Karelian Regulatory News (KDR)

KARELIAN DIAMOND RESOURCES PLC - Half-yearly Report

PR Newswire

London, February 29

29 February 2016

Karelian Diamond Resources plc

(“Karelian” or “the Company”)

Half-yearly results for the six months ended 30 November 2015

Karelian Diamond Resources plc (AIM: KDR; ESM: KDR.I), the diamond exploration company focused on Finland, announces its results for the six months ended 30 November 2015.

Highlights:

Commenting, Chairman, Professor Richard Conroy said:

“The Company has made excellent progress with its diamond exploration programme in Finland, especially at Rihiivaara which is particularly exciting.”

For further information please contact:

Visit the website at: www.kareliandiamondresources.com

CHAIRMAN’S STATEMENT

Dear Shareholder,

I have great pleasure in presenting your Company’s Half-Yearly Report for the six months ended 30 November 2015. During this period excellent progress continued to be made with your Company’s diamond exploration programme in Finland, the objective of which is to discover diamond deposits. The licence areas in Finland have similar geology to that in which world class diamond deposits have been discovered on the Russian side of the border.

Diamond Exploration Programme

Your Company’s primary exploration area in Finland is in the Karelian Craton in North Eastern Europe.

The Karelian Craton extends across Finland and northwest Russia. It is comparable in size to the diamond rich Slave Lake Craton in Canada. The Russian diamond company ALROSA Company Limited (Closed Joint-Stock Company), which is now the world’s largest diamond miner, and owns the Lomonosova deposit in the Karelian Craton, has indicated previously that the Karelian Craton region will represent almost all of its future growth.

Your Company’s diamond exploration programme covers five regions in Finland. At Seitaperä in Eastern Finland, the programme has outlined the largest diamondiferous pipe yet discovered in Finland.

Exploration results from your Company’s nearby Riihivaara target in Eastern Finland during the period covered by this report have been particularly exciting. High concentrations of kimberlite indicator minerals (“KIM”) have been recovered suggesting the possible presence in the area of a new kimberlite source.

Analysis by Rio Tinto Mining and Exploration in their Melbourne Laboratories of samples collected by your Company have identified high category rating diamondiferous kimberlite indicator minerals, which is highly encouraging.

Exploration on our other diamond targets in Finland continues, particularly in the Kuhmo and Kuusamo areas of Eastern Finland.

Agreement with Rio Tinto Mining & Exploration

Under the agreement, Rio Tinto discloses to Karelian confidential information and physical geological samples relating to exploration in Finland for the purpose of the Company considering that information in relation to its own potential and existing exploration programmes in Finland.

To date this information has included data on over 53,000 till samples, over 600 analytical results, data on KIM from over 200 locations and records on the discovery of 122 diamonds. The integration of this data with your Company’s own data has been of great benefit.

In consideration of Rio Tinto disclosing the 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 in Finland by Rio Tinto paying the direct cash expenditures incurred in developing the project, subject to the following conditions:

1. For diamond projects the option will be triggered if Karelian completes 10 tonnes 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.

Finance

The loss after taxation for the half-year ended 30 November 2015 was €106,913 (2014: loss of €121,087) and the net assets as at 30 November 2015 were €8,249,640 (2014: €8,319,399).

Directors and Staff

I would like to thank my fellow directors, staff and consultants for their support and dedication, which has enabled the continued success of the Company.

Outlook

We have made a significant amount of progress in the period and expect this to continue as we move forward with your Company’s diamond interests in Finland.

Yours faithfully, Professor Richard ConroyChairman

29 February 2016

INCOME STATEMENT

FOR HALF-YEAR ENDED 30 NOVEMBER 2015

STATEMENT OF COMPREHENSIVE INCOME

FOR HALF-YEAR ENDED 30 NOVEMBER 2015

STATEMENT OF FINANCIAL POSITION

AS AT 30 NOVEMBER 2015

STATEMENT OF CHANGES IN EQUITY

FOR THE HALF-YEAR ENDED 30 NOVEMBER 2015

CASH FLOW STATEMENT

FOR THE HALF-YEAR ENDED 30 NOVEMBER 2015

NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 30 NOVEMBER 2015

1. Basis of preparation

The half-yearly financial statements have been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), and their interpretations adopted by the International Accounting Standards Board (IASB). The accounting policies used in the preparation of the half-yearly financial information are the same as those used in the Company’s audited financial statements for the year ended 31 May 2015.

2. Earnings per share

The calculation of the loss per ordinary share of €0.0004 (2014: loss €0.0004) is based on the loss for the financial period of €106,913 (2014: loss €121,087) and the weighted average number of ordinary shares in issue during the period of 286,535,034 (2014: 286,535,034).

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 half-year ended 30 November 2015.

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, 9 Merrion Square North, Dublin 2.