Canada-listed Lucara Diamond has reported lower revenue and earnings for 2025 as it advances the underground expansion of its flagship Karowe mine in Botswana, while cautioning that additional funding will be required to complete the project.
For the year ended December 31, 2025, Lucara sold 353 302 ct, down from 399 215 ct in 2024, generating revenue of C$159.7-million compared with C$203.9-million a year earlier. Net income from continuing operations declined to C$26.1-million, from C$43.6-million in 2024, while operating margins narrowed to 52% from 61%, reflecting a 22% drop in revenue partly offset by lower operating expenses.
Fourth-quarter revenue totalled C$34.5-million, compared with C$78.8-million in the corresponding period of 2024, when sales were boosted by exceptional large-stone recoveries.
The 2025 revenue included the sale of the 1 094 ct Seriti diamond, which generated an initial polished value of C$12-million, with a further C$7.9-million in top-up revenue recognised during the year following the sale of the polished stones. In 2024, revenue was supported by the sale of the 549 ct Sethunya and the 1 080 ct Eva Star diamonds.
Operationally, 2025 marked a milestone year for the Karowe Underground Project (UGP), with both the 776 m production shaft and the 729 m ventilation shaft reaching final depth. Lateral development progressed across multiple levels and the project surpassed 2 000 lost-time injury-free days.
During the year, 1.9-million tonnes of ore were mined and 2.8-million tonnes processed, broadly in line with 2024 levels. Operating cost per tonne processed decreased by 3% to $27.15/t. In the fourth quarter, 705 513 t were processed at an average grade of 12.2 carats per hundred tonnes, yielding 86 110 ct from direct ore feed.
Karowe continued to deliver large, high-value stones. A total of 772 specials – diamonds larger than 10.8 ct – were recovered in 2025, representing 7.1% by weight of total recovered carats from direct ore feed. The company recovered 31 stones larger than 100 ct, including three exceeding 1 000 ct, among them a 2 036 ct near-gem diamond and a 37.42 ct pink Type IIa stone.
Capital expenditure on the UGP totalled C$75.8-million in 2025, with C$20.3-million spent in the fourth quarter. Work focused on shaft sinking, developing the 245 m, 285 m, 310 m and 335 m levels to connect the shafts, and initiating lateral development. In December, Lucara awarded a lateral development contract to Group R Mining and Exploration Botswana to advance underground infrastructure towards the kimberlite orebody.
An updated feasibility study filed in January increased the total forecast cost at completion for the UGP to C$779.2-million, up 14% from the July 2023 estimate. As at year-end, C$469.4-million had been incurred, with a further C$82.3-million committed but not yet spent. Underground production is now expected in the first half of 2028, with full-scale output planned thereafter and mine life extended to 2038.
Lucara ended 2025 with C$31.9-million in cash and working capital of C$33.6-million. The 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 subsequently secured amendments to its cost overrun reserve account requirements under a waiver agreement with lenders.
Despite these measures, Lucara warned that committed liquidity will not be sufficient to meet the revised cost-to-complete estimate for the UGP. Management said the company is not expected to comply with its cost-to-complete covenant by July 15, 2026, unless additional financing is obtained or lenders grant further waivers or extensions. These conditions, it noted, cast significant doubt on its ability to continue as a going concern.
Looking ahead to 2026, Lucara has guided for diamond revenue of C$100-million to C$130-million, with 340 000 ct to 360 000 ct expected to be recovered and sold. The company plans to process between 2.6-million and 2.9-million tonnes of ore, primarily from stockpiles, while spending up to C$110-million on the UGP and up to C$11.5-million on sustaining capital.