Karelian Regulatory News (KDR)

11 December 2013 Placing to raise £700,000 and debt capitalisation * Placing of 46,666,666 new ordinary shares at 1.5 pence per share to raise £ 700,000 before expenses * Debt capitalisation of £469,875 at 1.5 pence per share * Proceeds of the placing to be applied to accelerate 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 £700,000, before expenses, through a placing ("the Placing") of46,666,666 ordinary shares ("Placing Shares") of EUR0.01 in the capital of theCompany ("Ordinary Shares"). The Placing Shares have been placed at a price of1.5 pence per Placing Share ("the Placing Price"). In addition, ProfessorRichard Conroy, Chairman of the Company, has capitalised loans amounting to £469,875 by subscribing for 3 1,325,000 Ordinary Shares of EUR0.01 in the capitalof the Company at the Placing Price (together with the Placing Shares set outabove ("New Shares")). Following the admission of the New Shares, Professor Richard Conroy will hold 68,356,701 Ordinary Shares in the Company, representing approximately 40. 16 percent. of the Company's enlarged share capital and total voting rights. The Placing Shares were placed with institutional and retail investors by XCAPSecurities Plc ("XCAP"). The Placing and Subscription are conditional, interalia, on admission of the Placing and Subscription Shares to trading on AIM andthe Enterprise Securities Market operated by the Irish Stock Exchange Limited("ESM"). The New Shares will rank pari passu with the existing issued ordinaryshares of EUR 0.01 in the capital of the Company ("Ordinary Shares"). The Company intends to use the net proceeds of the Placing primarily acceleratethe Company's ongoing programmes at its various diamond prospects in Finlandand for working capital generally. Professor Richard Conroy's participation in the debt capitalisation is arelated party transaction under the AIM Rules. The independent directors,having consulted with the Company's nominated adviser and ESM adviser, considerthe terms of the debt capitalisation to be fair and reasonable insofar as theShareholders are concerned. Application has been made to AIM and ESM for the Placing shares to be admittedto trading. Admission and trading are expected to commence on 17 December 2013. On admission of the 7 7,991,666 New Shares, the Company will have 17 0,200,008Ordinary Shares in issue in total. Professor Richard Conroy, Chairman, commented: "The support from institutional investors is much appreciated. These monieswill allow us to accelerate ongoing programmes at our diamond prospects inFinland. At one of our targets, Seitaperä, the diamondiferous kimberlite pipediscovered is, at 6.9 hectares, the largest known diamondiferous kimberlitepipe in Finland. "The Placing will also allow for further work on other targets arising from theintegration of the Company's data with the extensive database made available inaccordance with the agreement between Karelian and Rio Tinto Mining andExploration." Further Information: Professor Richard Conroy, Chairman, Karelian Tel: +353-1-661-8958Diamond Resources 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/ David Lawman, XCAP Securities PLC Tel: +44-20-7101-7070(Broker) Michael Padley/Michael Spriggs, Lothbury Financial Tel: +44-20-3440-7620Services Limited Don Hall, Hall Communications Tel: +353-1-660-9377

http://www.kareliandiamondresources.com