Lucara Diamond Corp. has lowered its full-year forecast after a forced shift to lower-grade, lower-quality ore, causing it to worry about its ability to continue as a going concern.
The miner believes 2025 revenue will reach between $150 million and $160 million, compared with its initial guidance of $195 million to $225 million, it said Friday. Meanwhile, it lowered the outlook for output from its Karowe mine in Botswana to between 330,000 and 360,000 carats, down from 360,000 to 400,000 carats. Sales volume will be between 240,000 and 370,000 carats versus the initial 400,000 to 420,000 carats.
The reduction comes as the miner was forced to process lower-grade stockpiled ore due to heavy rainfall that prevented it from accessing the open pit. It also experienced an unexpected shift in contact between two kimberlites that blocked entry to the higher-grade EM/PK(S)2 ore it was planning to access.
The company has fully drawn funds from both its project finance facility and working-capital facility, leaving it without access to extra cash, should the need arise. Lucara is now questioning whether it will have enough working capital to see it through the next 12 months.
“These factors resulted in the company’s 2025 revenue being revised,” Lucara said. “This lower revenue outlook has led management to assess the company’s ability to continue as a going concern. Based on this assessment…the company estimates that its working capital as at March 31, 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 significant doubt on the company’s ability to continue as a going concern.”
Lucara sells rough from its Karowe mine in Botswana in three ways: via quarterly tenders; on its Clara digital platform, which matches buyers with the exact stones they need; and through an offtake agreement with HB for rough over 10.8 carats.
Revenue for the first quarter that ended March 31 dropped 23% to $30.3 million, as the miner sold a lower proportion of large stones into its contract agreement with HB. The lower-grade ore available for processing also led to a 22% decline in sales volume to 72,871 carats. Sales to HB comprised 64% of total revenue, up from 59% a year ago. However, sales from the channel decreased 17% to $19.3 million, due to a lower volume of carats sold into the partnership. The company reported a net loss of $100,000, narrower than the $7 million net loss it posted in the first quarter a year ago. Output from the deposit grew 15% to 93,716 carats, comprising 90,500 from direct ore and an additional 3,216 carats from the processing of tailings.
During the quarter, Lucara recovered 139 special-sized stones, including six diamonds greater than 100 carats. Of those, one was a 1,476 carat non-gem-quality diamond, which sold at tender for $1.1 million.
Image: The Karowe processing plant. (Lucara Diamond Corp.)
