27 November 2024

Karelian Diamond Resources plc

(“Karelian” or “the Company”)

FINAL RESULTS FOR THE YEAR TO 31 MAY 2024

NOTICE OF ANNUAL GENERAL MEETING

Karelian Diamond Resources plc (AIM: KDR), the diamond exploration company focused on Finland, announces its Audited Accounts for the year ended 31 May 2024.  Details of these can be found below and a full copy of the Annual Results can be viewed on the Company’s website. During the period progress was made in developing the Company’s prospects in both Finland and Ireland.

Highlights of the period included:

The long awaited decision regarding mine boundaries for the Lahtojoki diamond deposit were finalised, post year end, at a hearing of the Finnish Land Court resulting in no change to the existing boundaries. This decision was an essential step as the Company proceeds with its plans for the proposed development of the Lahtojoki diamond deposit. Additionally, regarding the appeals by two landowners the majority of the items were rejected by the Land Court. Three items were referred back to the Land Survey to review. Analysis of basal till samples excavated at various target locations in the Kuhmo region of Finland, suggests that the Company’s search for the source of the green diamond the Company discovered has narrowed, with garnets, identified in two sample locations. This suggests close proximity to a kimberlite source. The Company’s exploration programme for Nickel, Copper and Platinum - Group Elements in Northern Ireland adds a significant, exciting and possibly very important wing to the Company’s diamond exploration and development programme in Finland.  The Company now holds three prospecting licences, totalling an area of approximately 750Km², in Northern Ireland. Samples from a stream sediment sampling programme over the prospecting licences dispatched for analysis and an independent assessment carried out.

Brendan McMorrow, Chairman of Karelian, said:

“I have pleasure in presenting the Company's Annual Report and Financial Statements for the year ended 31 May 2024.  However, it is also tinged with great sadness as I do so following the passing of our founder and Executive Chairman, Professor Richard Conroy. It now falls to myself and the team to continue Richard’s work and I look forward with confidence to continued success for the Company both in Finland, where we are looking to open a diamond mine, and in Northern Ireland where we have potential Nickel, Copper and Platinum - Group Elements deposits.”

Annual Report and Accounts for the year to 31 May 2024

The full audited annual report and accounts for the year to 31 May 2024 has been posted to shareholders and will be published on the Company's website (www.kareliandiamondresources.com) shortly. Key elements can also be viewed at the bottom of this announcement.

Annual General Meeting

The Annual General Meeting of the Company ("AGM") will be held at The Conrad Dublin Hotel, Earlsfort Terrace, Dublin at 12.30pm on 18 December 2024. A copy of the notice of AGM can be viewed on the Company's website.

Further Information:

Karelian Diamond Resources plcBrendan McMorrow, ChairmanMaureen Jones, Managing Director +353-1-479-6180 Allenby Capital Limited (Nomad)Nick Athanas / Nick Harriss +44-20-3328-5656 Peterhouse Capital Limited (Joint Broker)Lucy Williams / Duncan Vasey +44-20-7469-0930 CMC Markets (Joint Broker)Douglas Crippen + 44-20-3003-8632 Lothbury Financial ServicesMichael Padley +44-20-3290-0707 Hall Communications Don Hall +353-1-660-9377 http://www.kareliandiamondresources.com

Chairman’s statement

Dear Shareholder,

I have pleasure in presenting the Company's Annual Report and Financial Statements for the year ended 31 May 2024.  However it is also tinged with great sadness as I do so following the passing of our founder and Executive Chairman, Professor Richard Conroy after a brief illness.

Richard’s accomplishments across the diverse range of medicine, politics and indeed mineral exploration garnered respect from all.  His entrepreneurial and inquiring spirit was excited by the opportunities in mine exploration and development, and his skills, honed in zinc and gold projects in Ireland, spread to Finland where his vision of the Karelian Craton having the potential for a significant European diamond mine is being steadily realised by the Company.  Equally, the Company’s recent progress on its Copper, Nickel and Platinum-Group Elements project in Northern Ireland held true to his belief in the potential of Ireland to provide a European solution to the shortfall in critical minerals necessary for a modern economy.  In Karelian Diamond Resources, we intend to continue to build on his substantial legacy and deliver on Richard’s vision for the company.

The Lahtojoki Diamond Deposit

The mine boundaries for the Lahtojoki diamond deposit were finalised, post year end, at a hearing of the Finnish Land Court resulting in no change to the existing boundaries. This decision in relation to the boundaries was an essential and long awaited step as the Company proceeds with its plans for the proposed development of the Lahtojoki diamond deposit.

Additionally, regarding the appeals by two landowners regarding the amount of compensation payable to them, the majority of the items upon which they had based their claims were rejected by the Land Court, except for three items which were referred back to the Land Survey to review. The appellants were also required to contribute to the Company’s legal costs.

We will provide further updates on this matter as and when we are in a position to do so.

Diamond Exploration Programme in Finland

The Company is, however, not only involved in the development of the Lahtojoki diamond deposit in Finland, which it owns, but is also active in an increasingly exciting diamond exploration programme in Finland.

Diamond kimberlites are generally found in Cratons. These are areas of ancient crustal stability such as those found in Southern Africa and in Canada.  The Karelian Craton which extends across Finland, is one of the largest Cratons in the world and has been proven to contain world class diamond deposits. In general terms the larger the Craton, the larger the kimberlites.

The presence of the Lahtojoki diamond deposit confirms that the Finnish section of the Karelian Craton is diamondiferous, and the sheer size of the Karelian Craton in Finland suggests the potential for the occurrence of a world class diamond deposit. 

The Company has carried out an extensive and systematic exploration programme for diamonds in Finland using, inter alia, geology, geophysics, kimberlitic indicator trains, airborne and UAV (unmanned aerial vehicle) drone surveys together with excavation and drilling and the analysis of basal till samples. The programme led to the previous discovery of a green diamond in the Kuhmo region of Finland – the best possible kimberlitic indicator.

Analysis of basal till samples excavated at various target locations in the Kuhmo region of Finland, suggests that the Company’s search for the source of the green diamond has narrowed, with garnets identified in two sample locations which suggest close proximity to a kimberlite source.

Exploration for Nickel, Copper and Platinum Group Metals in Northern Ireland

It is not entirely unusual for a company engaged in diamond exploration to be successful in Nickel, Copper and Platinum- Group Elements exploration.  One of the most successful discoveries in this context was the Voisey’s Bay nickel –copper – cobalt deposit in Labrador, Canada, one of the largest nickel discoveries in the world.

The Company’s exploration programme for Nickel, Copper and Platinum-Group Elements in Northern Ireland adds a significant, exciting and possibly very important wing to the Company’s diamond exploration and development programme in Finland. 

The Company now holds three prospecting licences, totalling an area of approximately 750Km2, in Northern Ireland. Samples from a stream sediment sampling programme over the prospecting licences were previously dispatched to Overburden Drilling Management Limited (“ODM”) in Canada for mineral concentration, picking and analysis for indicator mineralogy using ODM’S trade-marked metamorphic/ magmatic massive sulphide indicator minerals (MMSIMS) technique.  ODM has been a key contributor to numerous discoveries world-wide, including the Voisey’s Bay discovery in Canada. The results of this programme, taken in conjunction with results from a previous programme indicate a highly anomalous river catchment area. Five samples each yielded over 1,000 indicator minerals for Nickel, Copper and Platinum mineralisation.

An independent assessment by Dr Larry Hulbert, an internationally recognised expert in Nickel, Copper and Platinum – Group Elements, confirmed the potential for Nickel, Copper and Platinum-Group Elements in the Company’s licence areas in Northern Ireland. Dr Hulbert’s review also noted marked resemblances to the Baraga Basin in Michigan that hosts the world class Eagle and Eagle East Nickel - Copper and Platinum–Group Elements deposits and recommended that the Eagle deposit should serve as Karelian’s exploration model.

Environmental, Social and Governance Issues

Environmental, social and governance (ESG) issues are becoming increasingly critical in the Mining industry. Great emphasis is placed by the Company on these issues and the Company is committed to high standards of corporate governance and integrity in all its activities and operations, including rigorous health and safety compliance, environmental consciousness and the promotion of a culture of good ethical values and behaviour.

Financials

The loss after taxation from continuing operations for the financial year ended 31 May 2024 was €237,160 (31 May 2023: loss of €291,467) and the net assets of the Company at 31 May 2024 were €9,741,609 (31 May 2023: €9,786,074). During the year there was a fundraising of £250,000 at 2.5 pence per ordinary share. Post year end a further fundraising of £328,747 at 1.5 pence per ordinary share was concluded.

Directors and Staff

I would like to express my very deep appreciation of the support and dedication of Directors, staff, and consultants which has made possible the continued progress and success which the Company has achieved.

Future Outlook

I look forward with confidence to continued success for the Company both in diamond exploration and development in Finland and in Nickel, Copper and Platinum-Group Elements exploration in Northern Ireland.

Brendan McMorrow

Chairman

26 November 2024

Professor Richard Conroy – an Appreciation

Professor Richard Conroy (1933 – 2024) – Former Chief Executive and Chairman of the Board of Directors

Professor Richard T. W. L. Conroy, who died on the 14th October 2024, was a proud Irishman whose life in all its forms was an inspiration to all, especially those close to him and those who will remember him for his devotion to family, his great faith and enduring courtesy, and for his work in public office, medicine, education and natural resources exploration and development.

His was a long and productive life exemplified by his many undertakings and achievements. He leaves a rich legacy not least amongst those who loved and admired him as family, neighbours, colleagues, and all who enjoyed his friendship, and amongst those dedicated colleagues and associates inspired by his incredible intellect, energy and passion. 

Born in Birmingham in 1933, Richard returned to Ireland at age 5, prior to the demise of his father, himself a Professor of Spanish.

A gentleman, entrepreneur, businessman, diplomat and politician, Richard was deeply devoted to his family, and generous in contributing his deep knowledge, experience, and expertise to a wide range of disciplines across the many and varied fields in which he was successful.  Qualified as a medical doctor, his pioneering work on the study of Circadian Rhythms gained him his PhD. In 1969 he was appointed Professor of Physiology at the Royal College of Surgeons in Ireland -   one of the youngest ever professional appointments in the British Isles, and a post he held until his retirement in 1998. 

A Founder Fellow of the Faculty of Occupational Medicine and an eundem Fellow of the Royal College of Physicians of Ireland, Richard brought his business acumen to the fore as Chairman of Tallaght Hospital Board, successfully overseeing its construction and commissioning, under budget and on time.

A proud Irishman and member of Fianna Fail, he was elected a member of Seanad Eireann on two separate occasions (1977-1981 & 1989-1993) holding posts as Government spokesman in the Upper House on Industry and Commerce, Foreign Affairs, and Northern Ireland.   In local government, he served as a member of Dublin County Council for Ballybrack (1991-1994) and Dún Laoghaire-Rathdown County Council (1994-1999) holding the position of ‘Cathaoirleach’ (Chairman).  Until his death, Richard also represented Ireland as member of the Executive Council and Chairman of the Irish group on the Trilateral Commission - a body founded in 1973 to foster closer cooperation between Western Europe, Japan, and North America.

A champion of the Irish natural resource sector, Richard’s fascination with the world of geology, the process of exploration, the joy of discovery, and his unswerving drive to prove that Ireland is indeed a nation ‘rich in natural resources’ together combined to find expression in a way that younger generations now working in the sector may well reflect upon with admiration.    His activities in the natural resource sector began with the establishment of Trans-International Oil Exploration Ltd in 1975 – a venture that later merged with Aran Energy and was subsequently acquired by Statoil in 1979.

Enough to light the flame that was to inspire him throughout his commercial life, Richard founded Conroy Petroleum and Natural Resources in 1980 which, only six years later, went on to discover the Galmoy, Co. Kilkenny zinc and lead deposit.

Critical for the revival of the minerals industry in Ireland - it being the first commercial discovery since the Navan mine in 1970 - Richard brought Galmoy from a greenfield discovery through feasibility studies, the environmental impact phase, and the permitting process. This vital work led to the emergence of Galmoy as an operating mine, generating over 200 jobs within the local area, 300 additional jobs in the wider economy, and a contribution to the State of €65m in royalties, taxes, and rates. (Significant in this context was the discovery along trend in 1990 of the adjacent Lisheen deposit)

Before moving into gold exploration with the setting up of Conroy Diamonds and Gold, Richard’s appetite for exploration had been whetted by the success of Stoneboy consortium whose discovery of the Pogo gold deposit in Alaska transformed into a world-class gold mine that is still in production.

With Conroy Diamonds and Gold formed, Richard turned his focus towards Clontibret in Co. Monaghan, inspired by his memory as a young man of a gold discovery made there in 1956, down what was an old Antimony mine.

Virtually in parallel, his knowledge of Finland, the story of a diamond found in till in Eastern Finland, and his awareness that significant diamond deposits existed across the border in Russia, together led Richard and Conroy Diamonds and Gold to conduct a diamond exploration programme in that country.

One of the first foreign companies granted an exploration licence after Finland had opened its doors to foreign investment, in order to facilitate this and other plans he had in mind, Karelian Diamond Resources was formed while Conroy Diamonds and Gold evolved into the more appropriately named Conroy Gold and Natural Resources.   Pursuing his belief - triggered by his memory of gold found there in an old Antimony mine – Richard steered Conroy Gold and Natural Resources towards Clontibret where - through an extensive exploration programme - a 517,00- ounce Au JORC Resource, open in all directions, has been defined there in the heart of what later proved to be the highly-prospective Longford-Down Massif.

Fervent in his belief that Ireland was an emerging gold province with significant potential for economic scale ore bodies, Richard’s inquisitive mind led him to explore the wider potential of the region, a pursuit in which two district scale gold trends were discovered: the Orlock and Skullmartin discoveries with a combined surface gold anomalism of 90kms.   This systematic approach to exploration recently led to the discovery of visible 123.0 g/t Au (native) gold in outcrop.  In Finland, his leadership at Karelian Diamond Resources has moved the dial forward from a belief that diamonds may exist there to the discovery of a new emerging kimberlite province in that country’s Kuhmo region.

There, the Company has discovered the Riihivaara kimberlite and established the Seitaperä kimberlite pipe as the largest (6.9Ha) kimberlite in Finland. In addition, the Company has discovered a green diamond in till and identified a series of significant regional kimberlitic indicator mineral anomalies.

Of special interest is the Lahtojoki diamond deposit acquired by the Company – now at an advanced stage of being granted a mining permit to proceed with development. A key feature of the Lahtojoki diamond deposit highlighted by Richard is the significant percentage of coloured (pink) diamonds believed to be present there which, upon recovery, would create at Lahtojoki the first diamond mine in the EU.   Richard’s vision always was the discovery of world class deposits that could be proven economic through development into mines: a vision he demonstrated at Galmoy and Pogo, and currently in the development of Clontibret and at Lahtojoki.

Ever focused as he was, he had an amazing eye for detail, a naturally inquisitive mind, and an ability to look at things just slightly differently, manifest in the number of successes he has seen, and in his contention that a ‘little bit of luck’ is very often the vital element that every successful explorer needs.   Intrigued by that thought, and by the story of the discovery in 1816 of a diamond in Co. Fermanagh known as ‘The Brookeborough Diamond’, another major chapter in the life of Professor Richard Conroy has opened which, at his death, was coming to fruition.   Code named the Fermanagh Ni-Cu-PGE project, it represents yet another example of the genius that Richard brought to his various undertakings. With the knowledge in the mid-1990s of the discovery in Fermanagh - revealing potential kimberlite indicator minerals – Richard felt that further investigation was warranted, particularly in conjunction with the TELLUS airborne geophysical data.

As the world class Nickel discovery at Voisey’s Bay in Canada would suggest, diamond exploration can sometimes lead to the discovery of Nickel-Copper-PGE.    Following positive results from a stream sampling programme on Karelian’s licences, the exploration programme carried out by the Company in Fermanagh led to an exciting new development: revealed in a detailed technical review was the potential for the discovery in Northern Ireland of a major Nickel, Copper, and Platinum Group elements deposit.

A steadfast and consistent voice in the support and promotion of the Irish exploration and mining industry, and the attractiveness of Ireland as a destination for inward investment, Richard was a popular and familiar delegate and exhibitor at leading industry-related events.  A steadfast supporter of the Irish Association for Economic Geology, he attended all major events, always willing to provide sponsorship for activities - one being the Prospectors Developers Association Convention in Toronto. 

From Medicine to Mining, Richard has left a rich and enduring legacy. Those close to him will be sustained by the memory of an exceedingly kind and courteous gentleman and a man of great faith;  a loving family man devoted to his late wife Pamela, and to his daughters Deirdre and Sorca, his grandchildren, sons-in-law and their loved ones all. May he Rest in Peace.

Ní bheidh a leithéid arís ann, ar dheis Dé go raibh a anam dilis.

Extract from the Independent Auditor's Report

The following section is extracted from the Independent Auditor's Report but shareholders should read in full the Independent Auditor's Report contained in the Annual Report.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

We draw attention to Note 1 in the financial statements, which indicates that the Company recorded a loss of €237,160 for the financial year ended 31 May 2024 and had net current liabilities of €1,948,585 as at that date.

As stated in Note 1 in the financial statements, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Our evaluation of the directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included

obtaining an understanding of the Company’s relevant controls over the preparation of cash flow forecasts and approval of the projections and assumptions used in cash flow forecasts to support the going concern assumption; assessing the design and determining the implementation of these relevant controls; evaluating directors’ plans and their feasibility by agreeing the inputs used in the cash flow forecast to expenditure commitments and other supporting documentation; challenging the reasonableness of the assumptions applied by the directors in their going concern assessment; obtaining confirmations received by the Company from the directors and former directors evidencing that they will not seek repayment of amounts owed to them by the Company within 12 months of the date of approval of the financial statements, unless the Company has sufficient funds to repay; assessing the mechanical accuracy of the cash flow forecast model; and assessing the adequacy of the disclosures made in the financial statements

Statement of profit or loss

for the financial year ended 31 May 2024

2024 2023 € € Continuing operations Operating expenses (418,312) (297,386) Movement in fair value of warrants 187,628 9,565 Operating loss (230,684) (287,821) Interest expense (6,476) (3,646) Total finance costs           (6,476) (3,646) Loss before taxatio