Lucara Diamond has reported robust operational and financial results for the third quarter (Q3) of 2025, highlighted by the recovery of its ninth diamond larger than 1,000 carats from the Karowe Mine in Botswana.
However, the company also disclosed it is in breach of several loan covenants related to its underground expansion project.
The company sold 101,422 carats during the quarter, generating revenue of $51.2 million—a 16% increase compared to the same period last year.
Operating margins improved significantly to 57%, up from 48% in Q3 2024, driven by higher revenue and a 5% reduction in operating expenses.
"Operational performance at Karowe remained robust this quarter, supported by continued strong recoveries and steady progress on the Underground Project,” said company president and chief executive William Lamb.
“Our ongoing recovery of large, high-value diamonds reinforces Karowe’s reputation as one of the world’s most consistent sources of exceptional quality gems."
Lucara achieved a key milestone in its Karowe Underground Project (UGP) during the quarter, reaching the bottom of the production shaft in July. The project continues to advance with lateral development activities ongoing to connect the production and ventilation shafts.
Despite these operational successes, Lucara disclosed that it has breached several financial covenants related to its $220 million in drawn facilities. The company failed to meet deadlines for delivering an approved financial model, executing a lateral development contract, providing a cost-to-complete certificate, and fully paying down its working capital facility.
As a result, the company has classified its entire $190 million project facility as a current liability. Lucara said it is actively engaged with lenders to obtain waivers for these covenant breaches.
The company noted that these developments have not impacted ongoing operations or UGP development, which continues as planned.
Its financial position showed cash of $18 million as of September 30, 2025, alongside a working capital deficit of $157.8 million due to the reclassification of the project facility.
Looking ahead, Lucara maintained its revised 2025 guidance, expecting full-year diamond revenue of $150-$160 million and capital expenditures for the UGP of up to $95 million, reduced from the previous guidance of $115 million.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
