of the fiscal year, revenue and
income of Arctic Companies is included in the consolidated statement of loss from 1 July 2023, $257.0 million of
revenue and $4.3 million of net profit of Arctic Companies were included in the consolidated statement of loss.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 36
NOTE 5
SEGMENT INFORMATION
(a) Business segments
The identification of operating segments by management is based on product areas in internal reports regularly
examined by the Board of Directors. This process facilitates resource allocation and performance evaluation for
each segment based on differences in products or services. The Group's reportable segments comprise Rough
Diamond and Polished Diamond. The Rough Diamond segment encompasses mining, sales and marketing of rough
diamonds. The Polished Diamond segment encompasses manufacturing, sales and marketing of polished
diamonds.
The accounting policies of the reportable segments are the same as the Group’s accounting policies as described
in Note 34. Information regarding the Group’s reportable segments is presented below.
For the year ended 31 December 2024
Rough
Diamond
Polished
Diamond Total Reportable
Segments Unallocated
Amounts
Total
Revenue
440,308
5,043
445,351
—
445,351
Elimination of inter-segment
(1,009)
(2,225)
(3,234)
—
(3,234)
Segment revenue
439,299
2,818
442,117
—
442,117
Cost of sales
Production cost of inventories
(317,271)
(2,108)
(319,379)
—
(319,379)
Depreciation and amortisation
(51,043)
(183)
(51,226)
—
(51,226)
Total cost of sales
(368,314)
(2,291)
(370,605)
—
(370,605)
Gross margin
70,985
527
71,512
—
71,512
Other income
1,420
—
1,420
7,626
9,046
Selling and distribution expenses (i)
(3,260)
(447)
(3,707)
(2,324)
(6,031)
General and administration expenses (i)
—
—
—
(23,158)
(23,158)
Impairment of property, plant and equipment
(151,621)
—
(151,621)
-
(151,621)
Other expenses
(9,675)
—
(9,675)
(56)
(9,731)
Operating profit (loss)
(92,151)
80
(92,071)
(17,912)
(109,983)
Finance expenses
(16,843)
—
(16,843)
(10,573)
(27,416)
Finance income
5,677
23
5,700
809
6,509
Fair value adjustment on consideration payable
676
—
676
—
676
Foreign exchange (gain) loss
(10,440)
(13)
(10,453)
7,599
(2,854)
Segment profit (loss) before taxes
(113,081)
90
(112,991)
(20,077)
(133,068)
Tax expense
35,811
—
35,811
—
35,811
Segment profit (loss) after taxes
(77,270)
90
(77,180)
(20,077)
(97,257)
Segmented assets as at 31 December 2024
447,529
8,478
456,007
5,779
461,786
Segmented liabilities as at 31 December 2024
320,680
594
321,274
78,471
399,745
Capital expenditures (ii)
113,969
—
113,969
647
114,616
(i) $2.9 million of share-based compensation expense and $1.1 million of depreciation and amortisation are included in selling
and distribution expenses and general and administrative expenses.
(ii) Capital expenditures includes PP&E additions and right-of-use assets.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 37
For the six month period ended 31 December 2023
Rough
Diamond
Polished
Diamond
Total
Reportable
Segments
Unallocated
Amounts
Total
Revenue
257,036
918
257,954
—
257,954
Elimination of inter-segment
(470)
—
(470)
—
(470)
Segment revenue
256,566
918
257,484
—
257,484
Cost of sales
Production cost of inventories
(176,728)
(1,229)
(177,957)
—
(177,957)
Depreciation and amortisation
(53,189)
—
(53,189)
—
(53,189)
Total cost of sales
(229,917)
(1,229)
(231,146)
—
(231,146)
Gross margin
26,649
(311)
26,338
—
26,338
Other income
35
18
53
7,479
7,532
Selling and distribution expenses
(1,345)
(291)
(1,636)
(2,073)
(3,709)
General and administration expenses (i)
—
—
—
(10,460)
(10,460)
Other expenses
—
—
—
(2,049)
(2,049)
Operating profit (loss)
25,339
(584)
24,755
(7,103)
17,652
Finance expenses
(8,369)
—
(8,369)
(5,786)
(14,155)
Finance income
2,589
14
2,603
82
2,685
Fair value adjustment on consideration payable
5,764
—
5,764
—
5,764
Foreign exchange gain (loss)
346
(995)
(649)
(215)
(864)
Segment profit (loss) before taxes
25,669
(1,565)
24,104
(13,022)
11,082
Tax expense
(11,758)
—
(11,758)
—
(11,758)
Segment profit (loss) after taxes
13,911
(1,565)
12,346
(13,022)
(676)
Segmented assets as at 31 December 2023
653,769
7,653
661,422
5,563
666,985
Segmented liabilities as at 31 December 2023
354,432
955
355,387
153,366
508,753
Capital expenditures (ii)
11,880
—
11,880
1,629
13,509
(i) $0.6 million in depreciation and amortisation is included in selling and distribution expenses and in general and
administrative expenses.
(ii) Capital expenditures includes PP&E additions and right-of-use assets.
(b) Geographical information:
The geographical information analyses the Group's revenue and non-current assets by the Company's country of
domicile and other countries. Revenues from external customers have been identified on the basis of the
customer's geographical location and non-current assets are allocated based on their physical location.
Revenue
Non-Current assets
31 December 2024 31 December 2023 31 December 2024 31 December 2023
Belgium
188,724
127,198
3,047
3,459
United Arab Emirates
175,534
93,399
—
—
India
45,235
19,635
—
—
Canada
9,505
733
134,830
237,293
Australia
536
193
376
575
Other
22,583
16,326
—
—
Consolidated
442,117
257,484
138,253
241,327
Non-current assets exclude financial instruments such as reclamation deposits, restricted cash and environmental
trust fund.
During the year ended 31 December 2024, $51.7 million (31 December 2023: $37.2 million) or 12% (31 December
2023: 14%) of the Group's revenues depended on a single customer in the Rough Diamond segment.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 38
NOTE 6
REVENUE
Year ended
Period ended
31 December 2024
31 December 2023
Revenue streams:
Rough diamond sales
439,299
256,566
Polished diamond sales
2,818
918
Total revenue
442,117
257,484
All revenues from rough and polished diamonds sales are recognised at a point in time when control transfers to
the customer. See Note 34 (m) for further details.
NOTE 7
EXPENSE BY NATURE
Expenses including cost of sales, selling and distribution expenses, general and administrative expenses,
impairment of assets and other expenses as reported in the consolidated statement of loss, have been grouped
by nature of expenses as follows:
Year ended
Period ended
31 December 2024
31 December 2023
Raw materials, consumables and spare parts
150,413
94,430
Salaries and employee benefits
78,873
44,649
Contractors and engineering services
89,082
45,365
Transaction costs
—
6
Property tax and insurance costs
13,740
7,833
Depreciation and amortisation
52,312
43,897
Exploration costs
9,781
1,884
Selling and distribution expenses
5,565
3,489
Impairment of property, plant and equipment
151,621
—
Impairment of inventory
—
146
Other
9,759
5,665
Total expenses
561,146
247,364
NOTE 8
OTHER INCOME
Other income for the year ended 31 December 2024 consists primarily of the derecognition of the contingent
consideration as the EBITDA threshold was not met.
Year ended
Period ended
31 December 2024
31 December 2023
Derecognition of contingent consideration (Note 21)
7,500
7,401
Other
1,546
131
Total other income
9,046
7,532
NOTE 9
FINANCE EXPENSES
Year ended
Period ended
31 December 2024
31 December 2023
Interest on loans
7,583
3,733
Interest on convertible debt
996
739
Accretion of reclamation provision (Note 25)
6,925
3,433
Accretion of convertible debt (Note 30)
1,437
996
Accretion of contingent consideration (Note 21)
389
238
Interest on lease liabilities (Note 23)
1,711
989
Finance expense on reclamation deposits (Note 13)
1,382
2,553
Interest on taxes payable
4,063
—
Other interest
2,930
1,474
Total finance expenses
27,416
14,155
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 39
NOTE 10
INCOME TAX
Year ended
Period ended
(a) The components of tax expense comprise:
31 December 2024 31 December 2023
Current tax (recovery) expense
Current reporting period
(9,635)
14,951
Assessments and adjustments
(4,010)
—
Total current tax (recovery) expense
(13,645)
14,951
Deferred tax recovery
Origination and reversal of temporary differences
(20,948)
(3,193)
Assessments and adjustments
(1,218)
—
Total deferred tax recovery
(22,166)
(3,193)
Total tax (recovery) expense
(35,811)
11,758
Reconciliation of income tax expense to prima facie tax payable:
Profit (loss) for the period
(133,068)
11,082
Income tax expense (benefit) using the domestic
Corporate tax rate of 30% (2023: 30%)
(40,579)
3,325
Increase in income tax expense due to:
Non-deductible expenses
2,359
690
Mining Royalty Tax in Canada, net of tax benefit
(2,370)
4,692
Timing differences not recognised
4,120
2,643
Current period tax losses
—
937
Effect of different statutory rates in foreign countries
5,777
(620)
Prior year adjustments
(5,227)
—
Other
109
91
Tax expense
(35,811)
11,758
(b) Net deferred tax assets not recognised
Year ended
Period ended
31 December 2024 31 December 2023
Net deferred tax assets not recognised
Tax losses
22,911
8,684
Reclamation Provision
66,972
81,349
Timing differences
11,052
2,546
Total unrecognised net deferred tax assets
100,935
92,579
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 40
(c) Composition of deferred tax balances:
31 December
2023
Recognised in
Statement of
Profit or Loss
Recognised in Other
Comprehensive Loss
31 December
2024
Deferred tax assets
Net operating loss carryforwards
—
71
—
71
Inventory
14,979
(14,871)
—
108
Lease obligations
8,695
(3,899)
—
4,796
Employee Benefit Plans
1,372
(445)
(19)
908
Consideration Payable
9,746
(3,066)
—
6,680
Other deferred income tax assets
6,030
8,499
—
14,529
40,822
(13,711)
(19)
27,092
Reclassification to deferred tax liabilities
(40,822)
13,711
19
(27,092)
Deferred tax assets:
—
—
—
—
Deferred tax liabilities
Property, plant and equipment
(60,892)
48,150
—
(12,742)
Right of use asset
—
(68)
—
(68)
Environmental Trust Pool
—
(14,074)
—
(14,074)
Other deferred income tax liabilities
(2,132)
1,869
—
(263)
(63,024)
35,877
—
(27,147)
Reclassification from deferred tax assets
40,822
(13,711)
(19)
27,092
Deferred tax liabilities:
(22,202)
22,166
(19)
(55)
As at 31 December 2024 the Group had the following tax losses carried forward available to offset against future
profits:
Year of expiry
Canada
Australia
Year 2044
44,929
Indefinitely
4,229
36,923
49,158
36,923
Each period the Group assesses the future taxable income in each jurisdiction which it operates and determines
the nature and amount sufficient to enable the benefit of such deductions to be obtained in the future. As at 31
December 2024, the Group has not recognised the benefit of deductible temporary differences and tax losses
amounting to $287.9 million (31 December 2023: $273.6 million).
Deferred tax liabilities with respect to investments in foreign subsidiaries are not recognised where the Group is
able to control the timing of the reversal and any temporary differences are not expected to reverse in the
foreseeable future. The Group has not recognised a deferred tax liability with respect of $nil (31 December 2023:
$7.7 million) of temporary differences associated with investments in foreign subsidiaries as the Group is able to
control the timing of the reversal and any temporary differences are not expected to reverse in the foreseeable
future.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 41
NOTE 11
EARNINGS PER SHARE
The following table reflects the net loss and share data used in the basic and diluted earnings per share
calculations:
Six month
Year ended
period ended
31 December
2024
31 December
2023
NUMERATOR:
Net loss attributable to ordinary shareholders ($)
(97,257)
(676)
DENOMINATOR:
Number of ordinary shares outstanding at end of the period
1,421,634,421
1,421,205,230
Vested share options exercisable for no consideration
877,408
1,306,599
Effect of share options exercised
(343,087)
(443,332)
Effect of ordinary shares issued on conversion of convertible note
—
(32,083)
Weighted average number of ordinary shares outstanding during the period
used to calculate basic and diluted loss per share
1,422,168,742
1,422,036,414
Basic and diluted loss per share attributable to shareholders (cents)
(6.84)
(0.05)
(i) A total of 31.6 million options were excluded from the dilution calculation for the year ended 31 December 2024 as they
are anti-dilutive. For the year ended 31 December 2024 and period ended 31 December 2023, all potentially dilutive
securities have been excluded from the calculation of diluted earnings per share, given the Group was in a net loss position
during that period and their effect would be anti-dilutive.
There have been no other transactions involving common shares or potential common shares between the
reporting date and the date of completion of these financial statements.
NOTE 12
PROPERTY, PLANT AND EQUIPMENT
Mineral
properties
Equipment
and
leaseholds
Polishing
Equipment
Furniture,
equipment
and other
Land and
building
Assets
under
construction
Right-of-
use assets
Total
COST
Balance at 1 January 2024
7,692
139,497
253
1,237
67,852
19,886
33,899 270,316
Additions (ii) (iii)
5,554
55
—
—
—
115,321
— 120,930
Disposals
—
(1,838)
—
—
—
—
(925)
(2,763)
Transfers from assets under construction
74,291
21,934
—
2,017
249
(102,382)
3,891
—
Foreign exchange differences (i)
(19,459)
—
—
—
—
—
— (19,459)
Balance at 31 December 2024
68,078
159,648
253
3,254
68,101
32,825
36,865 369,024
ACCUMULATED
DEPRECIATION/AMORTISATION AND
IMPAIRMENT LOSSES
Balance at 1 January 2024
42
22,326
96
268
5,606
—
3,460
31,798
Depreciation and amortisation
1,110
33,416
18
392
9,434
—
7,056
51,426
Impairment of property, plant and
equipment
66,926
36,640
—
270
22,399
23,767
1,619 151,621
Disposals
—
(1,232)
—
—
—
—
(183)
(1,415)
Balance at 31 December 2024
68,078
91,150
114
930
37,439
23,767
11,952 233,430
NET BOOK VALUE
At 31 December 2024
—
68,498
139
2,324
30,662
9,058
24,913 135,594
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 42
Mineral
properties
Equipment
and
leaseholds
Polishing
Equipment
Furniture,
equipment
and other
Land and
building
Assets
under
construction
Right-of-use
assets
Total
COST
Balance at 1 July 2023
—
51
253
109
—
—
621
1,034
Acquisition of Arctic Companies (Note 4)
—
126,313
—
615
67,347
22,464
32,296 249,035
Additions (ii) (iii)
6,533
—
—
—
—
12,909
936 20,378
Disposals
—
(22)
—
—
—
—
—
(22)
Transfers from assets under construction
1,268
13,155
—
513
505
(15,487)
46
—
Foreign exchange differences (i)
(109)
—
—
—
—
—
—
(109)
Balance at 31 December 2023
7,692
139,497
253
1,237
67,852
19,886
33,899 270,316
ACCUMULATED
DEPRECIATION/AMORTISATION
Balance at 1 July 2023
—
13
61
58
—
—
184
316
Depreciation and amortisation
42
22,324
35
210
5,606
—
3,276 31,493
Disposals
—
(11)
—
—
—
—
—
(11)
Balance at 31 December 2023
42
22,326
96
268
5,606
—
3,460 31,798
NET BOOK VALUE
At 31 December 2023
7,650
117,171
157
969
62,246
19,886
30,439 238,518
(i) These foreign exchange differences relate to the revaluation of the reclamation provisions.
(ii) Additions include cash additions, right-of-use asset additions, property, plant and equipment (“PP&E”) additions
in payables, changes in estimate of reclamation provision and capitalised depreciation.
(iii) As at 31 December 2024, the estimate for the reclamation provision was increased by $5.6 million (31 December
2023 - $6.5 million increase in estimate of reclamation provision), resulting in a corresponding increase in the
reclamation asset of the same amount.
As at 31 December 2024, the market capitalisation of the Group declined significantly by $110.2 million
representing a 58% decline compared to period ended 31 December 2023. Furthermore, price per carat realised
in the Rough Diamond CGU decreased by 10% compared to period ended 31 December 2023. As a result of these
factors management performed an impairment analysis of the Rough Diamond CGU which resulted in the
following impairment loss that was recognised in the statement of loss during the year ended 31 December 2024:
Year ended
Period ended
31 December 2024
31 December 2023
Impairment of property, plant and equipment
151,621
—
The recoverable amount of the Rough Diamond CGU was $236.0 million based on FVLCD, estimated using
discounted cash flows methodology for cash flows in the life of mine ("LOM") plan over a five year
production period with the unrecognised reclamation outflows extending up until 2048. Residual mineral
resources not reflected in the LOM were valued using market approach in the form of resource multiples.
The fair value measurement was categorized as a Level 3 fair value using a present value technique.
(i) KEY ASSUMPTIONS (ROUGH DIAMOND SEGMENT)
The determination of FVLCD is most sensitive to the following key assumptions:
PRODUCTION VOLUMES AND DIAMOND PRICES
In calculating the FVLCD, the production volumes incorporated into the cash flow model are based on detailed
life of mine plans and take into account development plans for the mines agreed by management. Production
volumes are dependent on a number of variables, such as the recoverable quantities, operational and capital
expenditure requirements and selling prices of diamonds recovered. These production volumes are
consistent with the reserves and resource volumes approved as part of the Group’s process for the estimation
of proven and probable reserves and resource estimates. Diamond price forecasts are based on management’s
estimates based on market outlook and past experience. Diamond price escalation of 3% in 2025, 9% in 2026
and 3% each year from 2027 till 2029 was factored in the LOM.
Mineral resources
Mineral resources that include inferred and indicated resources that were not reflected in the LOM plan
were valued using a resource multiple ranging from 0.35 to 0.69.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 43
DISCOUNT RATE
In calculating the FVLCD, a post-tax discount rate of 14.5% was applied to the cash flows. The discount rate is
derived from the Group’s post-tax weighted average cost of capital (“WACC”) with appropriate adjustments made
to reflect the risks specific to the CGU. The WACC takes into account both the debt and equity.
OPERATING COSTS
Significant amount of the mining operating costs are incurred in Canadian Dollar, which are developed based on
expected mining activity in the LOM. As the Group’s functional currency is the US dollar the Group is exposed to
foreign exchange rate movements arising from operating costs that are primarily in Canadian dollars. The foreign
exchange rates are estimated with reference to external market forecasts and updated at least annually. The rates
applied in the valuation are based on observable market data including spot and forward values. A Canadian to
US dollar exchange rate in the range of $0.73 to $0.75 was used in the cash flow analysis.
(ii) SENSITIVITIES
ROUGH DIAMOND SEGMENT
Holding all other assumptions constant, reasonable possible changes at the reporting date to one of the significant
assumptions would have the following impact:
Impairment reversal (additional impairment)
Changes in assumption
Increase in assumption
Decrease in assumption
31 December 2024
Diamond prices
1%
11,267
(10,311)
Carats recovered
1%
10,019
(10,019)
Discount rate
1%
(5,886)
6,175
Operating costs
1%
(8,062)
8,062
NOTE 13
OTHER NON-CURRENT ASSETS
The Group is required to post security with government agencies to ensure reclamation is completed on its mining
properties as required by the legislation and regulations of Canada and the Northwest Territories. The security is
in the form of cash, letters of credit (“LCs”) or surety bond.
31 December 2024
31 December 2023
Sample diamonds
2,378
2,378
Restricted cash (a)
7,793
10,564
Reclamation deposits (b)
82,069
61,568
- Collateral posted for reclamation surety bonds
13,037
44,575
- Reclamation security deposits
16,065
16,993
- Collateral posted in environmental trust funds
52,967
—
Other
281
431
Total other non-current assets
92,521
74,941
Restricted
Reclamation Deposits
Total
Cash
Cash
Collateral
for Surety
Reclamation
Security
Cash Deposits under
Environmental Trust
Funds
Balance at 1 January 2024
10,564
44,575
16,993
— 72,132
Reclamation deposits made
3,053
—
—
26,935 29,988
Refund/transfer received
(5,444)
(31,735)
—
31,735 (5,444)
Interest income on restricted cash
640
—
—
—
640
Finance expense
—
3,743
438
(5,563) (1,382)
Foreign exchange revaluation
(1,020)
(3,546)
(1,366)
(140) (6,072)
Balance as at 31 December 2024
7,793
13,037
16,065
52,967 89,862
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 44
Restricted
Reclamation Deposits
Total
Cash
Cash Collateral
for Surety
Reclamation
Security
Balance at 1 July 2023
—
—
—
—
Acquisition of Arctic companies (Note 4)
10,644
33,189
2,689
46,522
Reclamation deposits made
—
11,943
15,899
27,842
Refund received
(153)
—
—
(153)
Interest income on restricted cash
61
—
—
61
Finance expense
—
(803)
(1,750)
(2,553)
Foreign exchange revaluation
12
246
155
413
Balance as at 31 December 2023
10,564
44,575
16,993
72,132
(a) Restricted cash
Restricted cash comprised of CDN$9.9 million held by financial institutions as collateral for LCs. These LCs were
held by government agencies as security for reclamation obligations.
(b) Reclamation deposits
Collateral posted for reclamation surety bonds
The Group has an agreement with surety providers whereby the Group provides cash collateral over time up to
100% of the face amount of the bond; and the bond value will be reduced by the payment. During 2024, total
contribution of CDN$84.2 million were made to the environmental trust and surety bond value was reduced
accordingly. The contribution includes CDN$45.6 million transferred from collateral for surety, CDN$29.0 million
of cash collateral under new surety bond agreement signed in August 2024 and CDN$9.6 million pursuant to the
security requirements for Phase Two development for Point Lake Water Licence.
NOTE 14
INVENTORY AND SUPPLIES
31 December 2024
31 December 2023
Stockpile ore
925
1,811
Rough diamonds – work in progress
28,432
61,058
Rough diamonds – finished goods
26,874
40,718
Polished diamonds – finished goods
5,361
4,942
Supplies inventory
124,457
136,402
Total inventory and supplies
186,049
244,931
For the year ended 31 December 2024, inventories recognised in cost of sales were $370.6 million (31 December
2023: $231.1 million, including a $9.9 million increase in fair value recorded on the acquisition date which was
later recognised in the cost of sales when the goods were sold).
During the year ended 31 December 2024, there were $nil (period ended 31 December 2023: $nil) diamond
inventory write-downs in the Rough Diamond and $nil (period ended 31 December 2023: $0.1 million) in Polished
Diamond segments.
NOTE 15
TRADE AND OTHER RECEIVABLES
31 December 2024 31 December 2023
Trade receivables
913
130
Sales & income tax credits
2,842
8,545
Other deposits and receivables
2,423
1,232
Total trade and other receivables
6,178
9,907
The Group has recognised a loss of $nil (period ended 31 December 2023: $nil) in profit or loss in respect of the
expected credit losses for the period ended 31 December 2024. The Group’s exposure to credit risk is disclosed in
Note 27. Total trade receivables are collectable within the next 12 months.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 45
NOTE 16
CASH AND CASH EQUIVALENTS
31 December 2024
31 December 2023
Cash at bank and in hand
25,142
94,426
Total cash and cash equivalents
25,142
94,426
NOTE 17
CONTRIBUTED EQUITY
(a) Ordinary Shares
Ordinary share capital is classified as equity. The issued shares do not have a par value and there is no limit on
the authorised share capital of the Company.
31 December 2024
31 December 2023
No.
$
No.
$
Ordinary shares
1,421,634,421
200,607
1,421,205,230
200,607
(b) Movements in Ordinary Shares Issued
Year ended 31 December 2024
Number
$
At 1 January 2024
1,421,205,230
200,607
Exercise of options (Note 29 b)
429,191
—
Balance at 31 December 2024 - fully paid
1,421,634,421
200,607
Period ended 31 December 2023
Number
$
At 1 July 2023
1,137,210,661
153,511
Issue of Shares - Consideration (i)
278,829,226
46,725
Exercise of options
725,949
—
Exercise of options
4,250,000
338
Exercise of convertible note
189,394
33
Balance at 31 December 2023 - fully paid
1,421,205,230
200,607
(i) These shares were issued to Arctic Shareholder and 2L Loan holders as consideration in the acquisition of ACDC. See Note
4.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 46
NOTE 18
RESERVES
31 December 2024 31 December 2023
Convertible note reserve
4,384
4,384
Share-based payments reserve
4,000
2,970
Revaluation Reserve
(469)
(505)
Foreign currency translation reserve
(53)
(53)
Total reserves
7,862
6,796
Movement reconciliation
Convertible Note Reserve
Balance at the beginning of the period
4,384
4,384
Balance at the end of the period
4,384
4,384
Share Based Payment Reserve
Balance at the beginning of the period
2,970
2,993
Equity settled share-based payment transactions (Note 29)
1,030
(23)
Balance at the end of the period
4,000
2,970
Revaluation Reserve
Balance at the beginning of the period
(505)
—
Re-measurement of defined benefit obligation
36
(505)
Balance at the end of the period
(469)
(505)
Foreign Currency Translation Reserve
Balance at the beginning of the period
(53)
(53)
Balance at the end of the period
(53)
(53)
Convertible notes reserve
The amount shown for other equity securities is the value of the conversion rights relating to the 6% convertible
notes, details of which are shown in Note 19.
Share-based payment reserve
The share-based payment reserve is used to record the value of share-based payments provided to outside
parties, and share-based remuneration provided to employees and directors.
Revaluation reserve
The revaluation reserve is used to record the re-measurement of defined benefit obligation net of tax expenses.
Foreign currency translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations where their functional currency is different to the presentation currency of the
reporting entity.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 47
NOTE 19
LOANS AND BORROWINGS
31 December 2024 31 December 2023
Currency Year of
Maturity
Nominal
Interest rate
Face
value
Carrying
amount
Face
value
Carrying
amount
2nd Lien Credit Agreement (“2L Loan”) (a)
US$
2026
10%
73,834
73,834
73,834
73,834
Convertible Notes (“Notes”) (b)
A$
2024
6%
—
—
23,785
22,304
Promissory note payable to Arctic Shareholder (c)
US$
—
—
0
0
Total loans and borrowings
73,834
73,834
97,619
96,138
Less current portion
—
22,304
Non-current portion
73,834
73,834
(a) 2L Loan
The 2L Loan in principal amount of $73.8 million has a maturity date of 30 June 2026. The loan bears an interest
rate of 10% per annum payable in arrears on the last day of each quarter. During the year interest of $7.6 million
was paid on the 2L Loan (period ended 31 December 2023: $3.7 million).
There are no financial covenants under the 2L Loan agreement. The remaining non-financial covenants under the
2L Loan agreement that are applicable as at 31 December 2024, mainly relate to submission of financial
information by certain dues dates. All assets of Arctic Companies are pledged under the 2L Loan. Under the 2L
Loan agreement, intercompany loans between the Arctic Companies and the parent entity must be unsecured
loan, subordinated to the 2L Loan with maturity date after 30 June 2026. On 1 July 2023, 2L Loan holders were
granted 149.6 million shares of Burgundy at A$0.25 amounting to $25.1 million (A$37.4 million) and as such also
own an equity stake in the Company.
As at 31 December 2024, the Group was in compliance with the required non-financial covenants.
(b) Convertible Notes
The Company issued 35,000,000 6% convertible notes for A$35,000,000 on 16 September 2021. The notes are
convertible into ordinary shares of the Company, at the option of the holder, or repayable on 16 September 2024.
If a note holder elects to convert all or part of its convertible notes, the minimum number of notes that may be
converted is 250,000. The number of shares that will be issued on conversion is equivalent to the principal amount
of notes converted divided by the fixed conversion price of A$0.264 per share. The conversion option of the
convertible notes was classified in other reserves in equity as the fixed for fixed criteria under IAS 32 was met on
the date the notes were issued. Upon change in functional currency of the Company on 1 July 2023 from A$ to
US$, the Company did not reclassify the equity portion of notes. See Note 34(p) for further details. During
September 2024, all outstanding convertible notes were settled in cash.
31 December 2024 31 December 2023
Face value of notes issued
23,300
23,300
Other equity securities - value of conversion rights
(4,384)
(4,384)
Costs associated with the issue of convertible notes
(819)
(819)
18,097
18,097
Unwinding of interest per effective interest rate method
5,183
3,745
Exercise of convertible note
(33)
(33)
Payout of convertible note
(23,247)
—
Foreign exchange revaluation
—
495
Current liability
—
22,304
Interest paid to note holders during the year was $1.0 million (31 December 2023: $0.7 million).
(c) Promissory note payable to Arctic Shareholder
On 1 July 2023 the Company had a payable of $100 to Arctic Shareholder as consideration to acquire ACDM. The
note was paid out during the year.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 48
NOTE 20
PROVISIONS
31 December 2024
31 December 2023
Lease make good
65
64
Total provisions
65
64
The provision represents the estimated costs to make good the premises leased by the Group at the end of the
respective lease term. A provision has been recognised for the present value of the estimated expenditure
required to make good any leasehold improvements. These costs have been capitalised as part of the cost of
leasehold improvements and are amortised over the shorter of the term of the lease and the useful life of the
assets.
NOTE 21
CONTINGENT CONSIDERATION
Contingent consideration was recognised at fair value on 1 July 2023, and is calculated as the present value of two
earn-out payments of total $15.0 million to the Arctic Shareholder in the first quarter of 2024 ($7.5 million) and
2025 ($7.5 million), subject to the reported EBITDA of the Arctic Companies for the respective 2023 and 2024
calendar years being equal to or exceeding $200.0 million in each year. If the conditions are met, the earn-out
payments are payable in cash within thirty days of end of first quarter following end of 2023 and 2024 calendar
years.
The fair value of contingent consideration is remeasured at each reporting period with changes in fair value
recognised in profit or loss. The fair value of contingent consideration was measured using a discounted risk-free
rate of 4.0% adopted based on the 5-year treasury bill as at 1 July 2023.
As at 31 December 2024, present value of $7.5 million for 2024 earn-out cash payment was derecognised as other
income (Note 8) as the reported 2024 EBITDA of Arctic Companies was below $200.0 million. During the year
ended 31 December 2024, $0.4 million of present value adjustment was recorded as finance expense.
A reconciliation of the carrying amount of contingent consideration is set out below:
Earn-out Payment 2
Balance at 1 January 2024
7,111
Accretion
389
Derecognition of Earn-out Payment 2
(7,500)
Balance at 31 December 2024
—
Non-current portion
—
Earn-out Payment 1 Earn-out Payment 2
Total
Balance at 1 July 2023
7,304
6,970
14,274
Accretion
97
141
238
Derecognition of Earn-out Payment 1
(7,401)
—
(7,401)
Balance at 31 December 2023
—
7,111
7,111
Non-current portion
—
7,111
7,111
NOTE 22
CONSIDERATION PAYABLE
31 December 2024
31 December 2023
Opening balance
36,779
—
Acquisition of Arctic Companies (Note 4)
—
47,282
Royalties paid
(10,896)
(4,739)
Changes in fair value
(676)
(5,764)
Ending balance
25,207
36,779
Less current portion
6,280
10,844
Non-current portion
18,927
25,935
Consideration payable relates to a royalty agreement entered into on the acquisition of the non-controlling
interest in Core Zone which has been recognised as consideration. Consideration payable is calculated as the
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 49
present value of future royalty distributions that are expected as diamonds are produced from Core Zone. These
royalty distributions are calculated by multiplying a specific royalty percentage agreed upon with the minority
partner; with the value of diamonds produced from Core Zone and are payable in cash within thirty days of end
of each quarter.
The fair value of consideration payable is remeasured at each reporting period with any changes in fair value
recognised in profit or loss. The fair value of consideration payable was measured using a discounted cash flow
valuation model that considered the present value of future royalty distributions discounted using a discount rate
of 20.5% (31 December 2023: 12%). During the year ended 31 December 2024, $10.9 million (period ended 31
December 2023: $4.7 million) was paid in cash.
NOTE 23
LEASE LIABILITIES
Property, plant and equipment comprises both owned and leased assets. The Group leases many assets including
land and buildings, vehicles and machinery. Leases for which the Group is a lessee are presented below.
Right-of-use assets
Mineral
properties
Equipment and
leaseholds Land and buildings
Total
Balance at 1 January 2024
559
22,698
7,182
30,439
Additions/modifications for the year
—
3,136
(3,136 )
—
Disposals for the year
—
—
(742 )
(742 )
Transfers from assets under construction
—
—
3,891
3,891
Depreciation charge for the year
(164 )
(4,088 )
(2,804 )
(7,056 )
Impairment
—
(1,421 )
(198 )
(1,619 )
Balance at 31 December 2024
395
20,325
4,193
24,913
Right-of-use assets
Mineral
properties
Equipment and
leaseholds
Land and
buildings
Total
Balance at 1 July 2023
—
—
437
437
Acquisition of Arctic Companies (Note 4)
641
24,555
7,100
32,296
Additions/modifications for the period
—
(100)
1,036
936
Transfers from assets under construction
—
—
46
46
Depreciation charge for the period
(82)
(1,757)
(1,437)
(3,276)
Balance at 31 December 2023
559
22,698
7,182
30,439
Lease liabilities
Maturity analysis — contractual undiscounted cash flows
31 December 2024
Less than one year
10,347
Two to five years
7,838
More than five years
410
Total undiscounted lease liability as at 31 December 2024
18,595
Finance expense
(1,529)
Lease liabilities included in the statement of financial position at 31 December 2024
17,066
Current
9,463
Non-current
7,603
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 50
Lease liabilities
Maturity analysis — contractual undiscounted cash flows
31 December 2023
Less than one year
11,245
Two to five years
17,845
More than five years
144
Total undiscounted lease liability as at 31 December 2023
29,234
Finance expense
(3,122)
Lease liabilities included in the statement of financial position at 31 December 2023
26,112
Current
9,644
Non-current
16,468
Amounts recognised in profit or loss
31 December 2024 31 December 2023
Depreciation of right-of-use assets
7,056
3,276
Interest on lease liabilities
1,711
989
Amounts recognised in the statement of cashflows
Total cash outflows for leases
10,025
4,116
NOTE 24
EMPLOYEE BENEFITS
The employee benefit obligation reflected in the consolidated balance sheet is as follows:
31 December 2024 31 December 2023
Defined benefit plan obligation (a)
3,177
3,627
Defined contribution plan and other post-retirement plan obligation (b)
544
356
RSU and DSU Plans (b) (c)
1,848
199
Total employee benefit plan obligation
5,569
4,182
Less current portion
2,003
354
Non-current portion
3,566
3,828
(a) Defined benefit pension plan
The Group contributes to defined benefit plans in Canada. Pension benefits are based on the length of service and
highest average covered earnings. The plans are governed by the Retirement Advisory Committee. The defined
benefit plans expose the Group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market
investment risk.
(i) NET BENEFIT OBLIGATION
Funded Status
31 December 2024
31 December 2023
Accrued benefit obligation
54,585
60,763
Plan assets
51,408
57,136
Funded status - plan deficit
3,177
3,627
As at the last valuation date, on 31 December 2024, the present value of the defined benefit obligation comprised
approximately $42.3 million relating to active employees, $5.3 million relating to deferred members and $7.0
million relating to retired members.
Defined Benefit Obligations
31 December 2024
31 December 2023
Opening balance
60,763
59,176
Service cost
1,874
915
Interest expense
2,613
1,385
Benefit payments
(6,220)
(1,926)
Remeasurements
404
1,110
Effect of changes in foreign exchange rates
(4,849)
103
Ending balance
54,585
60,763
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 51
(ii) PLAN ASSETS
Plan Assets
31 December 2024
31 December 2023
Opening balance
57,136
56,329
Interest income
2,497
1,409
Total employer contributions
2,073
906
Benefit payments
(6,220)
(1,926)
Administrative expenses paid from plan assets
(34)
(17)
Return on plan assets, excluding imputed interest income
516
361
Effect of changes in foreign exchange rates
(4,560)
74
Ending balance
51,408
57,136
The asset allocation of pension assets at 31 December 2024 and 2023 was as follows:
Asset Category
31 December 2024
31 December 2023
Cash equivalents
1%
1%
Equity securities
25%
23%
Fixed income securities
64%
65%
Real Estate
10%
11%
Total
100%
100%
(iii) THE SIGNIFICANT ASSUMPTIONS USED FOR THE PLAN ARE AS FOLLOWS:
Actuarial assumptions
31 December 2024
31 December 2023
ACCRUED BENEFIT OBLIGATION
Discount rate
4.50%
5.00%
Rate of salary increase
2.75%
2.75%
Rate of price inflation
2.00%
2.00%
Mortality table
CPM2014Priv with CPM-B
Improvement
CPM2014Priv with CPM-B
Improvement
BENEFIT COSTS
Discount rate
4.60%
5.20%
Expected rate of salary increase
2.75%
2.75%
Rate of compensation increase
2.75%
2.75%
Changes in
Decrease in
Increase in
Sensitivity Analysis - Defined Benefit Obligation
assumption
assumption
assumption
Discount rate
0.50%
56,830
52,536
Salary growth rate
0.25%
54,284
54,890
Mortality table
1 year
55,137
54,018
The above sensitivity analysis illustrates the present value of defined benefit obligation and is based on a change
in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in
some of the assumptions may be correlated.
(iv) FUNDING POLICY
The Group funds the plans in accordance with the requirements of the Canadian Pension Benefits Standards Act,
1985 and the Pension Benefits Standards Regulations and the actuarial professional standards with respect to
funding such plans. Funding deficits are amortised as permitted under the Regulations. In the Group’s view, this
level of funding is adequate to meet current and future funding needs in light of projected economic and
demographic conditions. The Group may in its absolute discretion fund in excess of the legislated minimum from
time to time, but no more than the maximum contribution permitted under the Canada’s Income Tax Act. The
expected contribution to the plan for the next fiscal year is $2.0 million.
Total
Defined benefit schedule for disbursements within 1 year
4,395
Defined benefit schedule for disbursements within 2-5 years
37,572
Defined benefit schedule for disbursements after five or more years
8,951
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 52
(b) Defined contribution plan
During the year ended 31 December 2024, the Group recognised $5.0 million expenses (31 December 2023 - 4.6
million). As at 31 December 2024, the defined contribution plan liability was $0.4 million (31 December 2023 -
$0.2 million).
(c) Restricted Share Unit (“RSU”) and Deferred Share Unit (“DSU”) Plans - cash settled
Grants under the RSU plans are on a discretionary basis to employees of the Group subject to Board of Directors’
approval. Grants of RSU under the RSU Plan vest annually on the anniversary of the original grant date over the
specified vesting period. The Group shall pay out cash on the respective vesting dates of RSUs equivalent to the
number of RSUs vested at the fair market value of the RSUs. Fair market value is determined as the volume
weighted average trading price (“VWAP”) of the Common Shares on the Australian Stock Exchange for the five
trading days immediately preceding the redemption date.
Grants under the DSU plans are on a discretionary basis to employees of the Group and its subsidiaries subject to
Board of Directors’ approval. Grants of DSU under the DSU Plan vest annually on the anniversary of the original
grant date over the specified vesting period. Vested DSU grants are only exercisable on departure of the employee
(e.g. retirement, resignation, death). The Group shall pay out cash on the respective vesting dates of DSUs
equivalent to the number of DSUs vested at the fair market value of the DSUs. Fair market value is determined as
the VWAP of the Common Shares on the Australian Stock Exchange for the five trading days immediately
preceding the redemption date.
The expenses related to RSUs and DSUs are accrued based on fair value, determined as at the date of grant. This
expense is recognised as compensation expense over the vesting period. Until the liability is settled, the fair value
of the RSUs and DSUs is remeasured at the end of each reporting period and at the date of settlement, with
changes in fair value recognised as share-based compensation expense or recovery over the vesting period.
RSU and DSU Plans
Number of units
RSU
31 December 2024 31 December 2023
Opening balance
6,032,568
—
Awards and payouts during the year
RSU awards
6,180,497
6,032,568
Ending balance
12,213,065
6,032,568
Number of units
DSU
31 December 2024 31 December 2023
Opening balance
36,195,408
—
Awards and payouts during the year
DSU awards
7,350,707
36,195,408
Ending balance
43,546,115
36,195,408
The Group recognised an expense of $1.7 million for the year ended 31 December 2024 (period ended 31
December 2023: $0.1 million) in respect of the RSU and DSU plans. The total carrying amount of liabilities for RSU
and DSU arrangements as at 31 December 2024 is $1.8 million (31 December 2023: $0.1 million).
NOTE 25
RECLAMATION PROVISIONS
As at 31 December 2024, the estimated total undiscounted amount of the future cash flows required to settle the
reclamation obligation is estimated to be CDN$397.4 million (31 December 2023: CDN$376.9 million). These
obligations will be settled between 2026 to 2042. This amount has been discounted using risk-free rate of 3.33%
and an inflation rate of 1.82% was applied.
Reclamation provisions are related to future environmental remediation and site restoration of mining site.
Because of the long-term nature of the liability, the greatest uncertainty in estimating the provision is the costs
that will be incurred and the timing of these cash outflows. The expected timing of expenditures can also change
for other reasons, for example because of changes to expectations relating to Ore Reserves and Mineral
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 53
Resources, production rates, renewal of operation licences, economic conditions and regulatory assessment of
reclamation expenditures. The revision of previous estimates is based on revised expectations of reclamation
activity costs, changes in estimated reclamation timelines and fluctuations in foreign exchange rates. A
reconciliation of the carrying amount of asset retirement obligations is set out below:
31 December 2024
31 December 2023
Opening balance
236,204
—
Acquisition of Arctic Companies (Note 4)
—
226,302
Revisions of previous estimates
5,554
6,578
Accretion of provision
6,925
3,433
Foreign exchange revaluation
(19,459)
(109)
Ending balance
229,224
236,204
Non-current portion
229,224
236,204
As at 31 December 2024, the Group had restricted cash of $7.8 million (31 December 2023: $10.6 million) at banks,
reclamation deposits of $29.1 million (31 December 2023: $61.6 million) with government agencies as cash
collateral for reclamation obligations and environment trust fund of $53.0 million (31 December 2023: $nil) with
a trustee (see Note 13).
NOTE 26
TRADE AND OTHER PAYABLES
31 December 2024
31 December 2023
Trade and other payables
17,094
19,120
Accrued expenses
31,326
34,848
Interest payable on loans
—
49
Total trade and other payables
48,420
54,017
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 54
NOTE 27
FINANCIAL RISK MANAGEMENT
a) Financial Instruments
The fair values of financial assets and liabilities, together with the carrying amounts shown in the consolidated
statement of financial position are as follows:
31 December 2024
31 December 2023
Fair value
Carrying
value
Fair value
Carrying
value
Financial assets at amortised cost
Cash and cash equivalents (i)
25,142
25,142
94,426
94,426
Trade and other receivables (i), (ii)
3,336
3,336
1,362
1,362
Restricted cash (i)
7,793
7,793
10,564
10,564
Financial assets at fair value
Reclamation deposits
82,069
82,069
61,568
61,568
Total financial assets
118,340
118,340
167,920
167,920
Total current
28,478
28,478
95,788
95,788
Total non-current
89,862
89,862
72,132
72,132
Financial liabilities at amortised cost
Trade and other payables (i)
48,420
48,420
54,017
54,017
Convertible notes
—
—
23,785
22,304
Loans and borrowings – 2L Loan
73,834
73,834
73,834
73,834
Financial liabilities at fair value
Contingent consideration
—
—
7,111
7,111
Consideration payable
25,207
25,207
36,779
36,779
Total financial liabilities
147,461
147,461
195,526
194,045
Total current
54,700
54,700
77,802
87,165
Total non-current
92,761
92,761
117,724
106,880
(i) The fair value of these financial instruments approximates their carrying value due to the short term to maturity.
(ii) Excludes sales tax credits receivable (see Note 15).
All financial assets and liabilities measured at amortised cost are classified as Level 2 measurements.
(i) Measurement of fair value
Reclamation deposits
Reclamation deposits is classified as Level 2 fair value measurement. The fair value of reclamation deposits was
discounted by applying respective Government of Canada Benchmark Bond yields rate to respective deposits
dependent on its year of maturity when the deposits are released for reclamation recovery.
Loans and borrowing
The 2L Loan is classified as Level 2 fair value measurement. The loan approximated its carrying value at the
acquisition date on 1 July 2023 and there were no substantive changes in the Group’s credit risk since the
acquisition to 31 December 2024.
As at 31 December 2024, fair value of 2L Loan was calculated with a net present value model using discount rates
from the valuation report.
Convertible notes
The convertible notes are classified as Level 2 fair value measurement. The convertible notes were settled in
September 2024.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 55
Contingent consideration
Contingent consideration is classified as Level 3 fair value measurement. The fair value of contingent consideration
was determined by using the payment distribution defined in SPA and was calculated using a pre-tax discount rate
of 4%.
Consideration payable
Consideration payable is classified as Level 3 fair value measurement. The fair value of consideration payable was
determined by using the discounted cash flow model in which the present value of future royalty distributions
was calculated using a pre-tax discount rate of 20.5%.
The future cashflows of consideration payable may be different from the amounts presented in the table above
as discount rates, diamond pricing or other relevant conditions underlying the consideration change.
(ii) Sensitivity analysis
For the fair value of consideration payable, reasonably possible changes at the reporting date to one of the
significant unobservable inputs, holding other inputs constant, would have the following effects:
Profit or loss
Consideration Payable
Increase
Decrease
31 December 2024
Expected cash flows (10% movement)
(2,324)
2,324
Discount rate (1% movement)
465
(465)
During the year ended 31 December 2024 and period ended 31 December 2023, there were no transfers between
Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurement.
For a reconciliation of the fair value measurements within Level 3, refer to the fair value movements in Notes 21
and 22 in these financial statements.
b) Risk Management Overview
The Group has exposure to the following risks arising from financial instruments:
• Market risk: foreign currency
• Financial risk: credit and liquidity risk
Risk Management framework
The Company's board of directors has overall responsibility for the establishment and oversight of the Group's
risk management framework. The board of directors has established the risk management committee, which is
responsible for developing and monitoring the Group's risk management policies. The Committee reports
regularly to the board of directors on its activities.
The Group's risk management policies are established to identify and analyse the risk faced by the Group, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group,
through its training and management standards and procedures, aims to maintain a disciplined and constructive
environment in which all employees understand their roles and obligations.
The Group audit committee oversees how management monitors compliance with the Group's risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced
by the Group. The Group audit committee is assisted in its oversight role by third-party consultant. The consultant
undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which
are reported to the audit committee.
(i) Currency risk management
The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the
currencies in which sales, purchases, receivables and borrowings are denominated and the respective functional
currencies of the Group. The functional currency of the Group is the US dollar. Purchases are primarily
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 56
denominated in Canadian dollars, sales and loans are primarily denominated in US dollars and convertible notes
are denominated in Australian dollars.
Based on the Group’s net exposure to Canadian and Australian dollar monetary assets and liabilities as at 31
December 2024, a one-cent change in the exchange rate would have impacted pre-tax loss for the year by $0.1
million (31 December 2023 - $0.1 million) for Canadian Dollar denominated monetary assets and liabilities, and
respectively by $nil (31 December 2023 - $0.2 million) for Australian dollar denominated monetary assets and
liabilities.
The current risk management policy is to monitor the foreign exchange rate and purchase at spot rate before the
settlement of liabilities. The Group limits its foreign currency risk by limiting funds held in overseas bank accounts
and paying its creditors promptly.
(ii) Credit risk management
Credit risk is the risk of a financial loss to the Group if a customer or counterparty in a transaction fails to meet its
contractual obligation. The Group adopts a sales policy which requires receipt of cash prior to the delivery of rough
diamonds to its majority of customers and an investing policy to invest with major financial institutions. In
contrast, the Group employs credit policies to its customers on polished diamond sales by monitoring exposure
to credit risk on an ongoing basis. As a result, the Group’s exposure to credit risk arising from diamond sales is
minimal.
The Group’s cash, restricted cash and reclamation deposits are deemed low risk as it’s invested in short-dated
money market securities and bank accounts held at investment grade financial institutions. The financial
institutions are medium credit quality or higher operating in low-geopolitical risk jurisdictions, including Canada,
Belgium and Australia. As at 31 December 2024, the Group’s maximum counterparty credit exposure consists of
the carrying amount of cash, restricted cash, accounts receivable and reclamation deposits.
(iii) Liquidity and capital risk management
The Group’s capital includes cash, current and non-current borrowings and contributed equity. Liquidity risk is the
risk that the Group will not be able to meet its financial obligations as they fall due. Liquidity risk also includes the
risk of not being able to liquidate assets in a timely manner at a reasonable price. The Group manages its liquidity
by ensuring that there is sufficient capital to meet short-term and long-term business requirements, after taking
into account cash flows from operations, the Group’s holdings of cash and cash equivalents, debt and equity
offering and equipment financing or leasing arrangement. The Group also strives to maintain sufficient financial
liquidity at all times in order to participate in investment opportunities as they arise, as well as to withstand
sudden adverse changes in economic circumstances. The Group’s capital includes cash, non-current borrowings
and contributed equity.
Management applies judgement when forecasting cash flows for its current and subsequent fiscal years to predict
future financing requirements by managing sales, monitoring operating and capital expenditures, and obtaining
alternative financing arrangement for short term cash needs. The Board of Directors constantly monitor the state
of equity markets in conjunction with the Group’s current and future funding requirements, with a view to
initiating appropriate capital raisings as required. Any surplus funds are invested with major financial institutions.
See Note 2 (b) for further details on the going concern assumption.
The following table summarises the aggregate amount of expected remaining gross contractual undiscounted cash
flow requirements for the Group’s financial liabilities based on repayment or maturity periods.
Contractual cash flows
Carrying
amount
Less than
1 year
Year
2-3
Year
4-5
After
5 years
Trade and other payables
48,420
(48,420)
—
—
—
Lease liabilities
18,595
(10,347)
(7,619)
(219)
(410)
Consideration payable
39,392
(6,280)
(14,971)
(15,868)
(2,273)
2L Loan (i)
85,032
(7,486)
(77,546)
—
—
(i) The contractual cashflow of 2L Loan includes coupon interest.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 57
The future cash flows of consideration payable may be different from the amounts in the table above as diamond
production, pricing or other relevant conditions underlying the consideration payable change.
Capital risk management
The Group’s objectives when managing capital are to:
• Safeguard their ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders; and
• Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the number of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Given the stage of the Group’s development, there are no formal targets set for return on capital. There were no
changes to the Group’s approach to capital management during the year. The Group is not subject to externally
imposed capital requirements. The net equity of the Group is equivalent to capital. Net capital is obtained through
capital raisings on the Australian Securities Exchange (“ASX”).
NOTE 28
RELATED PARTY DISCLOSURE
a) Investment in controlled entities
Name
Country of
Percentage Owned
Incorporation
31 December 2024
31 December 2023
Arctic Canadian Diamond Company Ltd.
Canada
100%
100%
Arctic Canadian Diamond Marketing N.V.
Belgium
100%
100%
BDM Del Peru S.A.C.
Peru
100%
100%
Burgundy Diamonds (Canada) Limited
Canada
100%
100%
Burgundy Diamonds SARL (i)
France
100%
100%
Burgundy Diamonds LLC (ii)
United States
—
100%
Naujaat Project
Canada
40%
40%
(i) Under dissolution.
(ii) Filed certificate of cancellation on 1 December 2023.
b) Key management personnel compensation
The aggregate compensation made to directors and other key management personnel ("KMP") of the Group is set
out below:
Year ended
Period ended
31 December 2024
31 December 2023
Short-term benefits
1,959
884
Post-employment benefits
322
121
Share-based payments
1,521
309
Total KMP Compensation
3,802
1,314
c) Transactions with related parties
During the year ended 31 December 2024, there were intercompany sales from the Company to ACDC of $1.2
million and intercompany sales of $1.0 million from ACDC to the Company (period ended 31 December 2023: $0.5
million intercompany sale from ACDM to the Company).
The Company also had purchases of $0.4 million from and sales of $0.2 million to a company managed by a director
of the Group for the year ended 31 December 2024. Furthermore, the Arctic Companies had sales of $5.7 million
to companies managed by a director of the Group.
As at 31 December 2024, the Group had $129,046 of directors fees payable (31 December 2023: $19,684) and
$382,236 in bonuses payable to KMP (31 December 2023: $303,936).
During the year ended December 31, 2024 - $0.1 million of interest on convertible notes was paid to KMP (period
ended 31 December 2023: $0.1 million). During September 2024, the Company paid $5.0 million to cash settle the
convertible notes that were issued to KMP.
There were no other transactions with KMP during the year ended 31 December 2024.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 58
NOTE 29
SHARE-BASED PAYMENTS
a) Recognised share-based payment transactions
(rounded to the nearest US dollar)
Year ended
Period ended
31 December 2024
31 December 2023
Options issued to employees (i)
1,007,719
84,104
Total share-based payments expense
1,007,719
84,104
(i) $1,007,719 is recorded in other reserves.
Share-based payments expense for the year ended 31 December 2024 is $1,007,719 (31 December 2023:
$84,104).
b) Summary of options
31 December 2024
Options
Grant Date Date of
Expiry
Exercise
Price (A$)
Balance at the
start of the
period
Granted
during the
period
Exercised
during the
period
Expired
during the
period
Balance at
the end of
the period
Lead Managers
23-09-21 22-09-24
$0.36
10,000,000
—
— (10,000,000)
—
Employees
02-08-22 30-08-27
$nil
1,306,599
—
(429,191)
—
877,408
Consultant
02-08-22 05-08-26
$0.26
1,000,000
—
—
—
1,000,000
Employee - CEO
21-11-23 01-07-26
$0.30
10,000,000
—
—
— 10,000,000
Employees - CEO &
other employees
01-12-23 30-11-28
$0.18
12,065,136
—
—
— 12,065,136
Employees - CEO &
other employees
01-04-24 31-03-29
$0.21
— 12,360,994
—
— 12,360,994
34,371,735 12,360,994
(429,191) (10,000,000) 36,303,538
On 1 April 2024, the Company issued 12,360,994 unlisted options with an exercise price of A$0.21 to employees
of the Group in accordance with the Company's Option Plan. The fair value of the options were measured using
the Black-Scholes valuation Model. As at 31 December 2024 an expense of $548,575 was recorded for stock option
issued under this grants. These options can be redeemed at the option of the holder via issuance of Company
shares, cashless exercise or settled for net cash benefit which would represent the difference between the share
price on date of exercise and share price on grant date.
The inputs used in the measurement of the fair values at grant date are shown in the table below:
Employee Options
Number of options
12,360,994
Grant date
1 April 2024
Expiry date
31 March 2029
Exercise price - A$
$0.21
Share price at grant date - A$
$0.20
Expected volatility
98%
Risk-free interest rate
3.61%
Fair Value - A$
$0.15
Expected volatility has been based on an evaluation of the historical volatility of the Company's share price, over
the historical period commensurate with the term of the option.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 59
31 December 2023
Options
Grant
Date
Date of
Expiry
Exercise
Price (A$)
Balance at the
start of the
period
Granted
during the
period
Exercised
during the
period
Expired
during the
period
Balance at
the end of
the period
Consultant
14-08-20 31-07-23
$0.12
2,500,000
— (1,750,000)
(750,000)
—
Consultant
08-09-20 31-08-23
$0.12
2,500,000
— (2,500,000)
—
—
Director (i)
18-11-20 30-09-23
$0.12
2,500,000
— (2,500,000)
—
—
Lead Managers
23-09-21 22-09-24
$0.36
10,000,000
—
—
—
10,000,000
Employees
02-08-22 30-08-27
$nil
2,032,548
—
(725,949)
—
1,306,599
Consultant
02-08-22 05-08-26
$0.26
1,000,000
—
—
—
1,000,000
Employee - CEO
21-11-23 20-11-25
$0.30
—
10,000,000
—
—
10,000,000
Employees - CEO &
other employees
01-12-23 30-11-28
$0.18
—
12,065,136
—
—
12,065,136
20,532,548
22,065,136 (7,475,949)
(750,000)
34,371,735
(i) Cashless exercise of 2.5 million options in which the after-tax value of the award was used to purchase common shares on
the open market for $62,381.
On 21 November 2023, the Company issued 10,000,000 unlisted options to the Chief Executive Officer in
accordance with the Company's Option Plan for which an expense of $180,306 was recorded at 31 December
2024 (31 December 2023: $39,628). As per the terms of this option award, each option carries the right in favour
of the option holder to subscribe to one fully paid ordinary share of the Company.
On 1 December 2023, the Company issued 12,065,136 unlisted options with an exercise price of A$0.1764 to
employees of the Group in accordance with the Company’s Option Plan for which an expense of $278,838 was
recorded at 31 December 31 2024 (31 December 2023: $44,476). A valuation factor of 0.5 is applied when
determining the total award value. These options can be redeemed at the option of the holder via issuance of
Company shares, cashless exercise or cash payout which would represent the net cash benefit being the difference
between the share price on date of exercise and share price on grant date.
CEO Options
CEO and other employees Options
Number of unlisted options
10,000,000
12,065,136
Grant date
21 November 2023
1 December 2023
Expiry date
20 November 2025
30 November 2028
Exercise price - A$
$0.30
$0.18
Share price at grant date - A$
$0.19
$0.16
Expected volatility
85%
98%
Risk-free interest rate
4.16%
4.11%
Fair Value - A$
$0.07
$0.13
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 60
c) Reconciliation of outstanding share options
The Company’s shares are primarily traded in Australian Dollar on the Australian Stock Exchange and, accordingly,
share option information is presented in Australian dollars. The number and weighted average prices of share
options are as follows:
31 December 2024
31 December 2023
Range of exercise prices
Options Weighted average
exercise price
Options
Weighted
average exercise
price
A$
A$
Outstanding at 1 January and 1 July
34,371,735
0.26 20,532,548
0.23
Granted during the year
12,360,994
0.21 22,065,136
0.23
Forfeited during the year
—
—
—
—
Exercised during the year
(429,191)
— (7,475,949)
0.11
Expired during the year
(10,000,000)
0.36
(750,000)
0.12
Outstanding, at 31 December
36,303,538
0.22 34,371,735
0.26
The weighted average share price at date of exercise for share options exercised during the year ended 31
December 2024 was A$0.12 (31 December 2023: A$0.22).
The following table summarises information about share options outstanding as at 31 December 2024:
Options outstanding
Options exercisable
Range of exercise prices
Number
outstanding
Weighted average
remaining contractual
life in years
Weighted
average
exercise price
Number
exercisable
Weighted
average
exercise price
A$
A$
A$
Nil
877,408
2.67
—
877,408
—
0.18-0.21
24,426,130
4.09
0.19
4,021,712
0.18
0.26–0.36
11,000,000
1.51
0.30
6,000,000
0.29
36,303,538
—
0.22 10,899,120
0.23
The following table summarises information about share options outstanding as at 31 December 2023:
Options outstanding
Options exercisable
Range of exercise prices
Number
outstanding
Weighted average
remaining contractual
life in years
Weighted
average
exercise price
Number
exercisable
Weighted
average
exercise price
A$
A$
A$
Nil
1,306,599
3.67
—
1,306,599
—
0.18-0.21
12,065,136
4.92
0.18
—
—
0.26–0.36
21,000,000
1.37
0.33 11,000,000
0.35
34,371,735
—
0.26 12,306,599
0.31
NOTE 30
CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
Cashflow (i)
Non-cash changes
1 January 2024
Additions or
modifications
Foreign
exchange
Finance
expenses 31 December 2024
Convertible notes
22,304
(23,245)
—
(496)
1,437
—
2L Loan
73,834
—
—
—
—
73,834
Lease obligations
26,111
(11,918)
2,627
(1,465)
1,711
17,066
Total
122,249
(35,163)
2,627
(1,961)
3,148
90,900
(i) Lease cashflows include lease principal and lease interest payments.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 61
Cashflow (i)
Non-cash changes
1 July
2023
Acquisition of
Arctic Companies
Additions
Foreign
exchange
Finance
expenses
Other 31 December
2023
Convertible notes (ii)
20,845
—
—
—
496
996
(33)
22,304
2L and 3L Loans (iii)
—
100,460
(26,626)
—
—
—
—
73,834
Lease obligations
409
29,434
(5,477)
733
23
989
—
26,111
Total
21,254
129,894
(32,103)
733
519
1,985
(33)
122,249
(i) Lease cashflows include lease principal and lease interest payments.
(ii) Non-cash changes on convertible notes in 'Other' include $33 thousand in exercise of convertible note (note 19).
(iii) 3L Term Loan was an assumed liability by the Group with the acquisition of Arctic Companies that was repaid on acquisition
date.
NOTE 31
COMMITMENTS
As at 31 December 2024, the Group had commitments that require the following minimum future payments,
which were not accrued in the consolidated statement of financial position:
Contractual Obligations
Total
Less than 1
year
Year
2–3
Year
4–5
After
5 years
Participation agreements commitments (a)
34,632
3,461
6,919
6,919
17,333
Environmental agreements commitments (b)
151,355
63,106
81,374
2,904
3,971
Surface and mineral licenses
7,885
1,421
1,296
856
4,312
Purchase commitments
61,051
61,051
—
—
—
Total contractual obligations
254,923
129,039
89,589
10,679
25,616
(a) Participation agreements
Ekati Diamond Mine has signed participation agreements with various aboriginal communities. Contractual
obligations under these agreements amount to $34.6 million and are expected to contribute to the social,
economic and cultural well-being of these communities.
(b) Environmental commitments
To comply with environmental and other regulatory agreements, the Group has secured its reclamation
obligations for the Ekati Diamond Mine through surety bonds and Letter of Credit ("LCs") for reclamation
obligation for the Ekati Diamond Mine. These LCs were issued under the LC Facility and are fully cash collateralised
at 100% of their face value. The LC Facility has a capacity of CDN$20.0 million with CDN$7.7 million utilised as at
31 December 2024 (CDN$13.3 million as at 31 December 2023).
The Group signed a new surety bond agreement, in which the Group is required to make four quarterly payments
of CDN$14.5 million each to cash collateralise the surety bonds until 2027. These payments are contingent on
maintaining a minimum cash balance of at least US$30.0 million at all times. Additionally, while the bonds remain
outstanding, Arctic Companies are prohibited from declaring or paying dividends or distributions without prior
written consent from the surety providers. During 2024, CDN$29.0 million of cash collateral were contributed.
31 December 2024
31 December 2023
Surety bonds
CDN$
193,490
212,969
US$ equivalent
134,471
161,023
(c) Contingent liabilities
In the ordinary course of business activities, the Group may be contingently liable for litigation and claims that
arise due to the size, complexity and nature of the Group’s operations. The outcome of such claims against the
Group is not determinable at this time; however, their ultimate resolution is not expected to have a material
adverse effect on the Group.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 62
NOTE 32
AUDITOR’S REMUNERATION
(rounded to the nearest US dollar)
31 December 2024
Amounts received or due and receivable by auditors:
KPMG
Australia
KPMG
Canada
KPMG
Belgium
Total
Audit and review of the annual and half-year financial report
177,286
321,385
132,243
630,914
Total audit and audit related
177,286
321,385
132,243
630,914
Other services
Kimberley certification audit
—
—
8,076
8,076
Audit of pension plans
—
29,801
—
29,801
Accounting matters
27,031
—
—
27,031
Total other services
27,031
29,801
8,076
64,908
Total audit and other services
204,317
351,186
140,319
695,822
(rounded to the nearest US dollar)
31 December 2023
Amounts received or due and receivable by auditors:
KPMG
Australia
KPMG
Canada
KPMG
Belgium
Total
Audit and review of the annual and half-year financial report
130,431
601,427
92,988
824,846
Total audit and audit related
130,431
601,427
92,988
824,846
Other services
KPMG Belgium - Contribution audit and Kimberley Certification
audit
—
—
78,512
78,512
KPMG Canada - Accounting matters, prospectus and ASX filings
review
—
60,350
—
60,350
Total other services
—
60,350
78,512
138,862
Total audit and other services
130,431
661,777
171,500
963,708
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 63
NOTE 33
PARENT ENTITY
31 December 2024
31 December 2023
Assets
Current assets
9,238
7,024
Non-current assets
154,230
170,548
Total assets
163,468
177,572
Liabilities
Current liabilities
1,625
22,898
Non-current liabilities
179
344
Total liabilities
1,804
23,242
Equity
Contributed equity
200,607
200,607
Reserves
8,384
7,315
Accumulated losses
(47,327)
(53,592)
Total equity
161,664
154,330
Net profit/(loss) for the year
6,265
(5,034)
Total comprehensive loss
6,265
(5,034)
Contingent liabilities
The parent entity had no contingent liabilities as at 31 December 2024 and 2023.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2024 and
2023.
Exploration commitments
The parent entity has no significant exploration commitments.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed through the
report, except for the following:
• Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
• Investments in joint ventures are accounted for at cost, less any impairment, in the parent entity.
• Dividends received from subsidiaries are recognised as other income by the parent entity and its
receipt may be an indicator of an impairment of the investment.
For personal use only
Annual Report | Year Ended 31 December 2024
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 64
NOTE 34
MATERIAL ACCOUNTING POLICIES
The Group has consistently applied the following accounting policies to all periods presented in these consolidated
financial statements, except if mentioned otherwise.
In addition, the Group adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2) from 1 July 2023. The amendments require the disclosure of ‘material’, rather than ‘significant’,
accounting policies. Although the amendments did not result in any changes to the accounting policies
themselves, they impacted the accounting policy information disclosed in Note 34 in certain instances (see Note
1 for further information).
(a) Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Burgundy
Diamond Mines Limited as at 31 December 2024 and 31 December 2023. The results of subsidiaries are presented
for the year from 1 January 2024 to 31 December 2024 and the period from 1 July 2023 to 31 December 2023.
(i) SUBSIDIARIES
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights
to, variable returns from its investment with the entity and has the ability to affect those returns through its power
over the entity. All subsidiaries are consolidated from the date on which control is transferred to the Group until
the date on which control ceases.
All intra-group balances, income and expenses, and unrealised gains and losses resulting from intra-group
transactions of the consolidated entities are eliminated in full on consolidation.
(ii) JOINT ARRANGEMENTS
Joint arrangements represent activities where the Company has joint control established by a contractual
agreement. Joint control requires unanimous consent for financial and operational decisions. A joint arrangement
is either a joint operation, whereby the parties have rights to the assets and obligations for the liabilities, or a joint
venture, whereby the parties have rights to the net assets. Classification of a joint arrangement as either joint
operation or joint venture requires judgement. Management’s consideration includes, but are not limited to,
determining if the arrangement is structured through as separate vehicle and whether the legal from and
contractual arrangements give the entity direct rights to the assets and obligations for the liabilities within the
normal course of business. Other facts and circumstances are also assessed by management, including the entity’s
rights to the economic benefits of assets and its involvement and responsibility for settling liabilities associated
with the arrangement.
(b) Business combination
Acquisitions of businesses are accounted for using the acquisition method whereby all identifiable assets and
liabilities are recorded at their fair value as at the date of acquisition with limited exceptions. Any excess purchase
price over the aggregate fair value of identifiable net assets is recorded as goodwill. Acquisition related costs are
expensed as incurred and are included in the consolidated statement of profit or loss. Estimates of future cash
flows, forecast prices, interest rates and discount rates are made in determining the fair value of assets acquired
and liabilities assumed. Changes in any of the assumptions or estimates used in determining the fair value of
acquired assets and liabilities could impact the amounts assigned to assets, liabilities, intangible assets and
goodwill in the purchase price equation.
(c) Property, plant and equipment ("PPE")
(i) EXPLORATION AND EVALUATION EXPENDITURES
Exploration and evaluation activities include: acquisition of rights to explore; topographical, geological,
geochemical and geophysical studies; exploratory drilling; trenching and sampling; and activities involved in
evaluating the technical feasibility and commercial viability of extracting mineral resources. Exploration and
evaluation costs are expensed as incurred. They are only capitalised when the Group concludes that there is
evidence to support probability of generating positive economic returns in the future. A mineral resource is
considered to have economic potential when it is expected that the technical feasibility and commercial
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viability of extracting the mineral resource can be demonstrated and the future economic benefits are
probable.
In making this determination, the extent of exploration, as well as the degree of confidence in the mineral
resource, is considered. Capitalised exploration and evaluation expenditures are recorded as a component
of property, plant and equipment. Capitalised exploration and evaluation assets will be assessed for
impairment when specific facts and circumstances suggest that the carrying amount may exceed its
recoverable amount.
Once development is sanctioned, any capitalised exploration and evaluation costs are tested for impairment
and reclassified to mineral property assets within property, plant and equipment. All subsequent
development expenditure is capitalised.
Capitalised exploration and evaluation costs in relation to an abandoned area are written off in full against
profit or loss in the year in which the decision to abandon the area is made.
(ii) COMMENCEMENT OF COMMERCIAL PRODUCTION
There are a number of quantitative and qualitative measures the Group considers when determining if
conditions exist for the transition from pre-commercial production to commencement of commercial
production of an operating mine, which include:
• all major capital expenditures have been completed to bring the mine to the condition necessary for it to
be capable of operating in the manner intended by management;
• mineral recoveries are at or near expected production levels; and
• the ability exists to sustain ongoing production of ore.
(iii) PP&E COST
Items of PP&E are measured at cost, less accumulated depreciation and accumulated impairment losses. The
initial cost of an asset comprises its purchase price and construction cost, any costs directly attributable to
bringing the asset into operation including stripping costs incurred in open pit development before
production commences, the initial estimate of the site restoration obligation and, borrowing costs for
qualifying assets. Repair and maintenance costs are expensed as incurred. When parts of an item of PP&E
have different useful lives, the parts are accounted for as separate items (major components) of property,
plant and equipment.
(iv) DEPRECIATION AND AMORTISATION
Assets under construction are not depreciated until these assets are ready for their intended use. The unit-
of-production method is applied to a substantial portion of the Ekati Diamond Mine property, plant and
equipment. Depending on the asset, it is based on either tonnes of material processed or carats of diamonds
recovered during the period relative to the estimated proven and probable ore reserves of the ore deposit
being mined, or to the total ore deposit. Other property, plant and equipment is depreciated using the
straight- line method over the estimated useful lives of the related assets which are as follows:
Asset
Estimated useful life (years)
Buildings
Up to 15
Machinery and mobile equipment
2–15
Computer equipment and software
3–6
Furniture, fixtures and equipment
2–10
Polishing equipment
4–10
Leasehold and building improvements
Up to 15
Right-of-use assets
Lease term or life of the asset
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The estimation of mineral reserves is a subjective process. The Group estimates its mineral reserves based
on information compiled by an appropriately qualified person. Forecasts are based on engineering data,
projected future rates of production and the timing of future expenditures, all of which are subject to
numerous uncertainties and various interpretations. The Group expects that its estimates of reserves will
change to reflect updated information. Reserve estimates can be revised upward or downward based on the
results of additional future drilling, testing or production levels and on diamond prices. Changes in reserve
estimates may impact the carrying value of exploration and evaluation assets, mineral properties, property,
plant and equipment, mine rehabilitation and site restoration provisions, recognition of deferred tax assets,
and depreciation charges. Estimates and assumptions about future events and circumstances are also used
to determine whether economically viable reserves exist that can lead to commercial development of an ore
body.
Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted
if appropriate. The impact of changes to the estimated useful lives or residual values is accounted for
prospectively.
(v) STRIPPING COSTS
Mining costs associated with stripping activities in an open pit mine are expensed unless the stripping activity
can be shown to represent a betterment to the mineral property, in which case the stripping costs would be
capitalised and included in deferred mineral property costs within mining assets.
When the benefit from the stripping activity is realised in the current period, the stripping costs are
accounted for as the cost of inventory. When the benefit is the improved access to ore in future periods, the
costs are recognised as a mineral property asset – if improved access to the ore body is probable, the
component of the ore body can be accurately identified, and the cost associated with improving the access
can be reliably measured. If these conditions are not met, the costs are expensed to the consolidated
statement of profit or loss as incurred. After initial recognition, the stripping activity asset is depreciated on
a systematic basis (unit-of- production method) over the expected useful life of the identified component of
the ore body that becomes more accessible as a result of the stripping activity.
(vi) MAJOR MAINTENANCE AND REPAIRS
Expenditure on major maintenance refits or repairs comprises the cost of replacement assets or parts of
assets and overhaul costs. When an asset, or part of an asset that was separately depreciated, is replaced
and it is probable that future economic benefits associated with the new asset will flow to the Group through
an extended life, the expenditure is capitalised. The unamortised value of the existing asset or part of the
existing asset that is being replaced is expensed. Where part of the existing asset was not separately
considered as a component, the replacement value is used to estimate the carrying amount of the replaced
asset, which is immediately written off. All other day-to-day maintenance costs are expensed as incurred.
(d) Assets held for sale
Non-current assets are classified for held-for-sale if it is highly probable that they will be recovered primarily
through sale rather than through continuing use. Such assets are measured at the lower of their carrying amount
and fair value less cost to sell. Impairment loss on initial classification as held-for-sale and subsequent gains and
losses on remeasurement are recognised in profit or loss. Once classified as held-for-sale, property, plant and
equipment is no longer amortised or depreciated.
(e) Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets other than inventory and deferred taxes are reviewed
at each reporting date to determine whether there is any indication of impairment. If any such indication exists,
the recoverable amount is estimated.
IMPAIRMENT INDICATOR
Determining whether there are any indications of impairment requires significant judgement of external factors,
such as customer turnover, marketing supply and demand, change in discount and foreign exchange rates, a
significant decline in an asset's market value and significant changes in the technological, market, economic or
legal environment that would have an adverse impact on the Group's cash generating unit (“CGU”). For the
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purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets,
referred to as a CGU. If the asset does not generate cash inflows that are largely independent of those from other
assets or groups of assets, the asset is tested as part of a CGU.
RECOVERABLE AMOUNT
The recoverable amount of an asset is the greater of its fair value less cost of disposal (“FVLCD”) and its value in
use. In the absence of a binding sales agreement, fair value is estimated on the basis of values obtained from an
active market or from recent transactions or on the basis of the best information available that reflects the amount
that the Group could obtain from the disposal of the asset.
FVLCD is estimated by using the discounted future after-tax cash flows expected to be derived from the CGU, less
an estimated amount for cost to dispose. The determination of FVLCD for each CGU are considered to be Level 3
of the fair value measurements, as they are derived from valuation techniques that include inputs that are not
based on observable market data. When discounting estimated future after-tax cash flows, the Group uses an
after-tax discount rate which reflects the risks specific to the CGU. Estimated cash flows are based on expected
future production, expected selling prices, expected operating costs and expected capital expenditures. Value in
use is defined as the present value of future pre-tax cash flows expected to be derived from the use of an asset,
using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset.
These assessments require the use of estimates and assumptions such as long-term commodity prices, discount
rates, future capital requirements, exploration potential and operating performance. Expected rough diamond
production levels, which comprise proven and probable reserves and an estimate of the recoverable amount of
resources, are used to estimate expected future cash flows. Expected future rough diamond prices are estimated
based on realised prices for rough diamonds sold during the Group’s most recent sale, geological data regarding
the quality of rough diamonds in reserves and resources and expected future levels of worldwide diamond
production. Future operating and capital costs, including labour and fuel costs, are based on the most recently
approved life of mine plan, which is reviewed and approved annually by senior management and the Board of
Directors. The assessment also requires estimates and assumptions related to foreign exchange rates and discount
rates, which are determined based on prevailing market conditions at the date of the assessment. Where
applicable, assumptions are aligned with the Group’s most recent economic analysis of mineral reserves and
resources. Financial results as determined by actual events could differ from those estimated, and changes in
these estimates that decrease the estimated recoverable amount of the CGU could affect the carrying amounts
of assets and result in an impairment charge.
IMPAIRMENT LOSS
When the recoverable amount of a CGU is less than the carrying amount of that CGU, the impairment loss is first
allocated to reduce the carrying amount of any goodwill allocated to that CGU, and then to the other assets of
that CGU pro rata on the basis of the carrying amount of each asset in the CGU. Any impairment loss is recognised
directly in the consolidated statement of profit in those expense categories consistent with the function of the
impaired asset. Impairment losses for property, plant and equipment and intangible assets are reversed if there
has been a change in the estimates used to determine an asset’s recoverable amount since the last impairment
loss was recognised, and it has been determined that the asset is no longer impaired or that impairment has
decreased. The reversal is recognised in earnings before income taxes in the period in which the reversal occurred
and is limited to the carrying value less any subsequent depreciation that would have been determined had no
impairment charge been recognised in prior years.
(f) Inventory and supplies
Inventory includes stockpile ore inventory, rough diamond inventory (work-in-progress and finished goods)
recovered from Ekati Mine and supplies inventory that are all related to the rough diamond mining segment.
Inventory in the polished diamond segment includes purchased rough diamonds, polished diamonds and
jewellery. All inventories are recorded at the lower of cost and net realisable value.
Stockpiled ore represents coarse ore that has been extracted from the mine and is stored for future processing.
Stockpiled ore value is based on the costs incurred (including depreciation and amortisation) in bringing the ore
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to the stockpile. Stockpile ore inventory is determined on a weighted average cost basis. Mining rough diamonds
inventory costs are determined on a weighted average cost basis and include cash production costs, depreciation
and amortisation. Supplies inventory includes consumables and spares maintained at the Ekati Mine site and is
measured on a weighted average cost basis.
In the polished diamond segment, costs of purchased rough diamonds, polished diamond inventory and jewellery
are determined either using a weighted average basis or specific unit identification basis depending on the nature
of the item.
Net realisable value is the estimated selling price for the final product. The measurement of inventory, including
the determination of its net realisable value, involves the use of estimates. The significant sources of estimation
uncertainty include diamond prices, production grade and expenditure, and determining the remaining costs of
completion to bring inventory into its saleable form. The Group uses historical data on prices achieved, grade and
expenditure in forming its assessment.
(g) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances with banks and short-term money market instruments
(with a maturity on acquisition of less than 90 days) and excludes restricted cash.
(h) Restricted cash
Cash which is subject to legal or contractual restrictions on its use and is classified separately as restricted cash.
(i) Leases
The Group recognises a right-of-use asset and a lease liability at the lease commencement date.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange
for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the
Group assesses whether:
(i) the contract involves the use of an identified asset that may be specified explicitly or implicitly and should
be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier
has a substantive substitution right, then the asset is not identified;
(ii) the Group has the right to obtain substantially all of the economic benefits from use of the asset
throughout the period of use; and
(iii) the Group has the right to direct the use of the asset. The Group has this right when it has the decision-
making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases
where the decision about how and for what purpose the asset is used is predetermined, the Group has the
right to direct the use of the asset if either:
• the Group has the right to operate the asset; or
• the Group designed the asset in a way that predetermines how and for what purpose it will be used.
At inception or on reassessment of a contract that contains a lease component, the Group has elected not to
separate non-lease components and account for the lease and non-lease components as a single lease
component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of
costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated
useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In
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addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate
as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
(i) fixed payments, including in-substance fixed payments;
(ii) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at
the commencement date;
(iii) amounts expected to be payable under a residual value guarantee; and
(iv) the exercise price under a purchase option that the Group is reasonably certain to exercise, lease
payments in an optional renewal period if the Group is reasonably certain to exercise an extension option,
and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there
is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group's
estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its
assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of
the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that
include renewal options. The assessment of whether the Group is reasonably certain to exercise such options
impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets
recognised.
The Group presents right-of-use assets that do not meet the definition of investment property in “property, plant
and equipment” in the consolidated statement of financial position.
(i)SHORT-TERM LEASES AND LEASES OF LOW-VALUE ASSETS
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have
a lease term of 12 months or less and leases of low-value assets being those assets with a fair value of less
than US$5,000 when new. The Group recognises the lease payments associated with these leases as an
expense on a straight-line basis over the lease term.
(j) Employee pension plans
The Group operates various pension plans. The plans are generally funded through payments to insurance
companies or trustee-administered funds determined by periodic actuarial calculations. The Group has both
defined benefit and defined contribution plans.
DEFINED CONTRIBUTION PLAN
Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is
available.
DEFINED BENEFIT PLAN
The liability recognised in the statement of financial position in respect of defined benefit pension plans is the
present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit
method. The present value of the defined benefit obligation is determined by discounting the estimated future
cash outflows using interest rates on high-quality corporate bonds that are denominated in the currency in which
the benefits will be paid, and that have terms to maturity approximating the terms of the related pension
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obligation. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions
are charged or credited to equity in other comprehensive income in the period in which they arise. Past service
costs are recognised immediately in income. The Group recognises gains and losses on the settlement of a defined
benefit plan when the settlement occurs.
The present value of the pension obligations depends on a number of factors that are determined on an actuarial
basis including discount rate, life expectancy and expected return on plan assets. The assumptions are reviewed
each year and are adjusted where necessary to reflect changes in fund experience and actuarial
recommendations. Any changes in these assumptions will impact the carrying amount of the pension obligation.
(k) Provisions
The Group records the present value of estimated costs of legal and constructive obligations required to restore
operating locations in the period in which the obligation is incurred. The nature of these restoration activities
includes dismantling and removing structures, rehabilitating mines and tailings dams, dismantling operating
facilities, closure of plant and waste sites, and restoration, reclamation and re-vegetation of affected areas.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The expense relating to any
provision is included in net profit or loss. Where discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost in net profit or loss.
Significant judgements and estimates are involved in forming expectations of future site closure and reclamation
activities and the amount and timing of the associated cash flows. Those expectations are formed based on
existing environmental and regulatory requirements. The Ekati Diamond Mine rehabilitation and site restoration
provision is prepared by management at the Ekati Diamond Mine.
(l) Income taxes
Income tax expense comprises current and deferred tax and is recognised in net profit or loss except to the extent
that it relates to items recognised directly in equity, in which case it is recognised in equity or in other
comprehensive income. Income tax expense includes mining royalty taxes that the owner or operator of a mine
shall pay to the Government of the Northwest Territories royalties (“Royalty Tax”) on the value of the mine’s
output during that fiscal year.
The Group has determined that the global minimum top-up tax – which is required to pay under Pillar Two
legislation – is an income tax in the scope of IAS 12. The Group has applied a temporary mandatory relief from
deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.
Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax expense is recognised in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for:
(i) Temporary differences arising on the initial recognition of assets and liabilities in a transaction that:
• is not a business combination; and
• at the time of the transaction affects neither accounting nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences;
(ii) Temporary differences related to investment in subsidiaries, associates and joint arrangements to the
extent that the Group is able to control the timing of the reversal of the temporary differences and it is
probable that they will not reverse in the foreseeable future; and
(iii)Taxable temporary differences arising on initial recognition of goodwill.
Deferred tax expense is measured at the tax rates that are expected to be applied to temporary differences when
they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available
against which the temporary difference can be utilised.
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Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is probable that the
related tax benefit will not be realised. Deferred tax assets and deferred tax liabilities are offset if a legally
enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes
relate to the same taxable entity and the same taxation authority.
The Group classifies foreign exchange differences on deferred tax assets or liabilities in jurisdictions where the
functional currency is different from the currency used for tax purposes as income tax expense. The unrealised
foreign exchange gain or loss related to deferred income tax asset and liability is recorded as part of deferred tax
expense or recovery for each year.
Judgement is required in determining whether deferred tax assets are recognised in the consolidated statement
of financial position. Deferred tax assets, including those arising from unused tax losses, require management to
assess the likelihood that the Group will generate taxable earnings in future periods in order to utilise recognised
deferred tax assets. Estimates of future taxable income are based on forecasted income from operations and the
application of existing tax laws in each jurisdiction. To the extent that future taxable income differs significantly
from estimates, the ability of the Group to realise the deferred tax assets recorded at the consolidated statement
of financial position date could be impacted. Additionally, future changes in tax laws in the jurisdictions in which
the Group operates could limit the ability of the Group to obtain tax deductions in future periods.
(m) Revenue
The Group is principally engaged in the business of producing diamonds and earns revenue predominantly through
the sale of rough diamonds in the Rough Diamond Segment. The Polished Diamond segment earns revenue
through cutting, polishing and sale of polished diamonds and fine jewellery.
All diamond sales to customers generally include one performance obligation. Revenue from contracts with
customers is recognised at a point of time when control of the diamonds is transferred to the customer and selling
prices are known, generally on delivery of the diamonds. Sales are measured at the fair value of the consideration
received. The Group’s sales policy requires receipt of cash prior to delivery of rough diamonds to customers. There
is no return policy, as all diamond sales are final.
Revenue from cutting and polishing collaborative sale agreements:
• is considered to be variable consideration and is recognised to the extent that it is highly probable that its
inclusion will not result in a significant revenue reversal in the future when the uncertainty has been
resolved. This is generally the case when cutting and polishing work has substantially been completed and
relative certainty exists over the quality of the final product or when the polished diamonds have been sold;
and
• is recognised once a high level of certainty exists regarding factors that influence the sale prices including
the size, quality and colour of the final polished diamonds. These factors are considered per individual
stone. If the Group satisfies a performance obligation before it receives the consideration, either a contract
asset or a receivable.
(n) Commitments and contingencies
Provisions and liabilities for legal and other contingent matters are recognised in the period when the
circumstance becomes probable that a future cash outflow resulting from past operations or events will occur and
the amount of the cash outflow can be reasonably estimated. The timing of recognition and measurement of the
provision requires the application of judgement to existing facts and circumstances, which can be subject to
change, and the carrying amounts of provisions and liabilities are reviewed regularly and adjusted accordingly.
The Group is required to both determine whether a loss is probable based on judgement and interpretation of
laws and regulations and determine if the loss can be reasonably estimated. When a loss is recognised, it is charged
to net profit. The Group continually monitors known and potential contingent matters and makes appropriate
disclosure and provisions when warranted by the circumstances present. Contingent assets are not recognised in
financial statements. However, when the realisation of income is virtually certain, then the related asset is
recognised.
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(o) Financial instruments
Financial instruments are any contracts that give rise to a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial assets and liabilities are recognised when the Group becomes a
party to the contractual provisions of the instruments. Financial assets and liabilities are not offset unless there is
a current legally enforceable right to offset the recognised amounts and there is an intention to settle on a net
basis, or to realise the assets and settle the liabilities simultaneously.
The Group’s financial instruments include cash and cash equivalents, restricted cash, trade and other receivables,
reclamation deposits, trade and other payables, consideration payable, contingent consideration and loans and
borrowings.
CLASSIFICATION
Financial assets are classified in one of the following categories: amortised cost, fair value through other
comprehensive income (“FVTOCI”) or fair value through profit or loss (“FVTPL”). Financial liabilities are classified
as measured at amortised cost or FVTPL. Classification of financial instruments in the Group’s financial statements
depends on the purpose for which the financial instruments were acquired or incurred. The classification of
financial instruments is determined at initial recognition.
MEASUREMENT
Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and liabilities at
FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate,
on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities measured at FVTPL are recognised immediately in profit or loss.
Subsequently, financial instruments measured at amortised cost are measured using the effective interest
method. The effective interest method is a method of calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period.
IMPAIRMENT
A loss allowance for expected credit losses is recognised on a financial asset that is measured at amortised cost
and FVTOCI. The loss allowance for a financial asset measured at amortised cost and FVTOCI is recognised in profit
or loss as an impairment gain or loss. At each reporting date, the loss allowance for a financial instrument should
be measured at the amount equal to the lifetime expected credit losses if the credit risk on that financial
instrument has increased significantly since initial recognition. If the credit risk has not increased significantly since
initial recognition, the loss allowance should be measured at the amount equal to 12-month expected credit
losses. The loss allowance should always be measured at the amount equal to lifetime expected credit losses for
trade receivables not containing a significant financing component.
DERECOGNITION
A financial asset is derecognised when:
• the contractual right to the cash flows from the financial asset expire; or
• the Group transfers the contractual rights to receive the cash flows of the financial asset and transfers
substantially all the risks and rewards of ownership of the financial asset.
A financial liability is derecognised when the liability is extinguished, discharged, cancelled or expires.
(p) Compound financial instruments
Compound financial instruments in issuance comprise convertible notes denominated in Australian Dollars that
can be converted to ordinary shares at the option of the holder, where the number of shares to be issued is fixed
and does not vary with changes in fair value.
Upon issuance of the convertible notes the fair value of the liability component is determined using a market rate
for an equivalent non-convertible bond and this amount is carried as a liability on the amortised cost basis until
extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised
as a finance cost using the effective interest rate method. The remainder of the proceeds are allocated to the
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 73
conversion option that is recognised and included in shareholders equity as a convertible note reserve, net of
transaction costs. The carrying amount of the conversion option is not remeasured in the subsequent years.
The corresponding interest on convertible notes is expensed to profit or loss. On conversion at maturity, the
financial liability is reclassified to equity and no gain or loss is recognised.
The Group has applied an accounting policy choice to not reclassify financial instruments due to a change in
functional currency when there are no changes in contractual terms of such instruments, which, had this change
in functional currency occurred before initial recognition of the instrument, would have changed its classification.
(q) Fair value measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date in the principal or, in its absence, the most advantageous
market to which the Group has access at that date.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described below. The Group uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation technique:
• Level 1: The fair value measurements are classified as Level 1 if the fair value is determined using quoted,
unadjusted market prices for identical assets or liabilities.
• Level 2: The fair value measurements are classified as Level 2 when inputs other than quoted prices in Level
1 which have a significant effect on the recorded fair value are observable, either directly or indirectly.
• Level 3: The fair value measurements are classified as Level 3 when inputs require unobservable market
data or use statistical techniques to derive forward curves from observable market data and unobservable
inputs.
(r) Foreign currency
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (“functional currency”). Determination of functional
currency requires judgements. The consolidated financial statements are presented in US Dollar, which is the
Group’s functional and presentation currency effective 1 July 2023. Refer to Note 2 for further information on
change in functional currency during the year.
Transactions and balances
Monetary assets and liabilities denominated in foreign currencies are translated to US dollars at exchange rates
in effect at the statement of financial position date, and non-monetary assets and liabilities are translated at rates
of exchange in effect when the assets were acquired or obligations incurred. Revenues and expenses are
translated at rates in effect at the time of the transactions. Foreign exchange gains and losses are included in net
profit or loss.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 74
Foreign operations
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
• Assets and liabilities for each statement of financial position account presented are translated at the closing
rate at the date of that statement of financial position;
• Income and expenses for each statement of profit or loss and other comprehensive income are translated
at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of
the transactions); an
• All resulting exchange differences are recognised in other comprehensive income and included in the
foreign currency translation reserve in the statement of financial position.
When a foreign operation is sold, the cumulative exchange differences in the translation reserve related to that
foreign operation are reclassified to profit or loss as part of the gain or loss on sale.
(s) Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable
to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition
as part of the purchase consideration.
If the Company reacquires its own equity instruments, for example as a result of a share buy-back, those
instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the
profit or loss and the consideration paid including any directly attributable incremental costs (net of income taxes)
is recognised directly in equity.
(t) Basic and diluted earnings per share
Basic earnings per share are calculated by dividing net profit or loss by the weighted average number of shares
outstanding during the period. Diluted earnings per share adjusts the figures used in determination of basic
earnings per share to take into account the net impact of any dilutive potential ordinary shares arising out of
option or convertible notes exercises. Diluted earnings per share are determined using the treasury stock method
to calculate the dilutive effect of options. The treasury stock method assumes that the exercise of any “in-the-
money” options with the option proceeds would be used to purchase common shares at the average market value
for the period. Options with an exercise price higher than the average market value for the period are not included
in the calculation of diluted earnings per share as such options are not dilutive.
(u) Share-based compensation
Cash-settled RSU and DSU awards are provided to certain employees, officers and directors of the Group. The
Group also offers equity settled awards such as options over shares to certain employees, officers, consultants
and directors of the Group that are settled via issuance of shares, cash-less exercise or via cash payout (requires
approval from Board of Directors).
Restricted Share Units
Under the RSU plan certain employees are granted RSUs that generally vest within three years and are paid out
in cash. A liability for RSUs is measured at the fair value on grant date is subsequently adjusted for changes in fair
value. The liability is recognised on a straight-line basis over the vesting period, with a corresponding charge to
share-based compensation expense, as a component of general and administrative expenses.
Deferred Share Units
DSUs vest over a period of three years and are paid out in cash. Vested DSU grants are only exercisable on
departure of the employee (e.g. retirement, resignation, death). The initial fair value of the DSU liability is
measured on grant date and is subsequently adjusted for changes in fair value. The liability is recognised on a
straight-line basis over the vesting period with a corresponding charge to share-based compensation expense.
For personal use only
Annual Report | Year Ended 31 December 2024
(tabular amounts in thousands of United States dollars, except as otherwise noted)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 75
Equity settled awards
Grants under the Group’s share-based compensation plan are accounted for in accordance with the fair value
method of accounting. For share option plans that will settle through the issuance of equity, the fair value of
options is determined on their grant date using an appropriate valuation model that takes into account the
exercise price, the term of the option, the share price at grant date, expected price volatility of the underlying
share price, the expected dividend yield and the risk-free rate for the term of the option.
The cost of equity settled awards is recorded as compensation expense measured using the grant date fair value
of the award over the period that the award vests, with the corresponding credit to share-based payments reserve
in Other Reserves. The amount recognised as an expense is adjusted to reflect the number of awards for which
the related service and non-market performance conditions are expected to be met, such that the amount
ultimately recognised is based on the number of awards that meet the related service and non-market
performance conditions at the vesting date. Depending on terms of the option grant, these awards can be settled
via issuance of Company shares, cashless exercise or payment in cash Board approval).
If equity-settled awards are modified, an additional expense is recognised, over the remaining vesting period, for
any modification that increases the total fair value of the share-based compensation benefit as at the date of
modification.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the
cancelled and new award is treated as if they were a modification.
NOTE 35
MATTERS SUBSEQUENT TO THE REPORTING PERIOD
(i) Fuel offtake agreement
During February 2025, the Group entered into a fuel offtake agreement for 2025 with a subsidiary of Macquarie
Bank Ltd. ("Macquarie"). Through this new agreement, Macquarie owns the diesel in the Ekati fuel tanks and
supplies diesel to Ekati as it is required. This agreement provides a mechanism that enables the Group to better
manage the levels of working capital and reduce seasonal volatility of its operating cash outflows. In February
2025, the Group received $39.2 million from Macquarie and will make monthly payment to Macquarie based on
fuel consumption.
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Annual Report | Year Ended 31 December 2024
DIRECTORS’ DECLARATION | 76
Consolidated entity disclosure statement
Entity name
Body corporate,
partnership or trust
Place
incorporated/formed
% of share
capital held
directly or
indirectly by the
Company in the
body corporate
Australian
or foreign
tax
resident
Jurisdiction
for foreign
tax
resident
Burgundy Diamonds Mines
Body corporate
Australia
Australia
N/A
Arctic Canadian Diamond
Company Ltd.
Body corporate
Canada
100%
Foreign
Canada
Arctic Canadian Diamond
Marketing N.V.
Body corporate
Belgium
100%
Foreign
Belgium
BDM Del Peru S.A.C.
Body corporate
Peru
100%
Foreign
Peru
Burgundy Diamonds
(Canada) Limited
Body corporate and a
participant in the Naujaat
Project Joint Venture
Canada
100%
Foreign
Canada
Burgundy Diamonds SARL
Body corporate
France
100%
Foreign
France
Basis of preparation
Key assumptions and judgements
Determination of Tax Residency
Section 295 (3A) of the Corporation Acts 2001 requires that the tax residency of each entity which is included in the
Consolidated Entity Disclosure Statement ("CEDS") be disclosed. In the context of an entity which was an Australian
resident, “Australian resident” has the meaning provided in the Income Tax Assessment Act 1997. The
determination of tax residency involves judgment as the determination of tax residency is highly fact dependent
and there are currently several different interpretations that could be adopted, and which could give rise to a
different conclusion on residency. In determining tax residency, the consolidated entity has applied the following
interpretations:
• Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the
Commissioner of Taxation’s public guidance in Tax Ruling TR 2018/5.
• Foreign tax residency
The consolidated entity has applied current legislation and where available judicial precedent in the determination
of foreign tax residency. Where necessary, the consolidated entity has used independent tax advisers in foreign
jurisdictions to assist in its determination of tax residency to ensure applicable foreign tax legislation has been
complied with.
Branches (permanent establishments)
Foreign branches of Australian subsidiaries are not separate level entities and therefore do not have a separate
residency for Australian tax purposes. Generally, the Australian subsidiary that the branch is a part of will be the
relevant tax resident, rather than the branch operations. Additional disclosures on the tax status of Australian
subsidiaries having a foreign branch with a taxable presence in that jurisdiction have been provided where relevant..
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Annual Report | Year Ended 31 December 2024
DIRECTORS’ DECLARATION | 77
Directors’ Declaration
In the opinion of the directors of Burgundy Diamond Mines Limited (the "Company"):
1. a) the consolidated financial statements and notes that are set out on pages 25 to 75 and the Remuneration
report on page 13 to 22 in the Directors’ report, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 31 December 2024 and of its performance
for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2. The consolidated entity disclosure statement as at 31 December 2024 set out on page 76 is true and correct.
3. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
chief executive officer and chief financial officer for the financial year ended 31 December 2024.
4. The directors draw attention to Note 2 to the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Dated on 31st of March 2025
Michael O’Keeffe
Chair
For personal use only
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
Independent Auditor’s Report
To the shareholders of Burgundy Diamond Mines Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Burgundy Diamond Mines Limited (the
Company).
In our opinion, the accompanying Financial
Report of the Company gives a true and
fair view, including of the Group’s
financial position as at 31 December 2024
and of its financial performance for the
year then ended, in accordance with the
Corporations Act 2001, in compliance with
Australian Accounting Standards and the
Corporations Regulations 2001.
The Financial Report comprises:
• Consolidated Statement of financial position as at 31
December 2024
• Consolidated Statement of profit or loss and other
comprehensive income, Consolidated Statement of
changes in equity, and Consolidated Statement of
cash flows for the year then ended
• Consolidated entity disclosure statement and
accompanying basis of preparation as at 31
December 2024
• Notes, including material accounting policies
• Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during
the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
For personal use only
Material uncertainty related to going concern
We draw attention to Note 2(b), “Going concern” in the Financial Report. The conditions disclosed in
Note 2(b), indicate a material uncertainty exists that may cast significant doubt on the Group’s ability
to continue as a going concern and, therefore, whether it will realise its assets and discharge its
liabilities in the normal course of business, and at the amounts stated in the Financial Report. Our
opinion is not modified in respect of this matter.
In concluding there is a material uncertainty related to going concern, we evaluated the extent of
uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of
going concern. Our approach to this involved:
•
Assessing the Group’s cash flow forecasts from operations and plans to address going
concern, in particular the ability to achieve forecast revenue and ability to obtain alternate
sources of finance when and if required; and
•
Determining the completeness of the Group’s going concern disclosures for the principle
matters casting significant doubt on the Group’s ability to continue as a going concern, the
Group’s plans to address these matters, and the material uncertainty.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we
have determined the matter described below to be the Key Audit Matter.
Impairment of non-financial assets ($151.6m)
Refer to Note 12 to the financial report
The key audit matter
How the matter was addressed in our audit
The Group has concluded that there were
indicators of impairment of the Rough Diamond
Segment assets (CGU) given the decline in
diamond prices and the deficiency of the
Group’s market capitalisation compared to its
net assets at 31 December 2024. As a result,
and in accordance with the accounting
standard, the Group is required to assess the
recoverable amount of each CGU.
The impairment of non-financial assets is a key
audit matter due to:
•
the inherent complexity associated with
auditing the forward-looking assumptions
incorporated in the Group’s “fair value less
Our procedures included:
•
Working with our specialists, we considered
the appropriateness of the fair value less costs
of disposal (FVLCD) method applied by the
Group to perform the test for impairment
against the requirements of the accounting
standards.
•
We assessed the integrity of the FVLCD
model used, including the accuracy of the
underlying calculation formulas.
•
We compared the forecast cash flows
contained in the FVLCD model to Board
For personal use only
costs of disposal” (FVLCD) model.
•
The judgement exercised by the Group in
applying FVLCD method to estimate the
value of the Group’s non-financial assets
contained within each CGU (the valuation);
and
•
The Group’s FVLCD model is internally
developed and use a range of internal and
external data as inputs. The key
assumptions in the Group’s FVLCD models
include forecast production volume and
diamond prices, foreign exchange rates,
mineral resources and discount rates.
These forward- looking assumptions may
be prone to greater risk for potential bias,
error and inconsistent application, therefore
necessitating additional scrutiny by us, in
particular to address the objectivity of
sources used for assumptions, and their
consistent application.
•
The Group recorded an impairment charge
of $151.6 million on the carrying value of
property, plant and equipment assets
during the year. The significance of this
balance further increased our audit effort in
this key audit area.
We involved valuation specialists to supplement
our senior audit team members in assessing
this key audit matter.
approved forecasts.
•
We assessed the Group’s allocation of
corporate assets to CGUs for reasonableness
and consistency based on the requirements of
the accounting standards.
•
We assessed the Group’s determination of
CGU assets for consistency with the
assumptions used in the forecast cash flows
and the requirements of the accounting
standards.
•
We compared forecast growth rates during
the forecast period to published studies of
industry trends and expectations, and
considered differences for the Group’s
operations, stated plans and strategy. We
used our knowledge of the Group, their past
performance, business and customers, and
our industry experience regarding the
feasibility of these in the economic
environment in which the CGUs operate; and
assessed the Groups mineral resource
estimates and future production forecasts
against reported probable, proven and
indicated and inferred resources.
•
Working with our valuation specialists we
independently developed a discount rate range
considered comparable using publicly available
market data for comparable entities, adjusted
by risk factors specific to the Group and the
industry it operates in.
•
We compared the forecast foreign exchange
rates to published views of market
commentators on future trends.
•
We considered the sensitivity of the model by
varying key assumptions, such as forecast
growth rates, mineral resources and discount
rates, within a reasonably possible range. We
did this to identify those assumptions at higher
risk of bias or inconsistency in application and
to focus our further procedures.
•
We recalculated the impairment charge
against the recorded amount disclosed;
•
We assessed the Group’s analysis of the
market capitalisation shortfall versus the total
recoverable amount of all CGUs. This included
For personal use only
consideration of the market capitalisation
range implied by recent share price trading
ranges, to the Group’s latest internal
enterprise valuation model.
•
We assessed the disclosures in the financial
report using our understanding obtained from
our testing and against the requirements of
the accounting standards.
Other Information
Other Information is financial and non-financial information in Burgundy Diamond Mines Limited’s
annual report which is provided in addition to the Financial Report and the Auditor’s Report. The
Directors are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report in accordance with the Corporations Act 2001, including giving
a true and fair view of the financial position and performance of the Company, and in
compliance with Australian Accounting Standards and the Corporations Regulations 2001
• implementing necessary internal control to enable the preparation of a Financial Report in
accordance with the Corporations Act 2001, including giving a true and fair view of the
financial position and performance of the Company, and that is free from material
misstatement, whether due to fraud or error
• assessing the Group and Company’s ability to continue as a going concern and whether the
use of the going concern basis of accounting is appropriate. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
For personal use only
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
• to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
• to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/media/bwvjcgre/ar1_2024.pdf
This description forms part of our Auditor’s Report.
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report
of Burgundy Diamond Mines Limited for
the year ended 31 December 2024,
complies with Section 300A of the
Corporations Act 2001.
Directors’ responsibilities
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 13 to 22 of the Directors’ report for the year
ended 31 December 2024.
Our responsibility is to express an opinion as to whether
the Remuneration Report complies in all material
respects with Section 300A of the Corporations Act
2001, based on our audit conducted in accordance with
Australian Auditing Standards.
KPMG
Matthew Hingeley
Partner
Perth
31 March 2025
For personal use only
Annual Report | Year Ended 31 December 2024
CORPORATE GOVERNANCE STATEMENT | 85
Corporate Governance Statement
The Board of Directors of Burgundy Diamond Mines Limited is responsible for the corporate governance of the
Company. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders
by whom they are elected and accountable. The Board continuously reviews its governance practices to ensure
they remain consistent with the needs of the Company.
The Company complies with each of the recommendations set out in the Australian Securities Exchange Corporate
Governance Council’s Corporate Governance Principles and Recommendations 4th Edition (“the ASX Principles”).
This statement incorporates the disclosures required by the ASX Principles under the headings of the eight core
principles. All of these practices, unless otherwise stated, are in place.
The Company’s Corporate Governance Statement and policies can be found on its website at
www.burgundydiamonds.com.
For personal use only
For personal use only
Annual Report | Year Ended 31 December 2024
ASX ADDITIONAL INFORMATION | 87
ASX Additional Information
Additional information required by the Australian Securities Exchange and not shown elsewhere in this Annual
Report is as follows. The information is current as of 12 March 2025.
1.
Fully paid ordinary shares
• There is a total of 1,421,701,987 fully paid ordinary shares on issue which are listed on the ASX.
• The number of holders of fully paid ordinary shares is 2,077.
• Holders of fully paid ordinary shares are entitled to participate in dividends and the proceeds on winding
up of the Company.
• There are no preference shares on issue.
2.
Distribution of fully paid ordinary shareholders is as follows:
Holding Ranges
Holders
Total Units
% Issued Share Capital
above 0 up to and including 1,000
64
4,273
0.00%
above 1,000 up to and including 5,000
318
1,017,845
0.07%
above 5,000 up to and including 10,000
242
2,009,194
0.14%
above 10,000 up to and including 100,000
831
34,113,130
2.40%
above 100,000
622
1,384,557,545
97.39%
Totals
2,077
1,421,701,987
100.00%
3.
Holders of non-marketable parcels
Holders of non-marketable parcels are deemed to be those whose shareholding is valued at less than A$500.
There are 680 shareholders who hold less than a marketable parcel of shares, amount to 0.26% of issued
capital.
4.
Substantial shareholders of ordinary fully paid shares
The following holders have notified that they are substantial holders of the company at 31 December 2024:
Holding Balance % of Issued Capital
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
248,052,956
17.45%
ARCTIC CANADIAN DIAMOND HOLDING LLC
129,230,769
9.09%
BNP PARIBAS NOMINEES PTY LTD
109,843,792
7.73%
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
76,378,529
5.37%
5.
Restricted Securities
None
6.
Share buy-backs
There is currently no on-market buyback program for any of BDM listed securities.
7.
Voting rights of Shareholders
All fully paid ordinary shareholders are entitled to vote at any meeting of the members of the Company and
their voting rights are on:
• Show of hands – one vote per shareholder; and
• Poll – one vote per fully paid ordinary share.
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Annual Report | Year Ended 31 December 2024
ASX ADDITIONAL INFORMATION | 88
8.
Major Shareholders
The Top 20 largest fully paid ordinary shareholders together held 62.07% of the securities in this class and are
listed below:
Position
Holder Name
Holding
% IC
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
251,555,833
17.69%
2
ARCTIC CANADIAN DIAMOND HOLDING LLC
129,230,769
9.09%
3
BNP PARIBAS NOMINEES PTY LTD
113,953,712
8.02%
4
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
71,368,120
5.02%
5
CITICORP NOMINEES PTY LIMITED
54,357,867
3.82%
6
PROSPECT AG TRADING PTY LTD
54,353,535
3.82%
7
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
35,397,133
2.49%
8
BASS FAMILY FOUNDATION PTY LTD
22,376,843
1.57%
9
METECH SUPER PTY LTD
22,000,000
1.55%
10
BNP PARIBAS NOMINEES PTY LTD
15,986,386
1.12%
11
PALM BEACH NOMINEES PTY LIMITED
14,658,208
1.03%
12
WYNNCHURCH STRATEGIC OPPORTUNITY LP (A DELAWARE LP)
14,583,334
1.03%
13
UBS NOMINEES PTY LTD
11,932,994
0.84%
14
9064-6316 QUEBEC INC
11,041,667
0.78%
15
ROBDUET 2 PTY LTD
11,000,000
0.77%
16
MR DAVID BRIAN ARGYLE
10,800,000
0.76%
17
SANDY DOG PTY LTD
10,760,000
0.76%
18
MR ANDREW GRANTON BROWN
9,600,000
0.68%
19
SANDY DOG PTY LTD
9,026,930
0.63%
20
GREEN LITE ELECTRICAL SERVICES PTY LTD
8,400,000
0.59%
Totals
882,383,331
62.07%
Total Issued Capital
1,421,701,987
100.00%
9.
Unlisted Options
• 1,000,000 options expiring 5 August 2026, exercisable A$0.26
• 809,842 options expiring 30 August 2027, there is no consideration payable for the options.
• 10,000,000 options of which 5,000,000 options expire 1 July 2026, 3,000,000 options expire two years
after the date on which Group's carat production in fiscal 2026 exceeds 3,000,000 carats and 2,000,000
options expire two years after the date on which Group's carat production in fiscal 2027 exceeds
3,000,000 carats, exercisable A$0.30
• 12,065,136 options expiring 30 November 2028, exercisable A$0.18
• 12,360,994 options expiring 31 March 2029, exercisable A$0.21
10. Tax Status
The Company is treated as a public company for taxation purposes.
11. Franking Credits
The Company has no franking credits.
12. Business Objectives
Burgundy Diamond Mines Limited has used cash and cash equivalents held in a way consistent with its stated
business objectives.
For personal use only
Annual Report | Year Ended 31 December 2024
ASX ADDITIONAL INFORMATION | 89
13. Securities Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the
Australian Securities Exchange Limited under Security Code BDM.
14. Registered Office
Level 25, Suite 32
108 St Georges Terrace
Perth WA 6000
Telephone: 08 6559 1792
Website: www.burgundydiamonds.com
15. Company Secretary
Brad Baylis
16. Share Registry
Automic Share Registry
Level 2, 267 St Georges Terrace
Perth WA 6000
Telephone: 1300 288 664
17. Company Assets
Project
Location
Area
Nature of
Interest
Holder
Interest at
beginning of
period
Interest at
end of the
period
La Victoria
Project
Peru
~80km2
Farm-in
Agreement
Eloro Resources
Limited
18%
18%
Naujaat Project
Nunavut,
Canada
~127km2
Earn-in
Agreement and
40% interest
North Arrow
Minerals Inc.
40%
40%
For personal use only
For personal use only