For personal use only
BURGUNDY DIAMOND MINES LIMITED
HALF-YEAR FINANCIAL REPORT
30 JUNE 2024
Half-Year Financial Report | 30 June 2024
Appendix 4D
Burgundy Diamond Mines Limited | ||||||
ABN 33 160 017 390 | ||||||
only | ||||||
Half-Year Report | ||||||
Current reporting period: | For the half-year ended 30 June 2024 | |||||
Prior corresponding period: | For the six month period ended 31 December 2023 | |||||
Results for announcement to the market | ||||||
% up/down | 30 June 2024 | 31 December 2023 | ||||
Total revenue from ordinary activities | US$'000 | (13%) | 223,714 | 257,484 | ||
use | ||||||
N t profit (loss) for the period attributable to members | US$'000 | 1,592% | 10,083 | (676) | ||
N t tangible assets per share | US$ | 9% | 0.12 | 0.11 |
Dividends
There were no interim dividends paid or declared during the half-year ended 30 June 2024 (Six month period ended 31 December 2023: $Nil).
personalExplanation of results
Refer to the review of operations contained in the directors' report of the Interim Financial Report for the half-year ended 30 June 2024 and the subsequent events.
Changes in controlled entities
The Group did not gain or lose control over any entities during the period.
Accounting standards used by foreign entities
All subsidiaries use International Financial Reporting Standards.
Information about review
The condensed consolidated interim financial statements for the half-year ended 30 June 2024 have been reviewed by the Company's auditors.
ForAdditional information supporting the Appendix 4D disclosure requirements can be found in the review of perations, condensed consolidated interim financial statements and accompanying notes.
Half-Year Financial Report | 30 June 2024
Contents
Corporate Directory .............................................................................................................................................................
Directors' Report ..................................................................................................................................................................
onlyLead Auditor's Independence Declaration .......................................................................................................................
Condensed Consolidated Interim Financial Statements ................................................................................................
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Loss .................................
Condensed Consolidated Statement of Financial Position ..................................................................................
Condensed Consolidated Statement of Changes in Equity .................................................................................
Condensed Consolidated Statement of Cash Flows .............................................................................................
Notes to the Condensed Consolidated Interim Financial Statements .........................................................................
useDirectors' Declaration ..........................................................................................................................................................
Independent Auditor's Review Report .............................................................................................................................
personalFor
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Half-Year Financial Report | 30 June 2024
Corporate Directory
Board of Directors
Michael O'Keeffe | Non-Executive Chair | ||
Kim Truter | Chief Executive Officer and Managing Director | ||
only | Non-Executive Director | ||
Marc Dorion | |||
Stephen Dennis | Non-Executive Director (Appointed 30 January 2024) | ||
Trey Jackson | Non-Executive Director (Appointed 30 January 2024) | ||
Jeremy King | Non-Executive Director (Appointed 1 April 2024) | ||
A | shul Gandhi | Non-Executive Director (Appointed 1 August 2024) | |
C | mpany Secretary | ||
Brad Baylis | |||
use | |||
R | gistered Office | ||
L | vel 25 | ||
South32 Tower | |||
108 St Georges Terrace | |||
Perth WA 6000 | |||
Telephone: | 08 6313 3945 | ||
Website: | www.burgundydiamonds.com | ||
personal | info@burgundydiamonds.com | ||
Email: |
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
L vel 5, 191 St Georges Terrace
Perth WA 6000
Telephone: 1300 288 664
For
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Half-Year Financial Report | 30 June 2024
Directors' Report
The Directors of Burgundy Diamond Mines Limited ("BDM" or "the Company") present their report, together with the condensed consolidated interim financial statements of the consolidated entity consisting of Burgundy Diamond Mines Limited and its controlled entities for the half-year ended 30 June 2024 ("the Period").
It is recommended that the Directors' Report be read in conjunction with the annual financial statements for the six month year ended 31 December 2023 and considered together with any public announcement made by the Company during the Period and up to the date of this report.
Directors
The names of the Company's directors in office during the financial period and at the date of this report are as
f llows. Directors held office for this entire period unless otherwise stated. | ||
only | Chair and Non-executive Director (appointed 15 June | 2017). |
Michael O'Keeffe |
Kim Truter
useMarc Dorion Jeremy King Stephen Dennis Trey Jackson Anshul Gandhi
Chief Executive Officer & Managing Director (appointed 17 November 2022) and previously non-executive director (appointed 22 September 2020).
Non-Executive Director (appointed 5 July 2020).
Non-Executive Director (appointed 1 April 2024). Non-Executive Director (appointed 30 January 2024). Non-Executive Director (appointed 30 January 2024). Non-Executive Director (appointed 1 August 2024).
Principal Activities
personalThe 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
During the period ended 30 June 2024, the focus of the Company was on continuing to optimise Ekati's current mine performance and extending mine life through extension of Misery Underground, Sable and Fox Underground opportunities, Fox high-value stockpile evaluation and underwater remote mining.
For the purpose of providing comparable information for the period 1 January 2023 to 30 June 2023, the Group has presented tonnes mined, ore processed, carats recovered, carat inventory on hand and carats sold by ACDC and ACDM NV for the period prior to acquisition by Burgundy.
During the period, a total of 5.5 million tonnes of ore and waste were mined, down 54% over the same period in 2023 (January to June 2023: 11.9 million tonnes) due to lower waste requirement in Sable open pit in 2024. Whereas a total of 2.6 million tonnes of ore were mined, up 18% over the same period in 2023 (January to June 2023: 2.2 million tonnes).
A total of 2.0 million tonnes of ore was processed through the process plant during the period, down 5% from the Forsame period in 2023 (January to June 2023: 2.1 million tonnes) largely due to more maintenance required during
ur annual processing plant shutdown period.
During the period, 2.4 million carats were recovered, down 4% versus the same period in 2023 (January to June 2023: 2.5 million carats) approximately in line with the decrease in tonnes processed. The Group ended the period with 1.3 million carats in ending inventory which is in line with the ending inventory at 30 June 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 cutting and polishing coloured Ekati diamonds at Burgundy's commercial facilities in Perth and 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.
DIRECTOR'S REPORT | 3
Half-Year Financial Report | 30 June 2024
Sales and Marketing
During the period, the Group held six rough diamonds auctions in our Antwerp office.
During the period, 2.4 million carats were sold, up 14% over the same period in 2023 (January to June 2023: 2.1 million carats) for total proceeds of $223.7 million up 5% over the same period in 2023 (January to June 2023: only$213.9 million). Despite broad softening in the polished diamond market, Ekati product has continued to generate strong buyer interest and high sell-through rates. The quality of the Ekati product and Canadian provenance remain highly valued in the market, supporting the Company's sales events in line with its vertically integrated business
model, which is focused on capturing margins across the full diamond value chain.
During the period, the Group's cutting and polishing facilities in Perth continued to operate at full capacity, refining third-party rough diamonds purchased in 2022 and 2023. The Group is developing its channel strategy and anticipates further sales collaborations in 2024.
Corporate
useBoard and Executive Appointments
On 30 January 2024, the Company announced that Mr. Stephen Dennis and Mr. Trey Jackson were joining the board of Burgundy Diamond Mines.
On 1 April 2024, the Company announced that Mr. Jeremy King re-joined the board of Burgundy Diamond Mines as a non-executive independent director. Mr. King is a founding director of a boutique advisory service in Perth, Australia that supports companies with legal, finance and corporate matters.
personalOn 23 July 2024, the Company announced that effective 1 August 2024, Mr. Anshul Gandhi will join the board of Burgundy Diamond Mines as a non-executive independent director. Mr. Gandhi is the Chief Executive Officer of Choron Group which owns 8.44% of equity interest in the Company.
Results of Operations
The net profit of the Group for the period ended 30 June 2024 was $10.1 million (Six month period ended 31 December 2023: net loss of $0.7 million). The significant increase in net profit reflects the income generated primarily from sale of rough diamonds recovered from Ekati Diamond Mine during the period, whereas prior year net loss arose from higher current tax expense resulting from adjustments between actual tax return and the tax provision due to change in tax filing currency and tax pool change from audits.
Financial Position
The statement of cash flows shows a decrease in cash and cash equivalents for the period ended 30 June 2024 of $37.3 million (Six month period ended 31 December 2023: net decrease of $30.7 million). During the period, the Group used $3.6 million in operating activities primarily in income tax payments of $26.0 million, working capital related timing adjustments arising from winter road payments offset by sales of rough diamonds. Cash used in financing activities of $4.7 million related to principal lease repayments. Cash used in investing activities of $29.1
Formillion mainly comprised of $26.8 million on purchase of property, plant and equipment and $2.2 million increase in restricted cash. As at 30 June 2024, the Group had funds of $56.9 million (31 December 2023: $94.4 million).
Dividends
No dividends have been paid or declared by the Company since the end of the previous financial period. No dividend is recommended 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.
DIRECTOR'S REPORT | 4
Half-Year Financial Report | 30 June 2024
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.
onlyLead Auditor's Independence Declaration
The lead auditor's independence declaration under Section 307C of the Corporations Act 2001 for the half-year ended 30 June 2024 has been received and included within these condensed consolidated interim financial statements.
useMichael O'Keeffe Chair
29 August 2024 personalFor
DIRECTOR'S REPORT | 5
For personal use only
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 review of Burgundy Diamond Mines Limited for the half-year ended 30 June 2024 there have been:
- no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and
- no contraventions of any applicable code of professional conduct in relation to the review.
KPM_INI_01
AR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01
KPMG | Matthew Hingeley |
Partner | |
Perth | |
29 August 2024 |
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 | 6
Half-Year Financial Report | 30 June 2024
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Loss
(expressed in thousands of United States dollars)
onlyRevenue Cost of sales
Gross margin
Other income
Selling and distribution expenses
General and administrative expenses
Other expenses
useOperating profit Finance expenses Finance income
Net finance costs
Fair value adjustment on consideration payable
Foreign exchange loss
Profit before taxes
Current tax expense
personalDeferred tax recovery Tax recovery (expense)
Net profit (loss)
Other comprehensive loss
Items that will not be reclassified to profit or loss Re-measurementof defined benefit obligation (net of tax recovery of $0.4 million for period ended 30 June 2024 - net of tax recovery of $0.3 million for period ended 31 December 2023)
Other comprehensive loss for the period, net of tax
Total comprehensive income (loss)
Profit (loss) per share for the period attributable to the owners: Basic earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
Six month | ||
Half-year ended | period ended | |
Note | 30 June 2024 | 31 December 2023 |
223,714 | 257,484 | |
(190,124) | (231,146) | |
33,590 | 26,338 | |
8,658 | 7,532 | |
(3,466) | (3,709) | |
(13,040) | (10,460) | |
(3,345) | (2,049) | |
22,397 | 17,652 | |
(16,225) | (14,155) | |
3,119 | 2,685 | |
(13,106) | (11,470) | |
(2,458) | 5,764 | |
(844) | (864) | |
5,989 | 11,082 | |
(2,685) | (14,951) | |
6,779 | 3,193 | |
4,094 | (11,758) | |
10,083 | (676) |
(669) | (505) | |
(669) | (505) | |
9,414 | (1,181) | |
4 | 0.71 | (0.05) |
4 | 0.71 | (0.05) |
ForThe Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Loss should be read in conjunction with the notes to the condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS | 7
Half-Year Financial Report | 30 June 2024
Condensed Consolidated Statement of Financial Position
(expressed in thousands of United States dollars)
onlyASSETS Non-current assets
Property, plant and equipment
Other non-current assets
Total non-current assets
Current assets
Inventory and supplies
Other current assets
Trade and other receivables
useCash and cash equivalents
Total current assets
Total assets
EQUITY
Contributed equity
Reserves
Accumulated losses
personalTotal equity
LIABILITIES
Non-current liabilities
Loans and borrowings
Provision for make good
Contingent consideration
Consideration payable
Lease obligations
Employee benefit plans
Reclamation provisions
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Current portion of loans and borrowings Current portion of consideration payable Current portion of lease obligations
ForCurrent portion of employee benefit plans Tax payable
Total current liabilities
Total liabilities
Total equity and liabilities
Note | 30 June 2024 | 31 December 2023 |
232,215 | 238,518 | |
74,397 | 74,941 | |
306,612 | 313,459 | |
240,326 | 244,931 | |
7,363 | 4,262 | |
8,394 | 9,907 | |
56,946 | 94,426 | |
313,029 | 353,526 | |
619,641 | 666,985 | |
5 | 200,607 | 200,607 |
6,285 | 6,796 | |
(39,088) | (49,171) | |
167,804 | 158,232 | |
6 | 73,834 | 73,834 |
64 | 64 | |
7 | - | 7,111 |
23,228 | 25,935 | |
12,422 | 16,468 | |
8 | 4,763 | 3,828 |
231,695 | 236,204 | |
15,072 | 22,202 | |
361,078 | 385,646 | |
42,501 | 54,017 | |
6 | 22,883 | 22,304 |
9,483 | 10,844 | |
10,971 | 9,644 | |
8 | 2,319 | 354 |
2,602 | 25,944 | |
90,759 | 123,107 | |
451,837 | 508,753 | |
619,641 | 666,985 |
The Condensed Consolidated Statement of Financial Position should be read in conjunction with the notes to the condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS | 8