Lucara Diamond increased the underground mine construction costs at its Karowe diamond project in Botswana by 25%. The company now estimates the cost at approximately $683 million. Lucara plans to cover this amount using its cash reserves and negotiated loans.

Lucara lowered its 2025 revenue forecast to between $150 million and $160 million, down from the initial $195 million to $225 million range. The company made this adjustment after a disappointing first quarter in diamond sales. In its May 9 report, Lucara expressed concern about financing the underground expansion at Karowe.

Lucara funds part of the construction through cash flow from existing mining operations. However, the weaker revenue outlook raises risks that these funds may not cover all planned development expenses. The company is considering alternative financing options, including loans or issuing new shares.

"The Company is pursuing options to address the shortfall, including additional financing. While the Company has had past success in securing financing, there is no assurance that such financing will be available in the future or available on acceptable terms," Lucara reported. This warning adds uncertainty to a project already behind schedule.

In 2023, Lucara revised the Karowe underground mine development plan due to slower-than-expected progress. The company increased total construction costs by 25% to around $683 million.

The underground project remains strategic for Karowe’s long-term operation. Its completion should extend the mine’s life to 2040 and generate about $4 billion in additional revenue. However, financing challenges and weakening global demand for natural diamonds threaten this goal.

This article was initially published in French by Aurel Sèdjro Houenou

Edited in English by Ange Jason Quenum