Lucara Diamond Corporation generated US$61.1 million (P855.4 million) from diamond sales at its Karowe mine in Botswana during the third quarter of 2026, up from US$51.2 million (P716.8 million) a year earlier, as the company prepares to end open-pit mining and transition towards underground operations.
The stronger sales performance comes at a critical stage for Karowe, where open-pit mining is expected to conclude during the fourth quarter of 2026. The company will subsequently rely on existing run-of-mine ore stockpiles to maintain processing operations while development of its US$779.2 million (P10.91 billion) underground expansion continues.
According to Lucara’s third-quarter 2026 investor presentation, the company sold 113,227 carats during the three months to September, compared with 101,422 carats in the corresponding period last year.
The quarter’s sales included a 1,303-carat Type IIa diamond recovered in July, one of the exceptionally large stones for which Karowe has become known.
Lucara recovered 96,767 carats during the quarter, including 163 diamonds weighing more than 10.8 carats, classified as Specials. These included the mine’s tenth diamond exceeding 1,000 carats and another eight stones weighing more than 100 carats.
The company has subsequently increased its full-year revenue guidance to between US$140 million and US$160 million (P1.96 billion to P2.24 billion), reflecting its improved sales outlook.
Operating cash flow also strengthened, with net cash generated from operating activities increasing to US$35.3 million (P494.2 million), compared with US$15.1 million (P211.4 million) in the third quarter of 2025.
The improvement was accompanied by lower processing costs, which declined from US$25.65 to US$22.41 per tonne. Lucara attributed the reduction to higher throughput and lower in-pit mining activity, which offset increased electricity costs.
Karowe processed 829,822 tonnes of ore during the quarter, compared with 744,753 tonnes a year earlier, while ore mined declined from 517,155 tonnes to 391,626 tonnes as open-pit operations approached completion.
The planned closure of the open pit marks a significant change in Karowe’s operating model, with future production increasingly dependent on the successful completion of the underground expansion.
Lucara’s updated feasibility study places the total cost of the underground project at US$779.2 million, including contingency. As at 30 September 2026, the company estimated that US$245.2 million (P3.43 billion) remained to complete the development.
Of the outstanding project expenditure, US$92.9 million (P1.30 billion) had already been committed but not yet incurred.
Capital expenditure on the underground expansion reached US$40.7 million (P569.8 million) during the third quarter, mainly covering shaft equipping, underground lateral development, mining equipment and surface infrastructure.
The project has moved from shaft construction into underground lateral development, with 2,121 metres completed by the end of September.
Lucara reported that the production shaft had been handed over to its operating team, while Botswana’s Department of Mines had licensed the shaft conveyances and rock winder.
All required mining equipment had been delivered to the site, together with 90% of ancillary equipment. Surface ventilation fans were commissioned after the end of the reporting period.
The company also reported 2,427 consecutive days without a lost-time injury on the underground project.
The transition is taking place against continued uncertainty in the global diamond market, where natural diamond producers face competition from laboratory-grown stones and changing consumer demand.
Lucara said synthetic diamond wholesale and retail prices continued to decline during 2026 as production capacity expanded. However, it noted some positive movement in natural diamond prices during the third quarter, particularly in larger categories.
The company expects global natural diamond production to remain below historical levels because of mine depletion, limited new discoveries and closures across the industry.
Under its revised 2026 guidance, Lucara expects diamond sales and recoveries of between 340,000 and 360,000 carats each, with ore processing of between 2.8 million and 3 million tonnes.
The company has also provided for underground project capital expenditure of up to US$110 million (P1.54 billion) during 2026.
Karowe’s immediate operational challenge will be maintaining diamond production and cash generation from stockpiled ore as the mine moves towards underground production, with the remaining development work determining the next phase of its operations.
Currency conversions are based on Lucara’s 2026 planning exchange rate of P14 to US$1.
