Diamond miner Lucara Diamond Corporation has reported a ‘transformational’ first quarter of the year, with the successful completion of its equity and bond financings for the Karowe underground project (UGP), in Botswana, having strengthened the company's balance sheet and positioned it for long-term value creation.

The company has reported revenue of $21.8-million for the three months ended March 31, from a higher proportion of stockpile processing during the period owing to unseasonal weather having impacted openpit mining.

Lucara explains that stockpile material is inherently variable in grade and quality, which affected realised recoveries in the quarter. Openpit mining resumed on March 26 and is expected to conclude later in the year.

The company’s operating cost per tonne processed for the period was $24.74, reflecting disciplined cost management despite inflationary pressures and transitional mining activities.

Despite lower revenue and higher costs in the first quarter, Lucara maintains its full-year outlook.

Revenue guidance remains unchanged at between $100-million and $130-million for the full year, supported by the planned return to openpit mining, with all other guidance parameters also reaffirmed.

Lucara president and CEO William Lamb describes the first quarter as a “pivotal milestone” for Lucara, noting that the successful execution of the company’s financing strategy for the Karowe UGP has strengthened its balance sheet, providing the financial flexibility to advance one of the world's most exceptional diamond assets.

Operationally, he says Karowe continues to demonstrate its resilience and unique value proposition.

Lamb says the recovery of a 36.92 ct blue diamond, alongside multiple large diamonds recovered from run-of-mine (RoM) stockpile material, underscores the consistent delivery of high-quality, premium diamonds that differentiates Lucara globally.

While broader diamond market conditions remain mixed, Lamb says Lucara’s focus on large, high-value diamonds positions the company well to benefit from improving fundamentals in this segment.

“With steady progress on the underground project and continued operational execution, we are well positioned to unlock long-term value for our shareholders,” he adds.

KAROWE UPDATE

Lucara’s updated feasibility study for UGP advancement, which was announced on January 30, confirmed a total cost at completion of $779.2-million, including contingency.

As at March 31, the company explains that $472.4-million had been incurred, with a further $117.7-million having been committed but not yet incurred.

The study incorporates construction progress, updated exchange rates, inclusion of legacy diamond values, and revisions to hydrogeological and geomechanical models, mine design, mining method and scheduling.

From the first half of this year to the first half of 2028, Lucara says processing will continue using a combination of openpit ore and RoM stockpiled materials.

UNDERGROUND PROGRESS

The company notes that the project has been materially derisked following completion of shaft-sinking activities in 2025, including the 776 m production shaft and 729 m ventilation shaft.

The UGP has achieved 2 249 lost time injury-free days, with a project-to-date total recordable case frequency rate (TRIFR) of 0.54, below the target of 0.90, and a 12-month rolling TRIFR of 0.34.

Total UGP capital expenditures for the first quarter were $19-million, which primarily related to shaft equipping, lateral development and surface infrastructure.

During the quarter under review, the ventilation shaft advanced about 491 m (lateral development) across the 310-level 5 and 285-level, bringing total lateral development to 1 245 m, which is ahead of the planned handover stage to the lateral development contractor.

At the production shaft, shaft equipping was completed to surface, including installation of guides and buntons, followed by decommissioning of sinking infrastructure and commencement of headgear internal steel changeover works.

The lateral development contract awarded in the fourth quarter of 2025 covers all development from the production shaft to the orebody, including extraction, undercut and long-hole drilling level infrastructure, underground crushing facilities and associated services.

During the reporting quarter Lucara says the contractor completed its site visit and kickoff meeting, with onboarding of key personnel and mobilisation activities having started on March 31.

Lucara confirms activities planned for the UGP in the second quarter of the year include continuing with production shaft headgear changeover, including stripping and installation of permanent steel at remaining headgear levels, and advancing bin and chute installation works.

Planned activities also include advancing lateral development at the 310-level, as well as initiation of 470-level development works for ore pass raiseboring.

The company will also complete civil works and start installing main surface ventilation fans, as well as continue with operational readiness - advancing staffing plans, finalising operating procedures, and preparing for operation and maintenance of permanent infrastructure.

OUTLOOK

Lucara expects to process between 2.6-million and 2.9 million tonnes of ore primarily from RoM stockpiled materials in the full year.

The company says assumptions for carats recovered and sold as well as tonnes of ore processed are consistent with achieved plant performance in recent years.

Lucara explains that RoM stockpiled material and life-of-mine stockpiles will provide mill feed until the second half of 2027 when UGP development ore is scheduled to start replacing stockpiles with high-grade ore from the UGP.

Full scale underground production is planned for the first half of 2028.

Lucara says capital costs for the UGP are expected to be up to $110-million this year, while expenditures will focus predominantly on shaft equipping and advancing lateral development.

Lucara estimates sustaining capital to be about $11.5-million with a focus on the replacement and refurbishment of key asset components and tailings advancement.