Name of the Project
Karowe diamond mine underground project (UGP).

Location
Karowe diamond mine, north-central Botswana.

Project Owner/s
Diamond exploration and mining company Lucara Diamond Corp, through its wholly owned subsidiary Lucara Botswana.

Project Description
Karowe is an operating hard-rock diamond mine that is being transitioned from openpit to underground mining. 

The underground project is designed to access the highest-value portion of the Karowe orebody, focused on the South Lobe of the AK6 kimberlite, with initial underground production expected to be predominantly from the EM/PK(S), or Eastern Magmatic/Pyroclastic Kimberlite (South), unit.

The updated 2025 feasibility study supports a ten-year underground mine life and is expected to extend Karowe’s revenue and cash flow generation to 2038. The South Lobe remains open at depth. 

Lucara’s current mine plan provides for openpit operations to continue in 2026, followed by underground operations, with the Karowe mining licence approved by the Botswana government until 2046.

The 2025 mineral reserve estimate, effective September 30, 2025, totals 37.3-million tonnes containing 4.547-million carats at 12.2 carats per hundred tonnes (cpht), all classified as probable reserves. This includes underground reserves of 28.5-million tonnes containing 3.669-million carats at 12.9 cpht, and stockpile reserves of 7.6-million tonnes containing 745 000 ct at 9.8 cpht.

The project is designed to support a 2.85-million-tonne-a-year underground mine and processing plant, with total life-of-mine diamond recoveries estimated at 4.5-million carats. About 28.5-million tonnes of ore are expected to be mined from underground and about 37.3-million tonnes of ore are expected to be processed over the life of the underground project.

Mining will use a hybrid method, comprising longhole shrinkage drill-and-blast bulk mining, transitioning to block/free caving at higher elevations where unassisted caving is expected. Run-of-mine (RoM) material will be handled by an underground jaw crusher and conveyor system to shaft skips, with surface conveying and rehandling to the plant and waste facilities.

The underground mine will use a combination of existing and newly built infrastructure at Karowe. From the first half of 2026 to the first half of 2028, processing is expected to continue using a combination of openpit ore and RoM stockpiled material, comprising ore previously mined but not yet processed.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The updated 2025 feasibility study estimates an after-tax unlevered net present value, at an 8% discount rate, of $432.1-million, excluding the impact of interest deductibility on tax and costs incurred to date. The project is expected to generate more than $1.3-billion in net income. An internal rate of return has not been disclosed in the latest update.

Capital Expenditure
The updated feasibility study estimates total UGP capital cost at completion at $779.2-million, including contingency. As at March 31, 2026, $472.4-million had been incurred and a further $117.7-million had been committed but not yet incurred. Lucara expects 2026 UGP capital expenditure of up to $110-million, focused mainly on shaft equipping and lateral development.

Planned Start/End Date
Underground development ore is scheduled to start replacing stockpile feed in the second half of 2027. Full-scale underground production is planned for the first half of 2028.

The underground project is expected to support a ten-year underground mine life and extend Karowe’s revenue and cash flow generation to 2038.

Latest Developments
Lucara reported on May 7, 2026, that the Karowe UGP had been materially derisked following the completion of shaft sinking in 2025, including the 776 m production shaft and 729 m ventilation shaft. The UGP had achieved 2 249 lost-time-injury-free days, with a project-to-date total recordable injury frequency rate of 0.54.

During the first quarter of 2026, the ventilation shaft advanced about 491 m of lateral development across the 310-level and 285-level, bringing total lateral development to 1 245 m. At the production shaft, shaft equipping was completed to surface, and headgear internal steel changeover works started.

The lateral development contractor, appointed in the fourth quarter of 2025, started mobilisation activities during the quarter. The contract covers development from the production shaft to the orebody, including extraction, undercut and longhole drilling level infrastructure, underground crushing facilities and associated services.

Lucara also closed a C$165-million equity financing in the quarter and issued $350-million of senior secured bonds, enabling it to repay $220-million of project debt and strengthen the funding position for completion of the UGP.

Key Contracts, Suppliers and Consultants
JDS Energy & Mining Inc (2025 feasibility study technical report, underground design and mineral reserve estimate); SRK Consulting (Canada) Inc (mineral resource estimate); Brandon Chambers of JDS Energy & Mining Inc (qualified person for mineral reserves); Hermanus Grütter, of SRK Consulting (Canada) Inc (qualified person for mineral resources); and Dr Lauren Freeman, Lucara’s VP mineral resources and qualified person.

Contact Details for Project Information
Lucara Diamond Corp, tel +1 604 674 0272 or email info@lucaradiamond.com.