LUCARA ANNOUNCES Q2 2025 RESULTS

VANCOUVER, BC, Aug. 8, 2025 /CNW/ – (TSX:LUC) (BSE: LUC) (Nasdaq FNGM: LUC) PDF Version

Lucara Diamond Corp. (“Lucara” or the “Company”) today reports its results for the quarter ended June 30, 2025. All amounts are in U.S. dollars unless otherwise noted. 

Q2 2025 HIGHLIGHTS

• In Q2 2025, the Company’s revenue increased to $43.7 million from $41.3 million in Q2 2024, primarily due to the sale of a 1,094 carat diamond (the “Seriti”) sold to HB for an initial polished value of $12.0 million. The final sale value of the Seriti will be determined once the polished outcomes are sold to end buyers.
• In July 2025, the Company recovered a 2,036 carat near-gem diamond. The stone was recovered from processing EM/PK(S)¹ kimberlite and is the third largest rough diamond ever unearthed and the second largest rough diamond to be recovered in Botswana. The EM/PK(S) material which is the target of the UGP has now produced seven of the world’s largest recorded natural diamond recoveries.
• The recovery of 242 Specials (defined as rough diamonds larger than 10.8 carats) (Q2 2024: 206 Specials) equated to 9.4% (Q2 2024: 6.9%) by weight of the total carats recovered from direct ore feed in Q2 2025. During Q2 2025, the Company recovered 15 stones over 100 carats, including two stones that exceeded 200 carats.
• A total of 85,024 carats were recovered in Q2 2025; 82,555 carats were from direct ore feed from the pit and stockpiles, at a recovered grade of 12.5 carats per hundred tonnes (“cpht”), and an additional 2,469 carats were recovered from processing of historical recovery tailings.
• During Q2 2025, the Company successfully funded the Cost Overrun Reserve Account (“CORA”) to the required balance of $61.7 million. Following the funding of the CORA, the lenders approved the withdrawal of $28.0 million from the CORA in exchange for the Company’s largest shareholder, Nemesia S.à.r.l. (“Nemesia”), agreeing to extend until project completion its $28.0 million shareholder standby undertaking in support of liquidity shortfalls.
• Operational highlights from the Karowe Mine included:
• • Ore mined of 0.7 million tonnes (“Mt”) (Q2 2024: 0.7 Mt).
  • 0.7 Mt of ore processed (Q2 2024: 0.7 Mt).
• Financial highlights for Q2 2025 included:
  • Operating margins of 65% were achieved, a 2% decrease from operating margins of 67% in Q2 2024. The decrease in operating margins was driven by a 6% increase in revenue and a 12% increase in operating expenses, which reflects the cost of inventory sold during the period.
  • Operating cost per tonne processed was $26.76 per tonne, a 2% increase compared to the Q2 2024 operating cost of $26.32 per tonne. The continued impact of inflationary pressures, particularly labour, has been well managed by the operation. Operating cost per tonne processed is a non-IFRS measure.
• Cash position and liquidity as at June 30, 2025:
  • Cash balance of $22.7 million.
  • $190.0 million has been fully drawn from the project finance facility (“Project Facility”) for the Karowe underground project (the “UGP”), along with $30.0 million fully drawn from the working capital facility (“WCF” and together with the Project Facility, the “Facilities”).
  • Working capital deficit (current assets less current liabilities) of $156.4 million due to the classification of the Project Facility as a current liability. Refer to discussion under the heading Going Concern for further details.
  • Excluding the Project Facility from current liabilities, positive working capital balance of $33.7 million.

William Lamb, President & CEO commented: “The Karowe Diamond Mine continues to validate its world-class status with the recovery of a second diamond exceeding 2,000 carats. The continued and consistent recovery of Specials reflects not only the quality of the Karowe asset but also reflects the strength of our operational team, amid a complex and ever-changing global environment.

Progress on the Karowe underground project remains strong, with advancements in shaft sinking, station development, and lateral development as planned. We are delighted to recognize over 2,000 days lost-time injury free on the UGP in July, as well as the completion of the final sinking blast in the production shaft.

As we transition from open-pit to underground operations, we remain focused on disciplined execution and strategic resource management, specifically as we will rely largely on lower-value stockpiled material prior to the UGP coming online. As we navigate this critical transition, we maintain focus on our commitment to recovering maximum value. We recognize that realizing the full potential of our underground resource will involve navigating both the operational and financial complexities ahead.”

GOING CONCERN

As of the date of this news release, the Company is completing a review of the UGP ore extraction methodology and is currently updating its geomechanics studies, as well as updating its project cost and schedule. Due to the timing of this review, the Company did not satisfy the requirement to deliver an approved financial model for the UGP to its lenders by June 30, 2025 (“Financial Model Covenant”). The Company failed to cure its non-compliance with this Financial Model Covenant within the 30-day cure period. As a result, as required under IFRS Accounting Standards, the entire amount due under the Facilities is classified as a current liability. As of the date of this news release, the lenders have not demanded early repayment of the Facilities. Management is actively working with the lenders to remedy the default. If the Company receives a waiver for the covenant breaches from the lenders, the Project Facility would be classified as a non-current liability in future periods. The Company’s UGP review has not impacted ongoing operations or the development of the UGP which continues to progress as planned. The Company currently has access to up to $96.7 million of additional cash liquidity, being shareholder undertakings of $63.0 million and, subject to lender’s approval, the remaining cash in the CORA of $33.7 million. These funds may be drawn for the UGP subject to certain conditions in the Facilities.

Management has assessed the Company’s ability to continue as a going concern for at least twelve months from June 30, 2025. Based on this assessment, including the non-financial covenant breaches and impact of revisions to revenue guidance for 2025, the Company estimates that its working capital as at June 30, 2025, cash flow from operations, and other committed sources of liquidity will not be sufficient to meet its obligations, commitments, and planned expenditures. These conditions cast doubt on the Company’s ability to continue as a going concern. The Interim Financial Statements have been prepared on a going concern basis which assumes the Company will continue operations, realize assets, and settle its liabilities as they become due.

The Company continues to develop plans to raise additional financing required for UGP completion. While the Company has previously been successful in raising financing, future fundraising efforts may not succeed or may fall short of the required amounts.

DIAMOND MARKET

The long-term outlook for natural diamond prices remains cautious as the market continues to navigate structural shifts. Prices of lab-grown diamonds have continued to decrease in 2025 with production outweighing demand. Global natural diamond production is forecasted to decrease, following significant production guidance cuts by the major diamond producers.

In the near term, premium-grade natural diamonds are showing renewed strength, supported by limited global supply growth and strong performance at international trade shows. However, mid-range and lower-grade stones continue to face pricing pressure due to high inventories, cautious consumer sentiment, and the rapid rise of lab-grown diamonds.

Encouraging sign are emerging in the recovery of the Chinese diamond market, which, if remain consistent, will support improved demand dynamics in the quarters ahead.

KAROWE UNDERGROUND PROJECT UPDATE

The UGP is designed to access the highest value portion of the Karowe orebody, with initial underground carat production predominantly from the EM/PK(S) unit.

The Company is currently reviewing its UGP mining ore extraction methodology, project costs and schedule. The UGP has progressed very well including reaching the bottom of the production shaft in late July 2025 and achieving 2,000 lost-time injury free days. The ore extraction review has focused on further understanding the orebody geomechanics and modeling possible caving scenarios to safely recover ore from the UGP. This review has included producing a new geomechanics numerical model along with performing caving simulations, which affect ore extraction levels and extraction point designs. The Company has initiated detail engineering of the lateral development portion of the UGP and is currently completing a revised life of mine plan based on the results of the simulation work.

The mine extraction review does not impact the current UGP development. The Company continues to advance as planned to the lateral development phase of the project. UGP development work continues with equipping the production shaft, commissioning of the shaft conveyances and progressing with its underground infrastructure development near the shafts. Additional lateral development towards the kimberlite is also planned for H2 2025. 

During Q2 2025, the UGP achieved a twelve-month rolling Total Recordable Injury Frequency Rate of 0.49. The UGP to date Total Recordable Injury Frequency Rate up to June 30, 2025 was 0.55.

A total of $13.6 million was spent on the UGP in Q2 2025 primarily for activities related to the skip loading pocket at the 285-level², station development on the 335-level and 310-level, additional lateral developments and surface infrastructure.

Ventilation shaft Q2 2025 developments:

• Completed 335-level station development and sunk towards 310-level.
• Completed the bulk excavation on the top of the Fine Ore Bins.
• Completed 66 metres of lateral development.

Production shaft Q2 2025 developments:

• Completed 285-level station development.
• Continued with the development of the 310-level ramp and 240-level ramp breakaways to the production shaft bottom.
• Completed skip loading pocket excavation and 153 metres of lateral development.

Related infrastructure Q2 2025 developments:

• Continued adjudication and review of underground lateral development tender documents.
• Progressed construction of the Man and Material (“M&M”) winder.
• Completed construction of the M&M winder building and winder driver’s cabin.
• Continued with rack and cable installations in the M&M winder building.
• Completed construction and lining of the water management pond and commissioned the water blending circuit.
• Advanced mining engineering, focusing on underground infrastructure and finalizing drilling level plans.

Activities planned for the UGP in Q3 2025 include the following:

Ventilation shaft:

• Continue with the 310-level station development.
• Lateral development to connect with the production shaft.
• Commence sinking to 285-level.

Production shaft:

• Complete 285-level station civils and 245-level station development.
• Continue with sink to shaft bottom at the 245-level and commence shaft equipping preparations.
• Strip headgear sinking arrangements.

FINANCIAL HIGHLIGHTS – Q2 2025

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