Last checked at 25 Feb 2009 07:00
25 February 2009 Karelian Diamond Resources plc ("the Company") Half-yearly results for the six months ended 30 November 2008
Chairman's Statement
I have great pleasure in presenting your Company's half-yearly report for the six months ended 30 November 2008. During the period your Company continued to progress its diamond exploration programme in Finland with the objective of discovering a world-class diamond deposit in the Finnish sector of the Karelian Craton.
The Kuhmo Area
To date over 1,500m of core drilling in 24 holes has accurately delineated the Seitaper¤ pipe to over 115m in depth, and provided extensive intersections of Hypabyssal Kimberlite which contain significant quantities of mantle material, including Harzburgite and Lherzolite Mantle Peridotite containing G9 and G10 garnets. This material originates in the diamond stability zone of the Upper Mantle and demonstrates the capacity of the Seitaper¤ Kimberlite to carry diamond-bearing material. With its 6.9 hectare surface outline, Seitaper¤ represents the largest known kimberlite pipe in Finland, being approximately three times bigger than the next largest pipe.
The Seitaper¤ kimberlite has yielded both highly positive mineral chemistry results (G9/G10 garnets and DI-chromites) and significant micro-diamond results. Further analysis of core samples is ongoing.
Historical work is limited in the Kuhmo area of Eastern Finland but, when taken together with our new results, this demonstrates the area's potential for diamondiferous kimberlites. In addition to our existing claims and reservations in the area, we have also applied for licenses covering the other two known kimberlite occurrences, namely Kimberlites #18 (Havukkasuo) and #24 (Lentiira).
The Joensuu Area
Your Company also continues with its exploration programme in the Joensuu area of Eastern Finland where kimberlite indicator minerals, including a G10 Harzburgite garnet and eight G9 Lherzolite garnets, have been identified in recent sampling programmes. Taken in conjunction with previous results from the area the latest data increases the likelihood that the Joensuu area could contain a number of kimberlite pipes.
Finance and Results
The results for the six months ended 30 November 2008 are set out below. The loss for the period was €112,612 (2007: €101,500). During this period I have supported the working capital requirements of the Company and in the period under review have advanced aggregate loans amounting to €582,914.
The loans have been made under normal commercial terms in accordance with a letter of support dated 11 November 2008. This letter provides confirmation of support from me for the current financial year ending 31 May 2009. The loans have been and will continue to be made on normal commercial terms. The interest on the loans is currently accruing at a rate of 8.25 per cent. per annum. The loans may be repaid at any time but I have confirmed to the Company that I will not request repayment, other than in exceptional circumstances, within a period of less than one year.
The other directors consider, having consulted with the Company's Nominated Adviser, that the terms of the loan are fair and reasonable in so far as the Company's shareholders are concerned.
Directors and Staff
I would like to thank my fellow directors, staff and consultants for their support and dedication. They have made the success of the Company possible. I look forward to the future with confidence
Professor Richard ConroyChairman25 February 2009Further enquiries:Karelian Diamond Resources plc Tel: 00 353 1 661 8958Professor Richard Conroy John East & Partners Limited Tel: 020 7628 2200Simon Clements / Virginia Bull City Capital Corporation Limited Tel: 020 3178 3399Charles Dampney Lothbury Financial Limited Tel: 020 7011 9411Ron Marshman / Michael Padley UNAUDITED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 NOVEMBER 2008
Six months Six months Year ended ended ended 31 May 30 November 30 November 2008 2008 2007 (Audited) (Unaudited) (Unaudited) € € € OPERATING EXPENSES (112,783) (109,917) (280,720) Other Income 171 8,417 12,082 LOSS BEFORE TAXATION (112,612) (101,500) (268,638) Taxation - - - LOSS RETAINED FOR THE PERIOD (112,612) (101,500) (268,638) Loss per ordinary share - Basic and (€0.0019) (€0.0018) (€0.0046)diluted UNAUDITED BALANCE SHEETAS AT 30 NOVEMBER 2008 30 November 30 November 31 May 2008 2007 2008 (Unaudited) (Unaudited) (Audited) € € € ASSETS Non-current Assets Intangible assets 4,614,881 3,858,785 4,221,785 Financial assets 4 4 4 Property, plant and equipment 1,089 1,333 1,173 4,615,974 3,860,122 4,222,962 Current Assets Trade and other receivables 46,708 4,146 50,441 Cash and cash equivalents 108,614 602,354 35,430 155,322 606,500 85,871 Total Assets 4,771,296 4,466,622 4,308,833 EQUITY AND LIABILITIES Capital and Reserves Called up share capital 605,416 605,416 605,416 Share premium 3,801,202 3,801,202 3,801,202 Share based payments reserve 128,685 62,320 87,626 Retained losses (741,477) (461,727) (628,865) Total Equity 3,793,826 4,007,211 3,865,379 Non-current Liabilities Trade and other payables: Amounts 582,914 329,867 271,135falling due after more than one year Total non-current liabilities 582,914 329,867 271,135 Current Liabilities Trade and other payables: Amounts 394,556 129,544 172,319falling due within one year Total Current Liabilities 394,556 129,544 172,319 Total Liabilities 977,470 459,411 443,454 Total Equity and Liabilities 4,771,296 4,466,622 4,308,833UNAUDITED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 NOVEMBER 2008
Six months Six months Year ended ended ended 31 May 30 November 30 November 2008 2008 2007 (Audited) (Unaudited) (Unaudited) € € € Cash generated/(used by) from 121,032 191 (196,010)operations Tax paid - - - Net cash generated from/ (used in) 121,032 191 (196,010)operating activities Cash flows from investing activities Investment in mineral interest (359,626) (241,062) (553,053)
Net cash used in investing activities (359,626) (241,062) (553,053)
Cash flows from financing activities Shareholder loan advances 311,778 (701,431) (760,163) Issue of share capital - 1,429,254 1,429,254 Net cash from financing activities 311,778 727,823 669,091
Increase/(Decrease) in cash and cash 73,184 486,952 (79,972) equivalents
Cash and cash equivalents at beginning 35,430 115,402 115,402 of year
Cash and cash equivalent at year end 108,614 602,354 35,430
Notes to the Financial Statements
1. Publication of non-statutory accounts
The financial information set out in this document does not comprise the statutory accounts of the Company.
2. Earnings per share
The calculation of the loss per ordinary share of €0.0019 (2007: loss €0.0018) is based on the loss for the half year of €112,612 (2007: loss €101,500) and the weighted average number of ordinary shares on a basic and fully diluted basis during the year of 60,541,676 (2007: 55,285,009). Share options and warrants are not included in the calculation of fully diluted shares since the Company incurred a loss in both periods which results in these potential shares being anti-dilutive.
3. Dividends
No dividends were paid or are proposed in respect of the period ended 30 November 2008.
4. Copy of half yearly report
A copy of the half yearly report 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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