Karelian shared double to 0.75 pence on Friday after raises GBP290,000

(Alliance News) - Karelian Diamond Resources PLC on Friday said it has raised GBP290,000 via the issue unsecured convertible loan notes to new and existing investors.

The diamond and natural resources exploration company focused on Finland and Ireland said it had undertaken the fundraise in place of a conventional placing of new equity.

"In making this decision, the board was mindful of the absolute need to avoid immediate and potentially material dilution for shareholders, with Karelian's share price currently at a level which the board believes undervalues the current and future prospects of the company," Karelian said.

In response, Karelian shares doubled in London on Friday to 0.75 pence, bringing its market capitalisation to GBP1.47 million. Shares are up 36% year-to-date and 2.7% over the past 12 months.

Overall, Karelian said it has identified "a clear work programme and strategy" for exploration assets in Finland. The company said it is focused on "carefully progressing exploration work," as it looks towards a "recovery in the retail sentiment towards natural diamonds".

Karelian is seeking an industry focused partner to progress its assets including the Lahtojoki Deposit.

This strategy includes as initial drilling programme in the current weather window at the geophysical Anomaly 5 target in the Kuhmo region, Karelian said.

Karelian remains in discussions to extend its existing convertible loan of GBP112,500 with Conroy Gold and Natural Resources PLC.

The companies have agreed in principle to extend the term of the CLN to November 30 at a minimum. The parties are also in discussions to amend the conversion price of the CLN.

Chair Brendan McMorrow said: "The board welcomes this fundraising which supports the board's view of the company's assets being materially undervalued at present as both new and existing shareholders have taken part at a clear premium to the current market price of our ordinary shares. The company is looking forward to progressing with the work programmes on its highly prospective nickel, copper and platinum group element targets in Northern Ireland together with the ongoing drilling programme in the current weather window at its Anomaly 5 prospect in Finland. The completion of this fundraise at a significant premium underpins the board's confidence regarding the prospects for the company."

By Aidan Lane, Alliance News reporter

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