Lucara Diamond Strengthens Balance Sheet as Karowe Underground Project Advances Toward 2028 Production
Lucara Diamond Corporation has reported a “transformational” first quarter, driven by the successful completion of equity and bond financing for its Karowe underground project (UGP) in Botswana.
The funding milestone has significantly strengthened the company’s balance sheet and positioned it for long-term value creation.
For the three months ended March 31, Lucara recorded revenue of US$21.8 million, reflecting a higher proportion of stockpile processing as unseasonal weather disrupted open-pit mining operations during the quarter.
The company noted that stockpile material is inherently variable in grade and quality, which impacted diamond recoveries and overall revenue performance during the period.
Open-pit mining resumed on March 26 and is expected to continue until later in the year.
Operating costs remained tightly controlled, with a cost of US$24.74 per tonne processed, despite inflationary pressures and transitional mining conditions.
Although quarterly revenue and production conditions were affected, Lucara maintained its full-year guidance, keeping revenue expectations unchanged at between US$100 million and US$130 million.
The outlook is supported by the planned return to steady open-pit mining operations, with all other guidance parameters also reaffirmed.
Lucara President and CEO William Lamb described the quarter as a “pivotal milestone,” highlighting the successful financing of the Karowe UGP as a key step in strengthening the company’s financial position and enabling the development of one of the world’s most unique diamond assets.
He noted that the Karowe mine continues to demonstrate strong operational resilience and a unique value proposition, particularly in its production of large, high-value diamonds.
During the quarter, the recovery of a 36.92-carat blue diamond, alongside multiple other large stones from run-of-mine stockpiles, reinforced Lucara’s focus on premium-quality diamond production.
While global diamond market conditions remain mixed, Lamb said the company’s strategic emphasis on large stones positions it well to benefit from any improvement in high-value diamond demand.
“With steady progress on the underground project and continued operational execution, we are well positioned to unlock long-term value for shareholders,” he said.
Karowe Underground Project Update
Lucara’s updated feasibility study for the Karowe UGP confirmed a total project cost of US$779.2 million, including contingency. As of March 31, US$472.4 million had already been spent, with a further US$117.7 million committed.
The revised study incorporates updated construction progress, exchange rates, mine design adjustments, and refined geological and hydrological modelling.
From 2026 through to 2028, processing will continue using a combination of open-pit ore and stockpiled material until underground ore becomes available.
Underground Development Progress
The company said the project has been significantly de-risked following completion of major shaft sinking works in 2025, including a 776-metre production shaft and a 729-metre ventilation shaft.
The underground project has now recorded 2,249 lost-time injury-free days, with a total recordable injury frequency rate (TRIFR) of 0.54, below the target of 0.90, and a 12-month rolling TRIFR of 0.34.
Capital expenditure for the underground project in the quarter amounted to US$19 million, primarily directed toward shaft equipping, lateral development, and surface infrastructure.
Lateral development advanced 491 metres during the quarter, bringing total development to 1,245 metres, ahead of contractor handover milestones.
Meanwhile, shaft equipping at the production shaft has been completed to surface level, with installation of guides and structural components finalized.
The next phase includes installation of underground crushing systems, ore handling infrastructure, and additional development works, supported by newly mobilised contractors who began site activities at the end of March.
Lucara expects to process between 2.6 million and 2.9 million tonnes of ore in the full year, primarily from stockpiled material.
Stockpiles are expected to sustain mill feed until 2027, when underground development ore is scheduled to progressively replace them with higher-grade material. Full-scale underground production remains on track for the first half of 2028.
Capital expenditure for the underground project is expected to reach up to US$110 million this year, with ongoing focus on shaft equipping and lateral development.
Sustaining capital is estimated at approximately US$11.5 million, mainly for asset maintenance and tailings facility expansion.
Overall, Lucara said the Karowe underground project remains central to its long-term growth strategy, positioning the company for sustained production of high-value diamonds over the coming decade.
