Lucara Diamond management has assessed the company’s ability to continue as a going concern for at least twelve months from March 31, 2025, warning that existing cash reserves, operational cash flows, and committed liquidity sources may be insufficient to meet financial obligations.
The diamond company said that the revised 2025 revenue guidance, along with current working capital constraints, has raised significant doubt about its ability to sustain operations without additional financing.
Projected diamond revenue for 2025 was revised to between $150 million and $160 million from between $195 million and $225 million revealed in a guidance published late last year.
Lucara said that with the project facility and working capital facility (WCF) fully drawn, the company’s ability to complete its Upgrade Project (UGP) now hinges on utilising working capital from existing mining operations, accessing the contingent overrun account (CORA), and securing additional financing through debt or equity.
Under the project facility terms, major shareholder Nemesia provided a limited standby undertaking of up to $63.0 million.
On April 3, 2025, lenders approved a $28 million drawdown from the CORA to fund UGP construction, contingent on Nemesia extending its standby undertaking until project completion.
While the company has historically secured financing, it cautioned that future fundraising, whether through debt or equity, may not succeed or could fall short of requirements.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
