Good morning, ladies and gentlemen. Welcome to the annual general meeting of Burgundy Diamond Mines Limited. I think it's close enough to 11:00 A.M. now, the nominated time for commencement. For those of you that don't know me, my name's Stephen Dennis, currently Chairman for the last time today. We will talk about that later, and I'll chair the meeting today. Registrar is outside the room. You should be registered, and sign the attendance register. A quorum of shareholders is present, and I declare the meeting open. Starting with introductions, fellow directors. First of all, on my immediate right is Peter Ravenscroft. He's our Managing Director. On Peter's right, is Mr. Kim Truter, who will be taking over from me at the end of this meeting as Chairman.
On Ken's right, Jeremy King, a Non-Executive Director, who like me, is also stepping back today. Opposite me, our company secretary and Chief Financial Officer, Mr. David Edwards. Both Michael O'Keeffe and Marc Dorion could not be here tonight. As most of you are aware, they're on the other side of the world and they send their apologies. Proxies have been received. As we put up each resolution today, you can see the proxies for, against, and abstaining for each resolution. Where a valid proxy vote's been given to me as Chair without voting instructions, I'll be voting in favor of all of those resolutions today.
As is customary now with annual general meetings, there will be a poll conducted for each resolution, and that poll will be undertaken today by Automic, our share registrars, and that will occur after resolution 2. We won't actually know the outcome of the poll until after the meeting, and it'll be posted on the site later today, on the ASX platform later today. After the meeting, Peter's going to make a presentation. I think that as I understand, that presentation has also been released through the ASX. Peter will be making that presentation. You will have the opportunity to ask questions if you have any as we step through the four resolutions.
You'll also have the opportunity to ask questions of Peter during and after his presentation. Just follow up with me, if you wouldn't mind, we'll get through the formalities. The notice of the meeting explanatory statement was released on November 9th, and shareholders have seen it. It's been circulated, and I take the notice as read. As I mentioned, the resolutions will appear on the screen. You've had the opportunity to ask questions. First item is to receive the financial statements and the reports, even though we have all of these here. They're available to answer any questions you have in relation to the accounts and the directors' report. That's the directors' report for statements, the independent audit report for the year ending June 30.
Are there any questions in relation to those statements or reports? If not, I shall move to resolution one, the first formal resolution, which is the adoption of the remuneration report. This is actually a non-binding resolution. You can see on the screen, there is proxies, sorry, for, against, and abstaining. Are there any questions pertaining to this resolution? If not, I'll ask shareholders to poll on this resolution. We'll conduct that at the end of the meeting. Resolution Number 2 is the reelection of Marc Dorion, who, as I mentioned, is not here today. You can see the proxies for, against. Any questions relating to this resolution? If not, we'll conduct a poll on this resolution. Resolution 3 is a special resolution.
We utilized our both our 15 million 10% shareholder capacity recently, and so this freshens up that placement capacity. You can see resolutions for and against and abstaining and discretionary. Any questions on the resolution? If not, we'll conduct a poll in relation to the resolution. Resolution 4 relates to the ratification of prior issue of shares as part payment for Translon when we acquired the Ohanda diamond project. See the proxies for and against. Any questions on the resolutions? If not, we'll move to a poll. I'll ask Automic now to conduct the poll. If you wouldn't be kind enough. I thought I only had to sign this. Have you got that sort of.
Yeah, it's all good.
Okay. You let me know when.
All right. Yeah.
All right.
Ladies, if there are any online, and gentlemen, that concludes today's notice of a general meeting. I take it that there's no further questions. Just before I close the meeting, as I mentioned before, this is the last meeting that I'll be chairing, and I'm also stepping back as chairman from the board. I've noted today here a couple of formers from the past to present. Former managing director, a great Stephen, Mr. Dickinson, former director, Mr. Bradley. I'd just like to thank all of them, including Jeremy, for their support over what I think has been, if I'm not mistaken, about a seven-year journey from when Andrew first rang me and asked me to get in. Sorry, it's 9:00 A.M. I'm just being short. One more time. Thank you to them. I'd also like to wish both Peter and Tim who'll be taking over from me after today as chair very best on the way forward with the company. Certainly, I'll be remaining interested on the sidelines as a hopefully significant shareholder. All the best with the company. I'll now declare the meeting closed. I'll hand over to Peter, and he'll have a few words for the company update.
Great. Thanks, Stephen, and good morning to everybody in the room and online. I'm gonna give a very quick update. Probably try and keep it to 20 minutes. We did give the market a bit of an update on progress a couple of months ago, so I don't want to cover over too much of that again. Today is just a broader review of our progress over the last 12 months - 18 months. Then more of a focus on our more recent activities going downstream in the diamond industry. Particular focus on the announcement we made yesterday on a collaborative sales agreement that we've signed with a high-end jeweler in Paris. I'll finish off with a brief update of our operational projects and exploration projects. Disclaimer on the screen, normal language there.
I'll move on to a quick snapshot of the company. Won't spend too much time here, but just some highlights. World-class management team and board. Focus on fancy color diamonds. We have, in the last six months, been very focused on developing what I'm calling an end-to-end business, where we'll have a fairly unique approach in the diamond sector on operating all the way from exploration of diamonds all the way through to polished diamond production and sales. Another key feature of our intention is operational production in 2022, so within the next twelve months. Alongside of that, some activities to continue building a balanced portfolio of the best diamond projects in the world. We completed a AUD 50 million capital raise in July 2021.
On the slide which I'm showing, there are some metrics on where we are. Market cap yesterday somewhere around AUD 80 million. Important management and director ownership 17%. Those numbers are pretty healthy. I would like to add some comments there on some of the key people, certainly the remaining board members. Michael O'Keeffe needs no introduction. Tim Treadgold, we've welcomed many times before, taking over as Chairman of the company and mining background. What I wanted to add to that was in recent months, since October, a really important strengthening of our management team. First off, our CFO, David Edwards, who joined us in October, bringing a lot of rigor to the management of the company.
We've appointed a VP of Sales and Marketing, Drew Birrell, who's currently based in Sydney and will be moving to Perth when we're allowed to bring him into Western Australia. Our VP Operations, appointed very recently, Jeremy Taylor, is a very experienced operator from large companies and smaller companies and a long career in diamonds. Jeremy is currently based in South Africa and will again be moving to Perth when we're allowed some actual travel arrangements for that. We've really strengthened the team. I'd just like to move on to the next slide and just do a bit of a review of where we've come out over the last 12 months-18 months. Again, I'm just gonna pick up a couple of highlights here. We've really positioned ourselves for the next phase of growth.
Back in 2020, we rebranded the company, gave it the name Burgundy Diamond Mines. We've had a couple of capital raises. We have significant financial capability at the moment. We're expanding the board and management team. Moving on to the issue of integrated downstream diamond business. We very quickly came to a realization that cash flow was what we needed to get this company moving quicker. We focused on operational opportunities, and that led us very quickly into opportunities of taking the diamonds and doing downstream work on those diamonds and gaining more value. I'll spend a bit of time on that in a later slide. We still are very involved in our exploration and development activities, and I'll give an update of that at the end of the presentation.
We're looking at expanding that portfolio as we speak, and we have done a little bit of expansion of that over time. On the next slide, I just want to talk about the evolution of the strategy. As I said, we have now made ourselves into an end-to-end diamond business. The old term in MBA speak is vertical integration. I'm going back in time, but I like that word. We really are operating from the front end of exploration and product development through the production of rough diamonds, which we'll be doing from operations we're gonna talk about. We've acquired capability for cutting and polishing our own diamonds, which opens the avenue for sale of polished diamonds, and we've been doing some very interesting work in the marketing of those diamonds. I think this is a game-changing moment for the company.
This has taken us into a space which is very different from any other diamond company in the way that we're doing it. I think, you know, we're looking at even going further downstream, which I'll talk about in the next slide. Why would we make this move and extend downstream? Well, the graph on this I talked about before, but I'll go through it in some detail. This is a recognized breakdown of what happens to revenue generated across the diamond sector on an annual basis. This is 2019 numbers. 30% of the revenue generated by producers of rough diamonds, the mining companies. A further 11% of revenue is generated from people cutting and polishing diamonds and selling polished diamonds. That adds up to 18% of the value chain.
The other 82% is downstream in the jewelry industry. Jewelry manufacturing accounts for 33% of the value, and nearly 50% comes from the retail sale of jewelry. We made a decision back in the second quarter of this year to take up the first two boxes. We said we are able to acquire the capability to cut and polish our own diamonds and sell polished diamonds. What that does is takes our potential value from the nominal 7% up to a total of 18%. A big increase in value. Excitedly, what we've done in the last couple of weeks is found avenues and signed deals that take us into the rest of that space. Where the value uplift is really quite significant.
I'll talk quite a lot about that in a single slide. Moving on to look at what we've been doing since we made this decision to go downstream. The key there is bringing downstream our own mining operations. That is the end game. As a fully integrated diamond company, we want to be producing our own diamonds. In the interim, until we can get there, and I'll talk about timing on that. Until we get there, what we've been doing is buying fourth- and fifth-quality rough diamonds. We purchased some a couple of months ago, which we talked about and announced to the market. We have now signed a deal on the sale of those diamonds, and we're busy planning the cutting and polishing of them right now.
Subsequent to that, we've actually purchased some more diamonds recently, which we haven't announced yet. Once we have those diamonds in our offices in Perth, I'll be in position to tell the market what we've done there. We're moving pretty rapidly down that pathway of building inventory and applying our cutting and polishing capability to produce the value that we intend. Our cutting and polishing, we acquired in Perth, some facilities, secure premises, machinery, equipment, and a very experienced team of people, which is now up and running. They're waiting for diamonds to be cut and polished. I spent the morning in that office. A lot of enthusiasm to be able to demonstrate this and get value back from those stones. We're moving on that as fast as we can.
We may need to expand that in-house capability as we build inventory and get higher volumes. On the marketing front, we've been looking at a number of ways of taking our polished goods to market, and we've been focused in our discussions on partnerships and relationships with selected jewelry houses. You know, we're working with them in a fairly small space in terms of fancy color diamonds. We're working with people who are focused on that sector. That is all coming to our activities on developing a luxury brand. That brand development is advancing well. We're looking at the launch of that brand sometime in the first half of next year. It will be based in Paris.
We have very recently set up a French subsidiary called Burgundy Diamonds, which will be looking after that aspect of things offshore for us. Through our deal, which I'm about to speak about with Bäumer Vendôme, we've actually been able to house that subsidiary in the Place Vendôme in Paris. This is a really significant move for a company going to luxury diamond sales. The Place Vendôme is the heart of luxury goods in Paris. Paris is recognized as being the center of the world for ultra-luxury branding. It's a very significant position to be in, to have a presence and a facility right in the heart of that. That's come from the deal we've done, which I'll be talking about now. If we go onto the next slide. This is the arrangement we announced yesterday.
I think just to give a little color around this, the important part of this was finding a partner who had a special interest in fancy color diamonds, who was, you know, a world-leading design jeweler. Lorenz Bäumer is the principal of this firm who has an incredible track record of success and is recognized as one of the leaders in the field. Beyond that is Kim Truter, a wonderful gentleman named Andy, and the two companies hit it off very quickly, and we were very pleased yesterday to sign this partnership agreement with them. The partnership is actually it's a framework. It's an operating principle of how we're gonna work together. What it allows is the signing concurrently of a sale agreement over potential diamonds.
Which also, a couple months ago, or a month ago, we purchased the trademarks to the market. We purchased one of the Argyle Pink Diamonds hero stones from their last auction of those stones. It was last tender. We were able to secure one of those stones after the tender. One of the last five hero stones ever produced by Argyle. What we're intending to do with that stone is use that as the centerpiece of our branding, use it in a promotional sense, and we will sell that stone at some point. At the moment, its value to us is in actually representing what we are as a brand. The linkage there is quite interesting because that stone is a cut stone, and we won't necessarily ever be buying any more polished stones because we're polishing them ourselves.
The people who polished that stone work for Burgundy. It's really pumped up. It's sitting, as I speak, in our secure premises in Perth, where it was cut and polished only months ago. It's a nice linkage back to the past. It's a beautiful stone. No doubt about that, and of huge value. Our intention is to add to the value of that stone by the activities that we will engage with that. The first people who are going to be using that stone in a promotional sense are going to be in Bali. Just to give a bit of color around the collaborative sale agreement. What we've done here is we've set up. Of course, we won't share the details of that at the moment.
We've set up an arrangement whereby each party manages its own cost. Going to this, we provide the diamonds, we provide a lot of the work around the diamonds. They provide the design, the manufacture, the marketing and their networks. We pool together what we put in, and we split the proceeds in an equitable fashion. What it does in a nutshell is, if you look at the graph on the bottom right-hand corner of that slide, it allows us access into those last three blocks, and significant access into those last three blocks. It really taken us beyond where we were a short while ago. We're now talking about going all the way to retail sale of jewelry, and that is the real source of value in this industry.
I think that's all I wanted to say about our downstream activities. As I've said at the outset, I just give a brief update on some of our project activities. The most important of those is the Ellendale Diamond Project in Western Australia. We did an option deal over this in March of this year. We've been working hard with some technical work and some work on the ground since then. Our intention there, the project is basically split into two pieces. If you look at the map on the slide, there is, to the northwest, there are two long stripes. That is the Blina alluvial deposit. The other blocks on the right-hand side of that map are the old Ellendale leases.
The old Ellendale leases are still mining leases under application, and we are in discussion with the local Bunuba people over native title agreements on those leases. That's progressing well. I'm attending a meeting next week in the Kimberley to advance those discussions, and we hope to be able to bring those into our production plan at some point. At the moment, we're focused on the Blina deposit, which we have full access to. We are bringing in the bulk sampling plant, which we've already constructed. It will be arriving in Western Australia in January. We'll have that on site as soon as the weather permits at the end of the wet season, going into a bulk sampling program and then transform that into mining production by the end of the year.
The Ellendale projects' stated intent is to be producing rough diamonds from Ellendale by the end of 2022. We're still on track to do that. Our other key project is in Canada, the Naujaat project. This one—it's one of our first transactions we did in 2020. We entered into an earning arrangement with the owners of that project, North Arrow Minerals, a TSX-V-listed company. The first step on that was to do a large bulk sample from that project, which we funded to the CAD 306.5 million. That allows us, once we've completed that, it gives us 40% ownership of the project. That bulk sample was started in June this year.
We had a bit of a delay last year with COVID, but we got back on the ground in June 2021. The sample extraction was completed ahead of time, ahead of budget. The bulk sample was then transported to Saskatchewan in Canada, where it's currently being processed. The pictures on that slide are quite interesting. Just the sheer magnitude of that sampling exercise. The picture there showing all of those 2,500 sample bags, which were extracted, and helicoptered to the port, loaded onto a boat, taken to Montreal, loaded onto trucks and taken to Saskatchewan. 2,500 bags of samples. No small feat. They've all arrived in Saskatchewan safely and are some way through processing those. We've started seeing diamonds already.
We'll be starting announcing results on those probably in January. So that's going well. The intention there is to demonstrate the size distribution of the colored population in those, which is a fancy yellow, fancy orangey-yellow population of diamonds, which we believe will add significant value to the economics of the project. The intent of this bulk sample is to establish that to be able to make sure we invest. The last project update I would like to give is in Botswana. In Botswana, we're looking at greenfields grassroots exploration. On the map, you can see there we have a significant ground holding or access to ground in sort of diamond area of Botswana. We've done that through an agreement we have with a local private company called Diamond Exploration Strategies.
They in turn have done some commercial arrangements with Botswana Diamonds, which is a London-listed public company. Another relationship, which is shown in the red squares with a company called Kangaroo Diamonds, which is an ASX exploration company. We have access to large amounts of ground. We have a significant program of work, which we've talked about before. We started in March on a program of 15 targets. We're working our way through those. No discoveries yet, but as I've said before, this is exploration. This is what we do in exploration. We set ourselves up for success. We do the work, and exploration is a difficult game. We're confident that our portfolio still has significant value. We're working our way through that.
As we come to something that's significant on that, we'll be sure to be announcing that to the market. I'm still very confident. Botswana, to me, is the country in which to be doing this kind of work. Exploration is low cost. The prizes are huge. Botswana hosts the best diamond deposits on the planet. Just to finish off our presentation, ladies and gentlemen, giving an outlook into what will be happening. Reaching cash flow in financial year 2022 is still our forecasted aim, and we will be doing that through the sale of polished diamonds through the arrangements which we've talked about. The brand that we're launching in Paris will accelerate some of that, and we should be able to be selling some of those diamonds within that period.
The cutting and polishing moving ahead, as I said, at the moment on third-party stones. Once we get Ellendale into production, we will be cutting and polishing our own goods in addition to potential third-party production. Production of rough, which is really the name of the game, as I said, starting at Blina in the fourth quarter of 2022. In parallel with that, continuing our exploration and project development. The work at Ellendale will continue into the other leases beyond Blina. We still have a lot of geological work and planning work to be done there. The bulk sampling results are not yet. As I say, we'll define our next steps on that project, and we should have the full answers of that in the first quarter of next year.
Obviously, the Botswana project evaluation will continue. On top of that, we're not giving up on looking at other opportunities, and we're continuing to look for ways of adding value to this company. That's all I really wanted to say today. I'm quite happy to take questions from shareholders in the room. I think online that will be difficult. If anybody has questions, you know where to find us. Please submit them. We're happy to talk to anybody about that. For now, Stephen, thank you very much for the opportunity to update everybody.
Thanks, Peter. Any questions from the floor? As Peter mentioned, I don't think the facility is available online, unless really people do have any questions.
Maybe one. It's very clear that Peter's worked throughout the value chain, and it's greatly driving the full service with getting their bulk rough in. Can that supply continue? Even if it's lower value, there's a struggle perhaps on availability of other sourcing. Can you continue to provide bulk rough coming in?
Yeah. The short answer is yes. There are many sources of fancy colored diamonds. We've done a lot of work on understanding where the production is coming from and where there might be availability. We see plenty of possibility there. The important thing to me is to establish the model works. You know, I've had discussions with other producers and they say, "Well, we like your story. We'd love to sell with you but we can't supply the choice." We will get to that stage very quickly and we can demonstrate the output we're getting. What we're looking at there is to be able to have arrangements with other producers where we will involve them in the business. We're not looking to take this all for ourselves. We're saying that there's a win-win here.
There's a win for the jewelry company, there's a win for us, and there's a win for the producer as well. There's ways of sort of managing it that are very different.
Maybe following along on that. On the other hand, in the final resort, so to speak, some sort of value gone over the top end of luxury connecting in to Paris. Longer term, that's kind of like a one-year arrangement. Where do you see ultimately with the Ellendale supplying Burgundy brand? Would you or Andy be sort of selling retail in your own Fremantle or will it go more and more to Paris and luxury outlets?
Yeah. I think there's a number of different angles there, David. Our model is not to open retail stores. We will always be working in partnership with infrastructure that's in place or marketing arrangement with people, you know, do the business. We're looking at good collaborative relationships with them. The one we've done with Bäumer is an exclusive arrangement for 12 months. At the same time, we've been talking to other jewelry houses, and they will come in. In fact, even during the 12-month exclusivity, we may be producing more volume than Bäumer wants. They will have a first right of refusal if they're in production, but we can take it elsewhere if they don't wish to have it.
We have discussions going with people in London, other companies in Paris, of course, with high-end jewelry in New York we're talking to. We're looking ahead on that. I think, you know, obviously covering, like I said, a jewelry house such as Bäumer probably work out and manage the volume that we would want to manage. We will be extending that. The model we need to establish, and this is a good step to get that underway.
Great. Thanks, Stephen.
All right. Well, if there's no further questions, the meeting is already closed. Thanks everybody for coming along. If anyone's got subsequent questions, you know where to find Peter.
Thanks, Stephen.
Thank you.
Thank you, Stephen.