Issue of Equity

14 January 2014 Placing to Raise £550,000 * Placing of 27,500,000 new ordinary shares at 2 pence per share to raise £55 0,000 before expenses due to demand from existing shareholders * Proceeds of the placing to be applied to implement ongoing programmes at its various diamond prospects in Finland * Placing due to further demand from institutional and retail shareholders ______________________________________________________________________________ Karelian Diamond Resources plc ("Karelian") (AIM: KDR, ESM: KDRI), the diamondexploration company focused on Finland, announces that it has conditionallyraised £550,000, before expenses, through a placing ("the Placing") of27,500,000 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"). 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 Placing Shares will rank pari passu with theexisting issued ordinary shares of EUR 0.01 in the capital of the Company("Ordinary Shares"). The Company intends to use the net proceeds of the Placing primarily toimplement the Company's ongoing programmes at its various diamond prospects inFinland 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 17 January 2014. On admission of the 27,500,000 Placing Shares, the Company will have235,200,008 Ordinary Shares in issue in total. Professor Richard Conroy holds68,356,701 Ordinary Shares in the Company, representing approximately 29.1% percent. of the Company's enlarged share capital and total voting rights followingthe Placing. Professor Richard Conroy, Chairman, commented: "Due to demand from existing investors following the placing on 7 January 2014we are delighted to accept further investment from supportive shareholders whohave continued to buy shares in the Company. As a result, Karelian is delighted to be in its strongest financial position inthe company's history: with this latest placing the company has raised £2million cumulatively over the last two months. The management team can now focus on developing the diamond prospects inFinland , and looks forward to updating its investors as to its progress." 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