Fundraising of £328k and appointment of joint broker

Karelian Diamond Resources plc (AIM: KDR), the Irish mineral resource exploration and development company which has active exploration programmes for Nickel-Copper-Platinum Group Elements in Northern Ireland and for diamonds in the Kuhmo region of Finland, is pleased to announce a placing to raise a total of £328,747 (before expenses) at 1.5 pence per ordinary share (the “Fundraising”).

HIGHLIGHTS

Karelian has recently, as announced by the Company on 24 June 2024, received an independent report confirming the potential for Nickel-Copper-Platinum Group Elements on its Prospecting Licences in Northern Ireland.

Funds raised will be used to carry out a follow-up exploration programme for Nickel-Copper-Platinum Group Elements on Karelian’s licences.

Funds will also be used by the Company to continue its diamond exploration and development programme in Finland, where, at Kuhmo, it has already discovered a green diamond in till, and appears close to discovering its source and, at Lahtojoki, is awaiting final permission to proceed with the development of a diamond deposit. In addition, funds will be used to provide additional working capital for the Company.

Certain directors of the Company have subscribed for, in aggregate, approximately £54,747 in the Fundraising at 1.5 pence per ordinary share (the “Issue Price”).

In conjunction with the Fundraising, certain parties have also capitalised amounts owed to them totalling £25,252.75 through the issue of new Ordinary Shares at the Issue Price.

Professor Richard Conroy, Chairman of Karelian, commented:

“This fundraising comes at an exciting time for the Company. We have recently announced a very positive independent report on the potential of our Nickel Copper Platinum Group Elements Licences which we look forward to following up immediately. We are also at a very advanced stage in our diamond exploration and development in Finland.”

FUNDRAISING SUMMARY

The Issue Price represents a discount of 38.8 per cent. to the closing mid-market price of 2.45 pence on 28 June 2024, being the last practicable date prior to this announcement. CMC Markets UK plc (“CMC Markets”), trading as CMC CapX, acted as the Company's placing agent in respect of the Fundraising.

Placing of 21,916,479 ordinary shares of €0.00025 each (“Ordinary Shares”) at a price of 1.5 pence per Ordinary Share to raise approximately £328,747 before expenses (the “Placing Shares”).

In conjunction with the Fundraising, certain parties have also capitalised amounts owed to them totalling £25,252.75 through satisfaction of these amounts by the issue of 1,683,516 new Ordinary Shares at the Issue Price (the “Investment Shares”).

Each Placing Share and Investment Share carries a half a warrant to subscribe for one new Ordinary Share at a price of 3 pence per Ordinary Share exercisable for a period of 12 months from the admission to trading on AIM of the Placing Shares and Investment Shares (“Admission”), creating 11,799,997 warrants (the “Fundraising Warrants”).

The Fundraising Warrants have an accelerator clause which will apply should the volume weighted average Ordinary Share price trade for 5 consecutive days at 6 pence or greater following which the Company will have the right to issue Warrant holders with a two week notice to exercise their Fundraising Warrants. Unexercised Fundraising Warrants would be cancelled, and any Fundraising Warrants exercised under this notice must be fully paid up to the Company within 10 business days of notification being made to the Company that the Fundraising Warrants will be exercised.

The Placing Shares and Investment Shares will represent approximately 18.34 per cent. of the enlarged issued share capital of the Company and have been issued to a combination of mainly new investors and certain existing shareholders.

The Fundraising has been conducted within the Company’s existing share authorities and is conditional on Admission becoming effective.

DIRECTORS’ PARTICIPATION IN THE FUNDRAISING

Details of the participations by certain of the Directors in the Fundraising at the Issue Price and their resultant shareholdings immediately following Admission are as follows:

In addition, Professor Richard Conroy and Dr Sorca Conroy have both been issued with 1,824,908 Fundraising Warrants at a price of 3 pence per Ordinary Share exercisable for a period of 12 months from Admission.

APPOINTMENT OF JOINT BROKER

CMC Markets acted as the Company's sole placing agent in respect of the Placing and has been appointed as joint broker to the Company with immediate effect. Peterhouse Capital Limited continues to act as the Company’s joint broker and Allenby Capital continues to act as the Company’s nominated adviser.

ADMISSION, WARRANTS AND TOTAL VOTING RIGHTS

The issue of the Placing Shares and Investment Shares and the possible issue of new Ordinary Shares from the exercise of the Fundraising Warrants will be undertaken pursuant to the Company’s existing share authorities.

An application will be made shortly to the London Stock Exchange for Admission of the Placing Shares and the Investment Shares. It is expected that Admission will become effective and that dealings in the Placing Shares and Investment Shares on AIM will commence on or around 5 July 2024.

The Fundraising Warrants will not be admitted to trading on AIM or any other stock market and will not be transferable. The issuance of the Fundraising Warrants is subject to Admission.

In accordance with the FCA’s Disclosure Guidance and Transparency Rules, the Company confirms that on completion of the Fundraising, and following Admission, the Company’s enlarged issued ordinary share capital will comprise 128,692,744 Ordinary Shares.

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