LUCARA ANNOUNCES UPDATED FEASIBILITY STUDY FOR KAROWE UNDERGROUND PROJECT
Lucara maps a path to 2040, but a $343 million funding wall looms over Karowe.
The news release dated January 5, 2026, presents the results of an updated Feasibility Study (FS) for the Karowe Underground Project (UGP) in Botswana. Key highlights include an extension of the mine life to at least 2040, with a production start target of H1 2028. The study reports an after-tax NPV (8%) of $432.1 million and estimated net income of $1.3 billion over the life of the mine. Critically, the company has updated its capital requirements: total pre-production capital is pegged at $779 million, with $436 million already spent, leaving a remaining requirement of $343.2 million. The company also disclosed a crucial agreement with lenders dated December 30, 2025, which waived previous events of default and extended key deadlines.
This news is materially positive but carries significant "fine print" risks. - Operational De-risking: The completion of the FS and the execution of the lateral development contract (announced Dec 2025) provide a clear technical roadmap for a project that was previously under "Going Concern" clouds. - Lender Support: The waiver of defaults and extension of deadlines is the most critical near-term positive. It suggests that despite the "Significant Doubt" cast in Q1/Q2 2025 reports, lenders are willing to see the project through. - The Funding Gap: While the NPV of $432 million is healthy, the company must find $343.2 million to finish the project. Given the current market cap of approximately $95 million and only $18 million in cash (as of Q3 2025), a massive equity dilution or significant new debt is inevitable. - Guidance vs. Reality: Comparing this to 2024/2025 news, the production start has shifted to 2028, and the total cost has escalated. The company is now "owner-managed" after terminating its EPC(M) contract in March 2025 to control costs, which puts the execution risk entirely on Lucara’s internal team.
Lucara Diamond Corp. owns 100% of the Karowe Diamond Mine in Botswana. Karowe is world-renowned for producing large, Type IIa diamonds, including several of the world's largest ever recovered. The company is currently transitioning from an open-pit operation to the Karowe Underground Project (UGP). This transition is high-risk as the company must survive on lower-grade stockpiles during 2026 and 2027 while completing the shafts and lateral development needed to reach the high-value South Lobe orebody at depth by 2028.