1 September 2025
• Lucara secures $10M loan for Karowe underground project
• UGP faces delays, costs rise to $683M
• Diamond market slump pressures revenues, project financing
Lucara Diamond has secured a $10 million loan from its largest shareholder, Nemesia S.a.r.l., to address a funding shortfall for its Karowe underground project (UGP) in Botswana. The company announced the funding on Friday, August 29, as it continues to revise the project’s technical and financial parameters.
The UGP, currently budgeted at $683 million, is designed to extend the life of the Karowe mine until at least 2040. The current open-pit operations are slated to conclude in 2026. However, the underground project has already faced significant delays and budget increases. In 2023, the UGP’s startup was pushed back from its original 2026 target to 2028, with a corresponding 25% increase in its budget. At the time, Lucara cited a slower-than-anticipated execution pace.
The company announced a new review of the UGP on August 8, which includes an update of the project’s geomechanical studies, costs, and timeline. The goal is to provide updated financial models to shareholders and potential lenders to advance the necessary investments.
The review comes as the natural diamond market faces weakening demand and falling prices.
In May, Lucara lowered its 2025 revenue forecast to a range of $150 million to $160 million, down from its initial projection of $195 million to $225 million. The company reported approximately $203 million in revenue from Karowe in 2024.
Meanwhile, Lucara plans to continue development work and seek additional financing to complete the UGP. The company has set a 2025 budget of $95 million for the project, a reduction from the $115 million announced at the beginning of the year. The Karowe mine, known for producing exceptional diamonds, is 100% owned by Lucara, with the Botswana government receiving a 10% annual royalty on its revenues.
Source: https://shorturl.at/pEHrP
