Karelian Regulatory News (KDR)

29 Oct 2008 07:00

29 October 2008 Karelian Diamond Resources plc ("Karelian Diamond Resources" or the "Company") DELINEATION DRILLING AT SEITAPERƒâ€ž FINDS PIPE EXTENSION * Eight holes intersect mantle-bearing kimberlite in central portion of main pipe * Similar to material that yielded high micro- and macro-diamond count in July * Detailed examination of core prior to despatch of samples for diamond analysis

Karelian (AIM: KDR) announces that it has discovered a significant north-east extension to its Seitaperƒ¤ diamondiferous kimberlite pipe in Finland during the delineation drilling programme. Seitaperƒ¤ is already the largest known kimberlite pipe in Finland, with a surface area of 6.9ha.

The new north-east extension, which coincides with a discrete, circular magnetic anomaly 100m in diameter, was previously thought to be a kimberlite dyke after sampling returned a positive micro-diamond result in April this year. However, the latest drilling returned a continuous 80m intersection of kimberlite across this structure, suggesting that it represents a further small kimberlite, or "blow", within the Seitaperƒ¤ complex.

The main objective of the extensive delineation drilling programme was to accurately delineate the central portion of the Seitaperƒ¤ pipe which yielded 61 micro- and six macro-diamonds in July from a single 100kg sample of kimberlite. A total of 947m of drilling was completed in 14 holes to a maximum depth of 115m, intersecting 583m of kimberlite, representing approximately two tonnes of material.

Eight holes drilled across the central portion of the main pipe intersected substantial zones of primary kimberlite containing abundant mantle xenoliths, similar in nature to the material which yielded the positive diamond result in July.

The delineation drilling has now been completed and all the core has been provisionally logged and photographed. Results are being integrated into a detailed three-dimensional computer-generated model of the Seitaperƒ¤ pipe's structure. Following more detailed examination of the core, representative intersections will be selected for micro-diamond sampling, and these will be submitted for analysis in due course.

The drilling was laid out in a series of parallel lines 25-30m apart, with holes drilled mainly at an inclination of 50 degrees, perpendicular to the strike of the kimberlite pipe. Visual examination of the core has enabled the Company to establish kimberlite/wall-rock contacts at 15 locations, at true vertical depths of between 15m and 65m.

Professor Richard Conroy, Chairman of Karelian, commented: "Completion of the latest drilling adds to our understanding of the structure of the Seitaperƒ¤ kimberlite, and has provided significant volumes of material for analysis as part of our detailed evaluation of this body. All the drilling intersected parts of the kimberlite body as anticipated, and the significant extension to the existing pipe is an unexpected bonus."

This release has been approved by Dr. Stephen Grimmer of the Company's technical staff, who holds a PhD in Geochemistry/MSc in Exploration Geology, in accordance with the guidance note for Mining, Oil & Gas Companies issued by the London Stock Exchange in respect of AIM Companies, which outlines standards of disclosure for mineral projects.

Further Info: Professor Richard Conroy, Chairman Karelian Diamond Resources plc Tel: + 353-1-661-8958

Charles Dampney, City Capital Corporation Limited Tel: + 44-20-7842-5867

Jeffrey Coburn/Virginia Bull, John East &Partners Limited Tel: + 44-20-7628-2200

Ron Marshman/Michael Padley, Lothbury Financial Tel: + 44-20-7011-9411

http://www.kareliandiamondresources.com