Lucara Diamond Revenue Falls in 2025 as Botswana’s Karowe Underground Project Requires Additional Funding
Canada-listed Lucara Diamond reported lower revenue and earnings for 2025 as the company continued advancing the underground expansion of its flagship Karowe Diamond Mine in Botswana, while warning that additional financing will be required to complete the project.
For the year ended December 31, 2025, Lucara sold 353,302 carats, down from 399,215 carats in 2024. Revenue declined to C$159.7 million, compared with C$203.9 million the previous year.
Net income from continuing operations fell to C$26.1 million, down from C$43.6 million in 2024, while operating margins narrowed to 52% from 61%, reflecting weaker diamond sales partly offset by lower operating costs.
Fourth-quarter revenue totalled C$34.5 million, significantly lower than the C$78.8 million recorded in the same period of 2024, when results were boosted by exceptional large-diamond recoveries.
Among the notable stones sold in 2025 was the 1,094-carat Seriti diamond, which generated an initial polished value of C$12 million, with an additional C$7.9 million recognised later in the year following the sale of the polished stones.
By comparison, 2024 revenue benefited from the sale of two major stones, the 549-carat Sethunya and the 1,080-carat Eva Star diamonds.
Operationally, the year marked a significant milestone for the Karowe Underground Project (UGP). Both the 776-metre production shaft and the 729-metre ventilation shaft reached their final depths during the year.
Lateral underground development continued across multiple levels, and the project surpassed 2,000 days without a lost-time injury.
During 2025, the mine produced 1.9 million tonnes of ore and processed 2.8 million tonnes, broadly consistent with the previous year. Operating costs per tonne processed decreased by 3% to $27.15 per tonne.
In the fourth quarter alone, 705,513 tonnes were processed at an average grade of 12.2 carats per hundred tonnes, producing 86,110 carats from direct ore feed.
The Karowe mine continued to yield large, high-value diamonds. A total of 772 “special” diamonds stones larger than 10.8 carats were recovered during the year, representing 7.1% of total recovered carats by weight
The company also recovered 31 diamonds larger than 100 carats, including three stones exceeding 1,000 carats, among them a 2,036-carat near-gem diamond and a 37.42-carat pink Type IIa diamond.
Capital expenditure on the underground project reached C$75.8 million in 2025, including C$20.3 million in the fourth quarter. Major work focused on shaft sinking and developing underground levels at 245 m, 285 m, 310 m and 335 m to connect the shafts and prepare access to the kimberlite orebody.
In December, Lucara awarded a lateral development contract to Group R Mining and Exploration Botswana to accelerate underground infrastructure development.
An updated feasibility study released in January increased the total forecast cost of the Karowe Underground Project to C$779.2 million, about 14% higher than the July 2023 estimate.
By the end of 2025, C$469.4 million had already been spent, with a further C$82.3 million committed but not yet expended. First underground production is now expected in the first half of 2028, with the mine’s life extended to 2038.
Lucara ended 2025 with C$31.9 million in cash and C$33.6 million in working capital. Its C$190 million project finance facility and C$30 million working capital facility are fully drawn.
In January 2026, the company completed a C$165 million equity financing and secured amendments to its cost overrun reserve account requirements through a waiver agreement with lenders.
Despite these measures, the company warned that existing liquidity will not be sufficient to meet the revised cost-to-complete estimate for the underground expansion. Management indicated that Lucara is unlikely to comply with its cost-to-complete covenant by July 15, 2026, unless additional funding is secured or lenders grant further waivers or extensions. The company acknowledged that these conditions raise significant uncertainty about its ability to continue as a going concern.
Looking ahead to 2026, Lucara expects diamond revenue of C$100 million to C$130 million, with 340,000 to 360,000 carats projected to be recovered and sold.
The company plans to process 2.6 million to 2.9 million tonnes of ore, largely from stockpiles, while allocating up to C$110 million for the underground project and up to C$11.5 million for sustaining capital.
