$28m Emergency Funding as Lucara Sales Dip
May 20, 25
(IDEX Online) - Lucara is drawing down up to $28m in emergency funding for its underground mine expansion after reporting a slump in Q1 earnings and lowering its revenue guidance for the full year.
The Vancouver-based miner received lender approval for the funds from its Cost Overrun Reserve Account (CORA) extending a standby undertaking, as it faces increasing financial pressure from declining revenues, operational disruptions, and a weak diamond market.
Revenue for the first quarter slipped 23 per cent to $30.3m, as heavy rainfall in January forced the company to process lower-grade stockpile material at its Karowe open pit mine, in Botswana. It sold 72,871 carats, down 22 per cent year-on-year.
"This lower revenue outlook has led management to assess the company's ability to continue as a going concern, with concerns raised about sufficient working capital, cash flow from operations, and liquidity to meet obligations and ongoing UGP (underground mine plan) development," Lucara said in its Q1 2025 Results.
Projected revenue for the full year has been lowered from $195m - $225m to $150m - $160m, although this figure excludes sale of the 2,488-carat Motswedi diamond that was recovered in August 2024.
Petra said lenders had approved a draw of up to $28m from the cost overrun reserve account to allow work on the underground expansion to continue.
In exchange, Nemesia, its largest shareholder, agreed to extend its shareholder standby undertaking until the project is finished.
During Q1 Lucara said it recovered six stones over 100 carats including the a 1,476 carat non-gem diamond that was sold on tender for $1.11m.
Pic courtesy Lucara of Karowe mine.