Lucara Unearths 2,036-Carat Diamond at Karowe Mine, Faces Going Concern Risks
Lucara Diamond Corp, headquartered in Canada, has recovered its second diamond weighing more than 2,000 carats from the Karowe mine in Botswana—cementing the mine’s reputation for producing some of the world’s largest and most valuable stones, even as the company grapples with financial covenant breaches and uncertainty over its ability to continue as a going concern.
“The Karowe diamond mine continues to validate its world-class status with the recovery of a second diamond exceeding 2,000 carats,” said President and CEO William Lamb on Friday.
The 2,036-carat near-gem diamond, extracted from EM/PK kimberlite, ranks as the third-largest rough diamond ever discovered and the second-largest recovered in Botswana.
This kimberlite material is also the target of the Karowe Underground Project (UGP), which has now yielded seven of the largest natural diamonds on record.
In the second quarter, Lucara also recovered 242 “specials”—diamonds weighing more than 10.8 carats—representing 9.4% of the total carats from direct ore feed. These included 15 stones over 100 carats and two exceeding 200 carats.
Total diamond recovery for the quarter reached 85,024 carats. Lamb credited the results to both the asset quality and operational team performance, despite a “complex and ever-changing global environment.”
Lucara reported “strong” progress on the UGP, with milestones achieved in shaft sinking, station development, and lateral work.
The project marked over 2,000 days without a lost-time injury in July. The UGP is designed to access the highest-value portion of the orebody and reached the bottom of its production shaft in late July.
The company is refining its mine plan by reviewing ore extraction methods, geomechanics, and caving scenarios, while continuing scheduled development.
Lucara breached a financial covenant by missing a June 30 deadline to deliver an approved UGP financial model to lenders and failed to resolve the breach within the 30-day grace period.
As a result, under IFRS rules, the company reclassified its outstanding project facility as a current liability.
While lenders have not demanded early repayment, Lucara is seeking a waiver. The company has access to $96.7 million in additional liquidity—including $63 million from shareholder undertakings and $33.7 million from a cost overrun account, pending lender approval.
Management warned that current cash, working capital, and committed funding will not be sufficient to meet obligations over the next 12 months without new financing, raising “substantial doubt” over its ability to continue as a going concern.
Lucara posted $43.7 million in revenue for Q2 2025, up from $41.3 million a year earlier, driven by the sale of the 1,094-carat “Seriti” diamond to HB Antwerp for an initial polished value of $12 million. The final value will be determined once the polished stones are sold.
The company spent $13.6 million on UGP works in the quarter, including station development, lateral excavation, and infrastructure.
Upcoming Q3 activities include connecting the ventilation and production shafts at the 310-level, advancing lateral development toward kimberlite, and preparing for shaft equipping.
“As we transition from open-pit to underground operations, we remain focused on disciplined execution and strategic resource management,” Lamb said.
“Realising the full potential of our underground resource will require navigating both operational and financial challenges.”
