Half-year Results

Karelian Diamond Resources plc (AIM: KDR), the diamond exploration company focused on Finland, announces its unaudited results for the six months ended 30 November 2023. Details of these can be found below and a full copy of the interim results statement can be viewed on the Company’s website (www.kareliandiamondresources.com). The period was one of steady progress, particularly in working towards opening the first diamond mine.

Highlights of the half-year period included:

The proceedings to establish the mining concession for the applied for area at the Lahtojoki diamond deposit are now at an advanced stage.

Mining concession at Lahtojoki is expected to be approved, now the last of the compensation appeals are being finalised. This follows prior approvals by TUKES, the Finnish mining authority.

Exploration programme in the Kuhmo region of Finland continues to be highly encouraging with results from basal till sampling suggesting that two of the sample locations may be close to the source of the green diamond the Company discovered.

Work continues in Northern Ireland on the nickel, copper and platinum mineralisation anomalies.

Post Period: 3 year extension granted for Exploration Permit covering the Riihivaara Kimberlite discovery and adjacent areas.

Professor Richard Conroy, Chairman of Karelian, said:

“We are very pleased with the Company’s progress regarding the planned development of the mine at the Lahtojoki diamond deposit, the work to find the source of the green diamond and, post period, the extension of the exploration permits which will allow the Company to continue its work on the emerging kimberlite field at Kuhmo. Overall, it has been a very satisfactory period for the exploration team.”

Further Information: Karelian Diamond Resources plc Professor Richard Conroy, Chairman +353-1-479-6180 Allenby Capital Limited (Nomad) Nick Athanas / Nick Harriss +44-20-3328-5656 Peterhouse Capital Limited (Broker) Lucy Williams / Duncan Vasey +44-20-7469-0930 Lothbury Financial Services Michael Padley +44-20-3290-0707 Hall Communications Don Hall +353-1-660-9377 http://www.kareliandiamondresources.com

Chairman’s Statement

Dear Shareholder,

I have great pleasure in presenting the Company’s Half-Yearly Report and condensed Financial Statements for the half year ended 30 November 2023.

The period was one of continued progress in relation to the development of the Lahtojoki diamond deposit in the Kuopio-Kaavi region of Finland. The proceedings to establish the mining concession are now at an advanced stage. A mining concession application has already been approved by TUKES (the Finnish mining authority). Following the order of TUKES, the National Land Survey has carried out the process in relation to ground rental compensation for the local landowners and is now finalising the appeals by two landowners regarding the amount of compensation and the mine boundary.

Land possession for the duration of the mine is a major step forward in the Company’s proposed development of the Lahtojoki deposit. The diamond mining project covers 71 hectares (c.176 acres) with the actual kimberlite pipe having a surface area of 16 hectares (c.40 acres). The deposit, as well as containing high quality colourless gem diamonds, contains pink diamonds which are highly sought after and can command prices up to 20 times that of normal colourless gem diamonds.

I believe the development of a diamond mine at Lahtojoki will not only bring significant benefits to the Company, but also to the entire surrounding Kuopio-Kaavi area and, when in production, is expected to be the first diamond mine in Europe outside Russia.

The Company’s exploration programme in the Kuhmo region of Finland continues to be highly encouraging up-ice of the Company’s discovery of a green diamond. Results from the Company’s basal till sampling suggest that two of the sample locations may be close to the source of the green diamond.

The Company’s nickel, copper and platinum mineralisation exploration project in Northern Ireland also continues to be very encouraging.

Exercise of Warrants

During the period the Company received warrant exercise notices to subscribe for a total of 600,000 new ordinary shares of nominal value €0.00025 each at an exercise price of 2 pence per ordinary share, as announced by the Company on 11 October 2023.

Finance

During the period there was a fundraising of £250,000 (including £100,000 from Board members) at 2.5 pence per ordinary share.

Following admission of these new ordinary shares, in relation to the fundraising and exercised warrants, the Company had a total of 105,092,749 ordinary shares in issue.

The loss after taxation for the half year ended 30 November 2023 was €136,351 (30 November 2022: loss of €168,786) and the net assets as at 30 November 2023 were €9,832,149 (30 November 2022: €9,312,017).

Directors and Staff

I would like to thank my fellow directors, staff and consultants for their support and dedication, which has enabled the continued success of the Company.

Future Outlook

I look forward to the Company continuing to progress the planned development of the Lahtojoki diamond deposit and also to further success with its diamond exploration in Finland and the identification of a kimberlite pipe, as well as to further positive results from the exploration programme for nickel, copper and platinum group metals in Northern Ireland.

Yours faithfully,

Professor Richard Conroy

Chairman

Condensed income statement

Share capital

Authorised share capital:

The authorised share capital at 30 November 2021 compromised 7,301,301,041 ordinary shares of €0.00025 each, and 317,785,034 deferred shares of €0.00999 each* (€5,000,000), (30 November 2020: 7,301,301,041 ordinary shares of €0.00025 each, and 317,785,034 deferred shares of €0.00999 each* (€5,000,000)).

*Capital reorganisation:

Following approval at an Annual General Meeting (“AGM”) held on 9 December 2016, the Company reorganised its share capital by subdividing and reclassifying each issued ordinary share of €0.01 as one ordinary share of €0.00001 each and one deferred share of €0.00999 each. The Deferred Shares have no right to vote, attend or speak at general meetings of the Company and have no right to receive any dividend or other distribution, and have only limited rights to participate in any return of capital on a winding-up or liquidation of the Company, which will be of no material value. No application was made to the London Stock Exchange for admission of the Deferred Shares to trading on the AIM.

Consolidated shares:

On 21 December 2017, the Company passed a Special Resolution at the Company’s AGM, that all of the ordinary shares of €0.00001 each in the capital of the Company, whether issued or unissued were consolidated into New Ordinary Shares of €0.00025 each in the capital of the Company (“consolidated shares”) on the basis of one consolidated share for every 25 existing ordinary shares. Following the consolidation of the ordinary shares on 21 December 2017, the warrants in issue were consolidated into one consolidated warrant for every 25 existing warrants. The exercise price in relation to the warrants was also adjusted at this time (see Note 2).

Share and Warrant issues during the period:

During the period ended 30 November 2023, the Company raised £150,000 through the issue of 6,000,000 ordinary shares of the company at a price of £0.025 per Subscription Share. In addition, Professor Richard Conroy and Dr Sorca Conroy both subscribed for 2,000,000 shares each in addition to this amount bringing the total amount raised to £250,000. As part of this fundraise, 10,000,000 warrants at £0.04 per share were issued, the value of which at date of issue was deducted from share premium in line with the Company’s accounting policies. There were no share issues in the period ending 30 November 2022.

Share premium

Share based payment reserve

Retained losses

The accompanying notes form an integral part of these condensed financial statements.

1 Accounting policies

Reporting entity

Karelian Diamond Resources plc (the “Company”) is a company domiciled in Ireland.

Basis of preparation and statement of compliance

The condensed financial statements for the six months ended 30 November 2023 are unaudited.

The condensed financial statements are presented in Euro (“€”). € is the functional currency of the Company.

Going concern

The Company recorded a loss of €136,351 for the six-month period ended 30 November 2023 (30 November 2022: loss of €168,786). The Company had net current liabilities of €1,379,302 at that date (30 November 2022: €1,677,047).

Statement of compliance

Recent accounting pronouncements

Amendments to IAS 1 Presentation of Financial Statements: Classification of liabilities as current or non-current and classification of liabilities as current or non-current – Effective date 1 January 2024.

2 Profit/(loss) per share

Basic earnings per share

Diluted earnings/(loss) per share

The effect of share options and warrants is anti-dilutive.

3 Intangible assets

Exploration and evaluation assets

4 Commitments and Contingencies

At 30 November 2023, there were no capital commitments or contingent liabilities (31 May 2023: No capital commitments or contingencies liabilities). Should the Company decide to develop the Lahtojoki project, an amount of €40,000 is payable by the Company to the vendors of the Lahtojoki mining concession.

5 Convertible Loan

On 26 May 2023, the Company entered into a convertible loan note agreement for a total amount of €129,550 (£112,500) with Conroy Gold and Natural Resources P.L.C. which is both a shareholder in the company and has a number of other connections as noted in Note 7. The convertible loan note is unsecured, has a term of 18 months and attracts interest at a rate of 5% per annum which is payable on the maturity or conversion of the convertible loan. The conversion price is 5 pence. The shareholder has the right to seek conversion of the principal amount outstanding on the convertible loan note and all interest accrued at any time during the term.

The amount of €10,304 relates to derivative liability attached to the total convertible loan note at date of issue above and the net amount of €119,246 was recorded as the value of the convertible loan at 31 May 2023. The value of the convertible loan including interest at 30 November 2023 was €122,483 and is classified as a non-current liability.

6 Warrant liabilities

The fair value of the warrants in issue as at 30 November 2023 was €95,606. 10,000,000 warrants at a price of £0.04 were issued during the period and 600,000 warrants were exercised during the period at a price of £0.02.

7 Related party transactions

(a)Apart from Directors’ remuneration, equity investment from Directors, and loans from shareholders, (who are also Directors), there have been no contracts or arrangements entered into during the six-month period in which a Director of the Company had a material interest.

• The Company shares accommodation and staff with Conroy Gold and Natural Resources plc which have certain common Directors and shareholders. For the six-month period ended 30 November 2023, Conroy Gold and Natural Resources plc incurred costs totalling €49,596 (30 November 2022: €34,846) on behalf of the Company. These costs were recharged to the Company by Conroy Gold and Natural Resources plc. At 30 November 2023, Conroy Gold and Natural Resources plc was owed €69,870 (30 November 2022: €234,651) by the Company.
• In May 2023, Conroy Gold and Natural Resources P.L.C. converted amounts owing to it equivalent to €143,943 (£125,000) into ordinary equity in the Company and a further €129,550 (£112,500) into a convertible loan instrument as detailed in Note 5.

8 Subsequent events

There were no material events subsequent to the reporting date which necessitate revision of the figures or disclosures included in the financial statements.

9 Approval of the condensed financial statements

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