Lucara Diamond Corp. ("Lucara" or the "Company") today reports its results for the quarter ended September 30, 2025. All amounts are in U.S. dollars unless otherwise noted. PDF version
Q3 2025 HIGHLIGHTS
A total of 101,422 carats were sold, generating $51.2 million in revenue.
In August 2025, the Company recovered a 1,0151 carat non-gem diamond and a 37.42 carat near-gem pink Type IIa diamond. This is the ninth diamond over 1,000 carats from Karowe and the third recovered in 2025.
The bottom of the production shaft was reached in July 2025, a key development towards the completion of the UGP.
The Company drew $10.0 million from the $63.0 million funding support provided by Lucara's largest shareholder, Nemesia S.à.r.l. ("Nemesia") and issued an unsecured debenture (the "Debenture") in connection with the drawdown. The Debenture matures on June 30, 2031.
The recovery of 224 Specials (defined as rough diamonds larger than 10.8 carats) (Q3 2024: 244 Specials) equated to 9.1% (Q3 2024: 11.28%) by weight of the total carats recovered from direct ore feed in Q3 2025. During Q3 2025, the Company recovered eight stones over 100 carats, including two stones that exceeded 1,000 carats.
A total of 97,651 carats were recovered in Q3 2025; 95,302 carats were from direct ore feed from the open pit and stockpiles, at a recovered grade of 12.8 carats per hundred tonnes ("cpht"), and an additional 2,349 carats were recovered from processing historical recovery tailings.
Operational highlights from the Karowe Mine included:
Ore mined of 0.5 million tonnes ("Mt") (Q3 2024: 0.8 Mt).
0.7 Mt of ore processed (Q3 2024: 0.7 Mt).
Financial highlights for Q3 2025 included:
Operating margins of 57% were achieved, a 9% increase from operating margins of 48% in Q3 2024. The increase in operating margins was driven by a 16% increase in revenue and a 5% decrease in operating expenses.
Operating cost per tonne processed was $25.65 per tonne, a 6% decrease compared to the Q3 2024 operating cost of $27.34 per tonne. Lower tonnes were mined in 2025 compared to 2024 resulting in a reduction in certain operating costs. The continued impact of inflationary pressures, particularly labour, has been well managed by the operation. Operating cost per tonne processed is a non-IFRS measure.
Cash position and liquidity as at September 30, 2025:
Cash balance of $18.0 million.
$190.0 million has been fully drawn from the project finance facility ("Project Facility") for the Karowe Underground Project (the "UGP"), along with $30.0 million fully drawn from the working capital facility ("WCF" and together with the Project Facility, the "Facilities").
Working capital deficit (current assets less current liabilities) of $157.8 million due to the classification of the Project Facility as a current liability. Refer to the discussion under the heading Going Concern for further details.
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1 The carats reflect the final cleaned weight of the rough stone. The stone was previously reported at 1,019.85 carats.
William Lamb, President & CEO commented: "Operational performance at Karowe remained robust this quarter, supported by continued strong recoveries and steady progress on the Underground Project. Our ongoing recovery of large, high-value diamonds, including most recently the ninth stone exceeding 1,000 carats, reinforces Karowe's reputation as one of the world's most consistent sources of exceptional quality gems.
The Karowe Underground Project advanced during the quarter, with shaft sinking and equipping proceeding according to and in some areas exceeding plans. Completion of shaft sinking at the production shaft marked a key milestone for the quarter, with lateral development activities ongoing to link the production and ventilation shafts. Our teams continue to deliver these results safely and efficiently, maintaining our impressive safety record.
As development advances toward first underground ore, we remain focused on safe execution and cost discipline. The work undertaken now lays the foundation for the long-term performance and value of the Karowe resource."
GOING CONCERN
As of the date of this news release, the Company is completing a review of the mining method for the UGP and updating the geomechanical studies, long-hole drilling schedule, project cost and schedule. Due to the timing of this review, the Company did not satisfy the requirement under the Facilities to deliver an approved financial model for the UGP by June 30, 2025 ("Financial Model Covenant"), the requirement to execute a lateral development contract by July 31, 2025 ("Lateral Development Covenant"), and the requirement to provide a cost to complete certificate by August 31, 2025 ("Cost to Complete Covenant"). Additionally, the Company is required to fully pay down the WCF for five successive business days at least once every 12 months (the "Clean Down Covenant" and together with the Financial Model Covenant, the Lateral Development Covenant, and the Cost to Complete Covenant, collectively the "Covenants"). The Company did not comply with the Clean Down Covenant deadline of October 21, 2025. As a result of not complying with these Covenants, in accordance with IFRS Accounting Standards, the entire amount outstanding under the Facilities has been classified as a current liability. As of the date of this news release, the lenders, a syndicate of six mandated lead arrangers (the "Lenders"), have not demanded early repayment of the Facilities. Management is actively engaged with the Lenders to remedy the defaults. If the Company obtains waivers for the Covenant breaches from the Lenders, the Project Facility would be reclassified as a non-current liability in future periods. The Company's UGP review has not impacted ongoing operations or the continued development of the UGP which continues to progress as planned.
Management has assessed the Company's ability to continue as a going concern for a period of at least twelve months from September 30, 2025. Based on this assessment, which considered the Covenant breaches and impact of revisions to revenue guidance for 2025 during Q1 2025, the Company estimates that its working capital position as at September 30, 2025, together with its cash flow from operations, and other committed sources of liquidity will not be sufficient to meet its obligations, commitments, and planned expenditures. These conditions may raise significant doubt on the Company's ability to continue as a going concern. The Interim Financial Statements have been prepared on a going concern basis which assumes the Company will continue operations, realize assets, and settle its liabilities as they become due. The Company's Interim Financial Statements do not include adjustments that may be necessary if the Company is unable to continue normal operations; such adjustments could be material and affect asset recoverability, liability classification, expenses, and comprehensive income (loss).
The Company continues to develop plans to raise additional financing required to complete the UGP. While the Company has previously been successful in raising financing, there is no assurance that future financing will be successful or sufficient to meet the Company's requirements
DIAMOND MARKET
The long-term outlook for natural diamond prices remains cautious as the market continues to navigate structural shifts. Prices of lab-grown diamonds have continued to decrease through 2025 with production outweighing demand. Global natural diamond production is forecasted to decrease, following significant production guidance cuts by the major diamond producers.
In the near term, premium-grade large natural diamonds are showing signs of potential stability, supported by limited global supply growth. However, mid-range and lower-grade stones continue to face pricing pressure due to high inventories, cautious consumer sentiment, and the rapid rise in the purchasing of lab-grown diamonds.
KAROWE UNDERGROUND PROJECT UPDATE
The UGP is designed to access the highest value portion of the Karowe orebody, with initial underground carat production predominantly from the EM/PK(S)2 unit.
The Company is currently reviewing the mining method for the UGP, along with the project's cost estimates and schedule. The UGP has progressed well, highlighted by reaching the bottom of the production shaft in late July 2025 and achieving 2,067 lost-time injury free days. The ore extraction review has focused on further understanding the orebody geomechanics and modeling potential caving scenarios which affect ore extraction levels and extraction point designs to be included in an updated technical report. The Company has initiated detailed engineering of the lateral development portion of the UGP and is finalizing an updated life-of-mine plan based on the results of the simulation work.
The review of the mining method does not impact the ongoing development of the UGP. The Company continues to advance according to plan toward the lateral development phase of the project. UGP development work continues with equipping the production shaft, commissioning of the shaft conveyances, progressing underground infrastructure development near the shafts and advancing the lateral development towards the kimberlite.
During Q3 2025, the UGP achieved a twelve-month rolling Total Recordable Injury Frequency Rate (TRIFR) of 1.37. The UGP to date TRIFR up to September 30, 2025 was 0.59.
A total of $22.7 million was spent on the UGP in Q3 2025, primarily on advancing production shaft sinking, developing the 310-level3 to interconnect shafts, and 285-level station development, which included significant concrete work, pump installations, and other station civil works. Expenditures also related to completing key electrical and power installations at the 355-level and 470-level, as well as ongoing lateral development and surface infrastructure activities.
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2 EM/PK(S): Eastern Magmatic/Pyroclastic Kimberlite (South)
3 Each level is equivalent to a metre above sea level.
Ventilation shaft Q3 2025 developments:
Completed 184.5 metres of lateral development at the 310-level.
Advancing the 310-level lateral development toward holing into the production shaft.
Production shaft Q3 2025 developments:
Shaft sinking completed.
Commenced stage modifications and equipping stage assembly.
Completed 7.8 metres of lateral development.
Related infrastructure Q3 2025 developments:
Continued adjudication and review of underground lateral development tender documents.
Completed the Man and Material ("M&M") winder installations, including rack and cable installations in the M&M winder building.
Completed fencing of evaporator pond and pipeline installation.
Advanced mining engineering, focusing on underground infrastructure and finalizing drilling level plans.
Activities planned for the UGP in Q4 2025 include the following:
Ventilation shaft:
Complete the 310-level station development and 310-level lateral development connecting to the production shaft.
Complete blasting of ore pass to the 285-level.
Complete 310-level to 285-level tip construction.
Installation and commissioning of substation.
Complete sinking to 285-level and hole with production shaft.
Continue 310-level and 285-level lateral development.
Production shaft:
Complete stage modification for shaft equipping.
Continue with shaft equipping and complete loading pocket structure steel installation.
Installation of shaft bottom spillage and deflection wall.
Complete station steel construction at the 285-level and 310-level.
FINANCIAL HIGHLIGHTS, Q3 2025
Three months ended September 30,
Nine months ended September 30,
In millions of U.S. dollars, except carats sold
2025
2024
2025
2024
Revenues
$ 51.2
$ 44.3
$ 125.2
