Last checked at 30 Nov 2012 07:00
30 November 2012 Karelian Diamond Resources Plc ("KDR" or the "Company") Final results for the year ended 31 May 2012
Karelian (AIM: KDR, ESM: KDRI), the diamond exploration company focused on Finland, announces its results for the year ended 31 May 2012, a year of significant progress with continued drilling success.
Highlights:
* Exploration programme in Finland continued to show highly encouraging progress * Identification during the drilling of further potentially diamond bearing mantle xenolith, subsequently confirmed * Basal till sampling programme at Riihivaara resulted in the recovery of 12 garnet indicator minerals * Results add both to the potential of the Seitaper¤ pipe itself and to the overall diamond potential of the Kuhmo area * Two further licences have been acquired and additional licences in the area are under application. * The information arising from the extensive database made available by Rio Tinto has led to your Company also making applications for licences in locations outside the Kuhmo area * The loss after taxation for the year ended 31 May 2012 was €207,980 (2011: €187,261) in line with expectations
Professor Richard Conroy, Chairman, stated:
"During the course of the year the Company made encouraging progress; with a further new large zone of diamond bearing mantle xenoliths in kimberlite identified at Seitaper¤, a positive till sampling programme at Riihivaara, additional licences applied for and excellent results from the Rio Tinto data we are integrating. We look forward to building on these achievements."
Further Information:
Professor Richard Conroy, Chairman, Karelian Tel: +353-1-661-8958 Diamond Resources plc
Simon Clements/Virginia Bull, Merchant Securities Tel: +44-20-7628-2200 Limited (Nomad)
Brian Farrell, IBI Corporate Finance Limited (ESM Tel +353-1-637-7800 Adviser)
John Grant/Karen Kelly/David Lawman , XCAP Tel: +44-20-7101-7070 Securities PLC (Broker)
Michael Padley/Michael Spriggs, Lothbury Financial Tel: +44-20-3440-7620 Services Limited
Don Hall, Hall Communications Tel: +353-1-660-9377
http://www.kareliandiamondresources.com
CHAIRMAN'S STATEMENT
I have pleasure in presenting your Company's Annual Report and Financial Statements for the year ended 31 May 2012. Your Company's exploration programme in Finland continued to show highly encouraging progress during the course of the year with a further new large zone of diamond bearing mantle xenoliths in kimberlite identified at Seitaper¤, a positive till sampling programme at Riihavaara, additional licences applied for, and further integration and analysis of the results from over 53,000 till samples which Rio Tinto has made available to the Company under the terms of the confidentiality agreement entered into with your Company in July 2010.
The Seitaper¤ diamondiferous kimberlite pipe is, at 6.9 hectares, the largest known kimberlite pipe in Finland. Drilling by your Company has confirmed the presence of diamonds in the pipe. The identification during this year's drilling of further potentially diamond bearing mantle xenolith subsequently confirmed as diamondiferous by the recovery of microdiamonds is highly encouraging. The micro-diamonds observed were white in colour, transparent and octahedral. Two of the micro-diamonds including the largest stone were greater than 60 per cent. broken indicating the possibility of larger stone sizes.
A basal till sampling programme at Riihivaara resulted in the recovery of 12 garnet indicator minerals, comprising three G10's, five G9's, one G4, one G3 and two G1's. Six of the positive results, including the G4 pyroxenitic garnet occurred within a single till sample. The adjacent sample had two positive results, including the eclogitic G3 garnet.
These garnets and other mantle-derived minerals are used to locate kimberlites and are referred to as kimberlite indicator minerals. Some of these garnets, the G10's and certain G9's, are created under similar conditions to diamonds within the ultramafic mantle rocks underlying the crust and are therefore used as predictors of the presence of diamonds. There is a strong statistical correlation between G10 and certain G9 garnets, like those found in Riihivaara, and the presence of diamonds.
The sampling programme was undertaken on Karelian's behalf by the Geological Survey of Finland ("GTK") in conjunction with the Company's technical staff. Sample analysis was undertaken in the GTK laboratories.
Eclogite mantle material is significant as it tends to be associated with a much higher grade of diamonds than peridotite mantle material.
These results add both to the Seitaper¤ pipe itself and to the overall diamond potential of the Kuhmo area in which Seitaper¤ is located and indicate that there is more than one source of diamonds in the area. Two further licences have therefore been acquired and additional licences in the area are under application.
The information arising from the continuing review and integration of the extensive database made available by Rio Tinto has led to your Company also making applications for licences in locations outside the Kuhmo area.
Under the terms of the agreement with Rio Tinto, in consideration of Rio Tinto disclosing confidential information to it, Karelian has agreed that Rio Tinto will have the option to earn a 51 per cent. interest in any project identified by Karelian in Finland, Rio Tinto will be expected to pay the direct cash expenditures incurred in developing an identified 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 the in situ
value of 3 million ounces of gold in a JORC compliant resource calculation.
Your Company's diamond exploration programme in Finland is directed towards making comparable discoveries in the Finnish sector of the Karelian Craton to the world class discoveries made in the Russian sector of the Karelian Craton.
Finance
The loss after taxation for the year ended 31 May 2012 was €207,980 (2011: € 187,261) and the net assets as at 31 May 2011 were €4,526,967 (2011: € 4,652,829).
As in previous years, I have supported the working capital requirements of the Company and the balance of the loans due to me at the period end was € 1,007,214. The loans have been made on normal commercial terms.
The other Directors consider, having consulted with the Company's Nominated Adviser and the Company's ESM Adviser, that the terms of these loans are fair and reasonable in so far as the Company's shareholders are concerned.
Auditors
I would like to take the opportunity to thank the partners and staff of Deloitte and Touche for their services to your Company during the course of the year.
Directors, Consultants and Staff
I would also like to express my deep appreciation of the support and dedication of the directors, consultants and staff, which has made possible the continued progress which your Company has achieved.
Future Outlook
Your Company has made significant progress in its diamond exploration programme in Finland and looks forward to build on these achievements.
Professor Richard ConroyChairman30 November 2012INCOME STATEMENTFOR THE YEAR ENDED 31 MAY 2012 2012 2011 € € Operating expenses (194,582) (171,813) Finance income - bank interest receivable 97 - Finance costs - Interest on shareholder loan (13,495) (15,448) Loss Before Taxation (207,980) (187,261) Taxation - - Loss RETAINED for the year (207,980) (187,261) Loss per ordinary share (€0.0023) (€0.0028)STATEMENT OF FINANCIAL POSITIONAS AT 31 MAY 2012 2012 2011 € € Assets Non-current Assets Intangible assets 6,390,694 5,760,090 Investment in subsidiaries 4 4 Property, plant and equipment 501 669 6,391,199 5,760,763 Current Assets Trade and other receivables 47,382 12,536 Cash and cash equivalents 10,054 745,908 57,436 758,444 Total assets 6,448,635 6,519,207 Equity and Liabilities Capital and reserves Called up share capital 922,083 922,083 Share premium 4,621,158 4,621,158 Share based payments reserve 375,039 292,921 Retained earnings (1,391,313) (1,183,333) Total equity 4,526,967 4,652,829 Non-current liabilities Financial liabilities 1,007,214 1,107,373 Total non-current liabilities 1,007,214 1,107,373 Current liabilities Trade and other payables 914,454 759,005 Total Current Liabilities 914,454 759,005 Total Liabilities 1,921,668 1,866,378 Total Equity and Liabilities 6,448,635 6,519,207CASH FLOW STATEMENTFOR THE YEAR ENDED 31 MAY 2012 2012 2011 € € Cash used in operations (58,631) (23,244) Tax paid - - Net cash used in operating activities (58,631) (23,244) Cash flows from investing activities
Investment in exploration and evaluation assets (509,687) (381,343)
Net cash used in investing activities (509,687) (381,343) Cash flows from financing activities Issue of share capital - 1,136,623 (Repayment)/Advances of Shareholder loans (125,000) 42,424 Interest paid (42,633) (46,259) Interest received 97 - Net cash generated from financing activities (167,536) 1,132,788
(Decrease)/Increase in cash and cash equivalents (735,854) 728,201
Cash and cash equivalents at beginning of year 745,908 17,707 Cash and cash equivalents at end of year 10,054 745,908
Notes to the Financial Statements
1. Publication of non-statutory accounts
The financial information set out in this preliminary announcement is abbreviated from the accounts as defined in Section 19 of the Companies (Amendment) Act 1986.
The financial information for the year ended 31 May 2012 have been extracted from the Company's financial statements to that date which have received an unqualified auditors' report but have not yet been delivered to the Registrar of Companies.
2. Earnings per share
The calculation of the loss per share of €0.0023 (2010 - €0.0027) is based on the loss for the financial year of €207,980 (2011 - €187,261) and the weighted average number of ordinary shares in issue on a basic and fully diluted basis during the year of 92,308,242 (2011 - 68,805,565).
The effect of share options and warrants is anti-dilutive.
3. Dividends
No dividends were paid or are proposed in respect of the year ended 31 May 2012
4. Copies of Accounts
A copy of the Annual Report and Financial Statements will be available on the Company's website www.kareliandiamondresources.com and will be available from the Company's registered office, 10 Upper Pembroke Street, Dublin 2. It will also be forwarded to shareholders who requested a hard copy. Notice of the Annual General Meeting to be held on 13 December 2012 and Proxy Form was sent to shareholders on 21 November 2012 and are also available on the website.
XLON