Issue of Equity

7 January 2014 Placing to raise £750,000 * Placing of 37,500,000 new ordinary shares at 2 pence per share to raise £75 0,000 before expenses on the back of demand from private retail clients * Proceeds of the placing to be applied to accelerate ongoing programmes at the Company's various diamond prospects in Finland ______________________________________________________________________________ Karelian Diamond Resources plc ("Karelian") (AIM: KDR, ESM: KDRI), the diamondexploration company focused on Finland, announces that it has conditionallyraised £750,000, before expenses, through a placing ("the Placing") of37,500,000 ordinary shares ("Placing Shares") of EUR0.01 in the capital of theCompany ("Ordinary Shares"). The Placing Shares have been placed at a price of2 pence per Placing Share ("the Placing Price"), a 33.3% increase on theprevious placing announced on 11 December 2013. The Placing is conditional, inter alia, on admission of the Placing Shares totrading on AIM and the Enterprise Securities Market operated by the Irish StockExchange Limited ("ESM"). The New Shares will rank pari passu with the existingissued ordinary shares of EUR 0.01 in the capital of the Company ("OrdinaryShares"). The Company intends to use the net proceeds of the Placing primarily toaccelerate further the Company's ongoing programmes at its various diamondprospects in Finland and for working capital generally. Application has been made to AIM and ESM for the Placing Shares to be admittedto trading. Admission and trading are expected to commence on 10 January 2014. On admission of the 37,500,000 Placing Shares, the Company will have207,700,008 Ordinary Shares in issue in total. Professor Richard Conroy holds68,356,701 Ordinary Shares in the Company, representing approximately 32.91 percent. of the Company's enlarged share capital and total voting rights followingthe Placing. Professor Richard Conroy, Chairman, commented: "The Company is delighted that due to exceptional further demand from privateretail clients XCAP were able to raise another substantial amount to fund theCompany's diamond prospects in Finland. With the Company's strong share pricein the market recently, we are very pleased to have continued support frominvestors. The placing has been done at a 33.3% price increase to the placingin December, 2013." 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/Abigail Wayne, 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