Last checked at 5 Nov 2009 07:00
5 November 2009 Karelian Diamond Resources Plc ("KDR" or the "Company") FINAL RESULTS FOR THE YEAR ENDED 31 MAY 2009 A PERIOD OF FURTHER POSITIVE FINDINGS
Karelian (AIM: KDR), the diamond exploration company focused on Finland, announces its results for the year ended 31 May 2009.
Highlights:
* Capacity Of Seitapera Pipe To Carry Diamond-Bearing Material Clearly Demonstrated * Grade Distribution Likely To Be Highly Variable * Potential For Larger Diamonds To Be Present * Licence Applications To Cover Two Other Known Kimberlites In Kuhmo Area
Professor Richard Conroy, Chairman, said:
"As a result of the downturn in the diamond market since the final quarter of 2008 we are, wherever possible, limiting our activities to office-based work in order to contain costs whilst we continue to assess additional opportunities in Finland. Given that the findings of our work to date have been positive, both at Seitapera and in the Kuhmo area generally, we have therefore submitted additional licence applications over areas of particular interest. These include two other known kimberlites in the Kuhmo area - kimberlites 18 (Havukkasuo) and 24 (Lentiira).
"The outlook for diamonds is beginning to improve. Although stocks of both rough and polished stones remain high, we are encouraged by recent comments from De Beers that the pace of recovery in the rough diamond market is beginning to pick up. This is a particularly significant development given that the diamond industry was among the hardest hit by the global financial crisis."
Further enquiries:
Karelian Diamond Resources Plc Tel: 00 353 1 661 8958 Professor Richard Conroy Merchant John East Securities Limited Tel: 020 7628 2200 Simon Clements / Virginia Bull City Capital Corporation Limited Tel: 020 3178 3399 Charles Dampney Lothbury Financial Limited Tel: 020 7011 9411 Ron Marshman / Michael Padley
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 2009. This was a year during which your Company made further progress with its diamond exploration programme in Finland and clearly demonstrated the capacity of the Seitapera kimberlite pipe to carry diamond-bearing material.
A full mineralogical study of all the Seitapera micro-diamonds recovered to date, including the 67 micro- and macro-diamonds recovered from a 100.20 kg sample as reported in July 2008, has been completed at MCC Geoscience of Vancouver, Canada. The results indicate that the grade distribution in the Seitapera Kimberlite is likely to be highly variable, a feature common to the diatreme root zones of many kimberlites. At this point, however, it is not possible to estimate an overall bulk diamond grade.
These findings suggest that there is potential for larger diamonds to be present in the Seitapera pipe, however, the majority of the kimberlite, including the new northeast extension, remains untested. In view of the present state of the diamond market, the Company will not at this stage proceed with the extensive further drilling and micro-diamond sampling that will be required to adequately test a kimberlite of this size (6.9ha). Nevertheless, the Company will continue with evaluation work and advancing its diamond claim applications in Finland.
There has been only limited historical diamond exploration in the Kuhmo area, but when this is considered in conjunction with the results achieved by Karelian, the area's potential for diamondiferous kimberlites is clearly demonstrated. As a result of these encouraging indications, your Company has applied for licences covering the two other known Kimberlite occurrences in the area - Kimberlites 18 (Havukkasuo) and 24 (Lentiira).
The Company also continues to explore in the Joensuu area of Eastern Finland, where recent sampling programmes recovered kimberlite indicator minerals, including G9 and G10 garnets. These results, taken in conjunction with those from earlier work, increase the likelihood that the Joensuu area could also contain a number of kimberlite pipes.
Financials
The loss after taxation for the year ended 31 May 2009 was EUR194,126 (2008: EUR 268,638) and the net assets as at 31 May 2009 were EUR3,712,312 (2008: EUR 3,865,379).
As in previous years, I have supported the working capital requirements of the Company and in the period under review have advanced loans to the value of EUR 238,022 and the balance of the loans due to me at the period end was EUR719,993. The loans have been made on normal commercial terms.
The other Directors consider, having consulted with the Company's Nominated 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 of thanking 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
Despite the downturn in the diamond market, we will continue to evaluate opportunities to enhance shareholder value. In view of the positive findings to date, both at Seitapera and in the Kuhmo area generally, we will press on with our applications for licences over the other known kimberlites in the Kuhmo area as well as licence applications in the Joensuu area. We look forward with confidence to a successful future.
Professor Richard ConroyChairman5 November 2009INCOME STATEMENT
FOR THE YEAR ENDED 31 MAY 2009
2009 2008 EUR EUR OPERATING EXPENSES (194,342) (280,720) Other income 216 12,082 LOSS BEFORE TAX (194,126) (268,638) Taxation - - LOSS RETAINED FOR THE YEAR (194,126) (268,638) Loss per ordinary share (EUR0.0032) (EUR0.0046) Balance Sheetat 31 May 2009 2009 2008 EUR EUR ASSETS Non-current Assets Intangible assets 4,883,865 4,221,785 Financial assets 4 4 Property, plant and equipment 1,089 1,173 4,884,958 4,222,962 Current Assets Trade and other receivables 10,222 50,441 Cash and cash equivalents 7,666 35,430 17,888 85,871 Total assets 4,902,846 4,308,833 EQUITY AND LIABILITIES Capital and Reserves Called up share capital 605,416 605,416 Share premium 3,801,202 3,801,202 Share based payments reserve 128,685 87,626 Retained earnings (822,991) (628,865) Total equity 3,712,312 3,865,379 Non-current Liabilities Trade and other payables: Amounts falling due 719,993 238,022after more than one year Total non-current liabilities 719,993 238,022 Current liabilities Trade and other payables: Amounts falling due 470,541 205,432within one year Total Current Liabilities 470,541 205,432 Total Liabilities 1,190,534 443,454 Total Equity and Liabilities 4,902,846 4,308,833 Cash Flow Statement
FOR the Year Ended 31 May 2009
2009 2008 EUR EUR Cash generated by/(used in) operations 118,876 (196,010) Tax paid - - Net cash generated by/(used in) operating 118,876 (196,010)activities Cash flows from investing activities Investment in exploration and evaluation (628,611) (553,053) Net cash used in investing activities (628,611) (553,053) Cash flows from financing activities Issue of share capital - 1,429,254 Shareholder loans 481,971 (760,163) Net cash generated from financing activities 481,971 669,091 Decrease in cash and cash equivalents (27,764) (79,972)
Cash and cash equivalents at beginning of year 35,430 115,402
Cash and cash equivalents at end of year 7,666 35,430
Notes to the Financial Statements
1. Publication of non-statutory accounts
The financial information set out in this preliminary announcement is abbreviated accounts as defined in Section 19 of the Companies (Amendment) Act 1986.
The financial information for the period ended 31 May 2009 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 ordinary share of EUR0.0032 (2008 - EUR0.0046) is based on the loss for the financial year of EUR194,126 (2008 - EUR268,638) and the weighted average number of ordinary shares on a basic and fully diluted basis during the year of 60,541,676 (2008 - 57,913,343).
Since the Company incurred a loss the effect of share options and warrants would be anti-dilutive.
3. Dividends
No dividends were paid or are proposed in respect of the period ended 31 May 2009.
4. Copy 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.
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