Karelian Regulatory News (KDR)

26 June 2014 CONFIDENTIALITY AGREEMENT WITH RIO TINTO MINING AND EXPLORATION LIMITED EXTENDED TO 2020 * Amendment Letter Signed with Rio Tinto to Extend Confidentiality Agreement (with Back in Rights) * Under the Confidentiality Agreement Confidential Information and Geological Samples may be Made Available to Karelian by Rio Tinto * 51 per cent. Back in Agreement with Rio Tinto for any Major Diamond or Other Mineral Discovery in Finland __________________________________________________________________________________ Karelian Diamond Resources plc ("Karelian") (AIM:KDR, ESM: KDR.I), the diamondexploration company focussed on the Karelian Craton in Finland, is pleased toannounce that it has signed an amendment letter to extend the existingConfidentiality Agreement (with Back in Rights), as announced on 22 July 2010,with Rio Tinto Mining and Exploration Limited ("Rio Tinto") until 30 June 2020. Under the Confidentiality Agreement, Rio Tinto may disclose to Karelianconfidential information and physical geological samples relating toexploration in Finland for the purpose of Karelian considering that informationin relation to Karelian's potential and existing exploration programmes inFinland. In consideration of Rio Tinto disclosing the confidential information to it,Karelian has agreed that Rio Tinto will have the option (exercisable at itsdiscretion) to earn a 51 per cent interest in any project identified byKarelian in Finland by Rio Tinto paying the direct cash expenditures incurredin developing the project subject to the following conditions: 1. For diamond projects the option will be triggered if Karelian completes 10 tons or more of bulk sampling for diamond exploration; and 2. For all other minerals the option will be triggered if Karelian discovers a resource with an in situ value that is equal to or greater than 3 million ounces of gold in a JORC compliant resource calculation. The Karelian Craton, which is the focus of Karelian's exploration programme inFinland extends across Finland and northwest Russia and is comparable in sizeto the diamond rich Slave Lake Craton in Canada. Two world class diamonddeposits, Lomonosova and the Grib Pipe, have been discovered in the Russiansector of the Karelian Craton and the Russian company, Alrosa, which is theworld's largest diamond miner, has indicated that this new diamond region willrepresent almost all its future growth. Professor Richard Conroy, Chairman,commented: "I am delighted that thisConfidentiality Agreement with Rio Tintohas beenextended until 2020. This has been a very positive relationship in which theconfidential information and physical samples made available to Karelian havebeen a majoraddition to Karelian's existing knowledge base and mineralexploration programme and to its objective of making a major diamond discoveryin the Finnish sector of the Karelian Cratoncomparable to the world classdiscoveries made on the Russian side." Further Information: Professor Richard Conroy, Chairman, Karelian Diamond Tel: +353-1-661-8958Resources plc Virginia Bull / Simon Clements, Sanlam Securities UK Tel: +44-20-7628-2200Limited (Nomad) Ger Heffernan, IBI Corporate Finance Limited (ESM Tel: +353-7662-34800Adviser) Jon Belliss, Hume Capital Securities plc (Broker) Tel: +44-20-3693-1470 Michael Padley, Lothbury Financial Services Limited Tel: +44-20-3440-7620 Don Hall, Hall Communications Tel: +353-1-660-9377

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