LUCARA ANNOUNCES YEAR END 2025 RESULTS

Executive Summary

• Lucara reports FY 2025 revenue of $159.7 M (down 22% YoY) and net income of $26.1 M, with operating margin falling to 52%.
• The company disclosed a going‑concern risk: existing liquidity and committed funding are insufficient to cover the revised UGP cost estimate of $779.2 M, and covenant breaches remain despite waiver extensions.
• Raised C$165 M in a non‑brokered private placement (1.031 bn shares at C$0.16) and issued an unsecured debenture maturing 30 Jun 2031; also announced auditor change to Ernst & Young.

Key Details

• Financial Highlights FY 2025
• Revenue: $159.7 M vs $203.9 M (2024).
• Net income (continuing): $26.1 M vs $43.6 M (2024).
• Operating margin: 52% (down from 61%).
• Cash balance: $31.9 M; Working capital: $33.6 M.
• Operational Highlights
• Carats sold: 353,302 ct (vs 399,215 ct).
• 31 stones >100 ct recovered, including three >1,000 ct and a 37.42 ct pink Type IIa.
• Production & ventilation shafts reached final depth; over 2,000 lost‑time‑injury‑free days.
• UGP (Underground Project) Update
• Revised total cost to completion: $779.2 M (↑14% vs July 2023 estimate).
• Costs incurred to 31 Dec 2025: $469.4 M; committed but not yet spent: $82.3 M.
• Capital expenditures 2025: $75.8 M (incl. $20.3 M in Q4).
• Production from UGP expected H1 2028; schedule extensions granted through July 15 2026.
• Financing
• Private placement (Jan 29‑30 2026): C$165.0 M gross proceeds; 1,031,250,000 shares at C$0.16/share.
• Unsecured debenture issued concurrent with drawdown of $28.0 M from Nemesia’s funding support; matures 30 Jun 2031.
• Covenant Waivers
• Sub‑sequent Waiver Agreement (Mar 3 2026) reduces required CORA balance to $21.2 M and extends Financial Model, Cost‑to‑Complete, and Clean‑Down covenants into mid‑2026.
• Going‑Concern Assessment
• Management concludes existing cash, operating cash flow, the Jan 2026 equity raise, and other committed sources are insufficient to meet revised UGP cost estimate.
• Significant doubt expressed over ability to comply with Cost‑to‑Complete covenant without additional financing.
• Auditor Change
• Effective Mar 3 2026, PwC Botswana resigns; Ernst & Young LLP appointed as successor auditor for the Company and its Botswana subsidiary.

Notable Quotes

“Our 2025 performance reflects both the resilience of our operations… We strengthened our capital structure with the successful C$165 million equity financing… The filing of our Updated Feasibility Study confirms a clear path to completion of the UGP.” – William Lamb, President & CEO.