Karelian Regulatory News (KDR)

2 May 2014 Private Placing to raise £725,000 and Debt Conversion of £430,038 * Placing of 32,222,222 new ordinary shares at 2.25 pence per share to raise £725,000 before expenses * Conversion of accrued directors fees and salaries amounting to £430,038 by directors of the Company at 2.25 pence per share * Proceeds of the placing to be applied to implement and expand ongoing programmes at its various diamond prospects in Finland ______________________________________________________________________________ Karelian Diamond Resources plc ("Karelian") (AIM: KDR, ESM: KDRI), the diamondexploration company focussed on Finland, announces that it has conditionallyraised £725,000, before expenses, through a placing ("the Placing") of32,222,222 Ordinary shares ("Placing Shares") of EUR0.01 in the capital of theCompany ("Ordinary Shares"). The Placing Shares have been placed at a price of2.25 pence per Placing Share ("the Placing Price"). The Placing Shares were placed with retail investors by Hume Capital SecuritiesPlc ("Hume"). The Placing is conditional, inter alia, on admission of thePlacing Shares to trading on AIM and the Enterprise Securities Market ("ESM")operated by the Irish Stock Exchange Limited. The New Shares will rank paripassu with the existing issued ordinary shares of EUR 0.01 in the capital ofthe Company ("Ordinary Shares"). The Company intends to use the net proceeds of the Placing primarily toimplement and expand the Company's ongoing programmes at its various diamondprospects in Finland and for working capital generally. In addition, Professor Richard Conroy, Séamus FitzPatrick, Maureen Jones andJames P. Jones, directors of Karelian (the "Directors") have today converted,in aggregate, £430,038 of accrued salaries and fees into 19,112,804 OrdinaryShares at 2.25 pence per share ("Conversion Shares") as follows. Director Amount No. of new Resultant Percentage converted Ordinary shareholding interest in the Shares enlarged issued share capital Professor Conroy £190,113 8,449,467 *76,806,168 26.81 Maureen Jones £134,663 5,985,039 6,110,875 2.13 James Jones £84,522 3,756,538 3,814,873 1.33 Séamus FitzPatrick £20,740 921,760 922,246 0.32 *Includes 30,815,030 held by Conroy Plc, a company in which Professor Conroyhas a controlling interest The Directors' participation is a related party transaction under the AIMRules. The independent directors of Karelian, having consulted with theCompany's nominated adviser and ESM adviser, consider the terms of the debtcapitalisation to be fair and reasonable insofar as the Shareholders areconcerned. Application has been made to AIM and ESM for the Placing shares to be admittedto trading. Admission and trading are expected to commence on 8 May 2014. On admission of the Placing Shares and the Conversion Shares, the Company willhave 286,535,034 Ordinary Shares in issue in total. Professor Richard Conroy, Chairman, commented: "The Company is delighted at this further demand from private investors. Thesemonies will allow us to expand and accelerate our ongoing programmes at ourdiamond prospects in Finland including the additional areas which have beenawarded to, or been applied for, by the Company utilising the extensive datarelating to Finland made available to the Company by Rio Tinto Mining andExploration in addition to the Company's own exploration data. The placing hasbeen done at a 12.5% price increase to the placings in January 2014." Further Information: Professor Richard Conroy, Chairman, Karelian Diamond Tel: +353-1-661-8958Resources plc Simon Clements/Virginia Bull, Sanlam Securities UK Tel: +44-20-7628-2200Limited (Nomad) Ger Heffernan, IBI Corporate Finance Limited (ESM Tel: +353-7662-34800Adviser) Jon Belliss, Hume Capital Securities plc (Broker) Tel: +44-20-3693-1470 Michael Padley, Lothbury Financial Services Limited Tel: +44-20-3440-7620 Don Hall, Hall Communications Tel: +353-1-660-9377

http://www.kareliandiamondresources.com