Karelian Regulatory News (KDR)

KARELIAN DIAMOND RESOURCES PLC - Half-yearly Report

PR Newswire

London, February 27

Karelian Diamond Resources plc (AIM: KDR; ESM: KDR.I), the diamond explorationcompany focused on Finland, announces its results for the six months ended 30November 2012.

Highlights:

Professor Richard Conroy, Chairman, said:

"The results of your Company's exploration programme in Finland continue toencourage us to believe that diamond discoveries could be made in the Finnishsector of the Karelian Craton comparable to the world class diamond deposits inthe Russian sector of the Craton."

Further Information:

Professor Richard Conroy, Chairman/ Karelian Diamond Tel: +353-1-661-8958Resources plc

Brian Farrell/IBI Corporate Finance Limited (ESM Adviser) Tel +353-766-234-800

Visit the website at: www.kareliandiamondresources.com

I have great pleasure in presenting your Company's Interim Report for the sixmonths ended 30 November 2012, a period of continued progress for your Company.

The recovery of microdiamonds in the mantle xenolith identified during thisyear's drilling confirmed that the xenolith encountered was diamondiferous. Itis a further indication of the diamond potential of the Seitaperädiamondiferous kimberlite pipe, which at 6.9 hectares is the largest knownkimberlite pipe discovered to date in Finland.

The microdiamonds most recently identified in your Company's Seitaperä pipe arewhite in colour, transparent and octahedral. The broken nature of themicrodiamond suggests the possibility of larger stone sizes. This is ofrelevance both in the exploration of the pipe and its diamond and economicpotential.

These results, in conjunction with the discovery by your Company ofdiamondiferous indicator minerals during a sampling programme at nearbyRiihivaara, indicate that there is more than one source of diamonds in theKuhmo area and enhances the overall diamond potential of the area in which theyare located. Applications for further exploration licences in the area havetherefore been made.

Work has continued on the integration of the extensive database made availableto your the Company under its agreement with Rio Tinto arising from this,applications have been made for additional exploration licences outside theKuhmo area in this highly exciting Finnish region of the Karelian Craton.

Karelian's exploration programme in Finland is based on the existence inFinland of similar geology to that in the Russian sector of the Karelian Cratonin which two world class diamond discoveries have been made - Lomonosov and theGrib Diamond Pipe and it is your Company's aim to make a similar large scalediamond discovery in Finland.

Finance

The results for the six months ended 30 November 2012 are set out below. Theloss for the period was €72,545 (2011: loss €84,691). The net assets of theCompany at 30 November 2012 were €4,491,981 (2011: €4,609,197).

Outlook

Karelian looks forward to further progress with the diamond interest in Finlandand continues to review other opportunities that may arise.

Directors and Staff

I would like to thank my fellow directors, staff and consultants for theirsupport and dedication, which has enabled the continued success of the Company.I look forward to the future with confidence.

TOTAL COMPREHENSIVE INCOME FOR THE (72,545) (84,692) (207,980)PERIOD - ENTIRELY ATTRIBUTABLE TO

Cash generated/(used in) by operations 74,703 (56,031) (58,631)

Net cash used in investing activities (160,544) (360,965) (509,687)

(Decrease)/Increase in cash and cash (14,228) (541,991) (735,854)equivalents

Cash and cash equivalents at beginning 10,054 745,908 745,908of period

1. Basis of preparation

The half-yearly financial statements have been prepared on the basis of therecognition and measurement requirements of International Financial ReportingStandards (IFRS) as adopted by the European Union (EU), and theirinterpretations adopted by the International Accounting Standards Board (IASB).The accounting policies used in the preparation of the half-yearly financialinformation are the same as those used in the Company's audited financialstatements for the year ended 31 May 2012.

2. Earnings per share

The calculation of the loss per ordinary share of €0.0008 (2011 - €0.0009) isbased on the loss for the financial year of €72,545 (2011 - €84,692) and theweighted average number of ordinary shares in issue during the year of92,208,342 (2011 - 92,208,342).

Since the Company incurred a loss the effect of share options and warrantswould be anti-dilutive.

3. Dividends

No dividends were paid or are proposed in respect of the period ended 30November, 2012.

4. Copy of half yearly report

A copy of the half yearly report will be available on the Company's websitewww.kareliandiamondresources.com and will be available from the Company'sregistered office, 10 Upper Pembroke Street, Dublin 2.