Final Results

12 November 2010                                                               

                        Karelian Diamond Resources Plc                         
                           ("KDR" or the "Company")                            

                 Final results for the year ended 31 May 2010                  

Karelian (AIM: KDR, ESM: KDRI), the diamond exploration company focused on
Finland, announces its results for the year ended 31 May 2010.

Highlights:

  * Confidentiality agreement (with Back-In-Rights) signed with Rio Tinto
   
  * Work programmes continue in Kuhmo and Joensuu regions
   
  * Additional licences acquired: Post Period
   
  * Loss for year €173,081 (2009: loss €194,126) in line with expectations
   
Professor Richard Conroy, Chairman, stated:

"The confidential information and physical samples being made available to
Karelian by Rio Tinto will be a significant addition to Karelian's existing
database and having already delineated the largest diamondiferous pipe yet
discovered in Finland we have acquired further licences in areas where we have
encouraging results.

"Our objective remains to make a major diamond discovery in Finland comparable
to the world class discoveries already made on the Russian side of the
structure."

Further Information:

Professor Richard Conroy, Chairman, Karelian Diamond    Tel: [phone]   
Resources plc                                                                  
                                                                               
Simon Clements/Virginia Bull, Merchant Securities       Tel: [phone]  
Limited (Nomad)                                                                
                                                                               
John Tuite, IBI Corporate Finance Limited (ESM Adviser) Tel: [phone]   
                                                                               
Charles Dampney, City Capital Corporation Limited       Tel: [phone]  
(Broker)                                                                       
                                                                               
Michael Padley/Michael Spriggs, Lothbury Financial      Tel: [phone]  
Services                                                                       
                                                                               
Don Hall, Hall Communications                           Tel: [phone]   

http://www.kareliandiamondresources.com


CHAIRMAN'S STATEMENT

I have pleasure in presenting your Company's final results for the year ended
31 May 2010. During the year your Company continued to progress its diamond
exploration programme in Finland and concluded a confidentiality agreement
(with Back-in-Rights) with Rio Tinto Exploration Limited ("Rio Tinto") in
relation to its exploration data in Finland.

Under the agreement, Rio Tinto will disclose to Karelian confidential
information and physical geological samples relating to its exploration in
Finland for the purpose of Karelian considering that information in relation to
Karelian's potential and existing exploration programmes in Finland.

In consideration of Rio Tinto disclosing the confidential information to it,
Karelian has agreed that Rio Tinto will have the option to earn a 51 per cent.
interest in any project identified by Karelian in Finland by Rio Tinto paying
the direct cash expenditures incurred in developing the project subject to the
following conditions:

1. For diamond projects the option will be triggered if Karelian completes 10
tons or more of bulk sampling for diamond exploration; and

2. For all other minerals the option will be triggered if Karelian discovers a
resource with an in situ value that is equal to or greater than the in situ
value of 3 million ounces of gold in a JORC compliant resource calculation.

The Rio Tinto Group is one of the largest mining companies in the world with
interests spanning aluminium, copper, diamonds, iron ore, coal, uranium, gold
and industrial minerals. Rio Tinto Diamonds is the third largest supplier of
diamonds in the world with diamond production ranging from the unique pink
diamonds of the Argyle mine in Australia to the spectacular whites of Diavik's
high value gemstones in Canada.

I am delighted with the agreement with Rio Tinto. The confidential information
and physical samples now being made available to Karelian will be a significant
addition to your Company's existing knowledge base and mineral exploration
programme, which itself has already led to the delineation by your Company of
the largest diamondiferous kimberlite pipe yet discovered in Finland.

In the Kuhmo area of Finland there has been only limited historical diamond
exploration, but when this is considered in conjunction with the results
achieved by Karelian, the area's potential for diamondiferous kimberlites is
clearly shown. As a result of these encouraging indications, your Company
applied for and has now been granted licences covering the two other known
Kimberlite occurrences in the area - Kimberlites 18 (Havukkasuo) and 24
(Lentiira).

The Company also continues to explore in the Joensuu area of Eastern Finland,
where results to date suggest the possibility that this area could also contain
a number of kimberlite pipes.

Financials

The loss after taxation for the year ended 31 May 2010 was €173,081 (2009: loss
€194,126) and the net assets as at 31 May 2010 were €3,621,349 (2009: €
3,712,312).

As in previous years, I have supported the working capital requirements of the
Company and in the period under review have advanced loans to the value of €
175,248 and the balance of the loans due to me at the period end was €895,241.
The loans have been made on normal commercial terms.

The other Directors consider, having consulted with the Company's Nominated
Adviser and the Company's ESM Adviser, that the terms of these loans are fair
and reasonable in so far as the Company's shareholders are concerned.

Auditors

I would like to take the opportunity of thanking the partners and staff of
Deloitte and Touche for their services to your Company during the course of the
year.

Directors, Consultants and Staff

I would also like to express my deep appreciation of the support and dedication
of the Directors, Consultants and Staff, which has made possible the continued
progress which your Company has achieved.

Future Outlook

Your Company's objective remains to make a major diamond discovery in Finland
comparable to the world class discoveries already made on the Russian side of
the structure. We look forward to a successful future.

Professor Richard Conroy
Chairman

12 November 2010


INCOME STATEMENT
FOR THE YEAR ENDED 31 MAY 2010

                                                             2010          2009
                                                                €             €
                                                                               
Operating expenses                                      (173,086)     (194,342)
Other Income                                                    5           216
                                                                               
Loss before tax                                         (173,081)     (194,126)
Taxation                                                        -             -
                                                                               
Loss retained for the year                              (173,081)     (194,126)
                                                                               
Loss per ordinary share                                 (€0.0028)     (€0.0032)


BALANCE SHEET
AS AT 31 MAY 2010

                                                             2010          2009
                                                                €             €
                                                                               
Assets                                                                         
Non-current Assets                                                             
Intangible assets                                       5,250,016     4,883,865
Financial assets                                                4             4
Property, plant and equipment                                 837         1,089
                                                                               
                                                        5,250,857     4,884,958
                                                                               
Current Assets                                                                 
Trade and other receivables                                24,875        10,222
Cash and cash equivalents                                  17,707         7,666
                                                                               
                                                           42,582        17,888
                                                                               
Total assets                                            5,293,439     4,902,846
                                                                               
Equity and Liabilities                                                         
Capital and reserves                                                           
Called up share capital                                   605,416       605,416
Share premium                                           3,801,202     3,801,202
Share based payments reserve                              210,803       128,685
Retained earnings                                       (996,072)     (822,991)
                                                                               
Total equity                                            3,621,349     3,712,312
                                                                               
Non-current liabilities                                                        
Trade and other payables: Amounts falling due             895,241       719,993
after more than one year                                                       
                                                                               
Total non-current liabilities                             895,241       719,993
                                                                               
Current liabilities                                                            
Trade and other payables: Amounts falling due             776,849       470,541
within one year                                                                
                                                                               
Total Current Liabilities                                 776,849       470,541
                                                                               
Total Liabilities                                       1,672,090     1,190,534
                                                                               
Total Equity and Liabilities                            5,293,439     4,902,846


CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MAY 2010

                                                             2010          2009
                                                                €             €
                                                                               
Cash generated by operations                              134,006       118,876
Tax paid                                                        -             -
                                                                               
Net cash generated by operating activities                134,006       118,876
                                                                               
Cash flows from investing activities                                           
Investment in exploration and evaluation                (299,213)     (628,611)
                                                                               
Net cash used in investing activities                   (299,213)     (628,611)
                                                                               
Cash flows from financing activities                                           
Shareholder loans                                         175,248       481,971
                                                                               
Net cash generated from financing activities              175,248       481,971
                                                                               
Increase/(decrease) in cash and cash equivalents           10,041      (27,764)
Cash and cash equivalents at beginning of year              7,666        35,430
                                                                               
Cash and cash equivalents at end of year                   17,707         7,666


Notes to the Financial Statements

1. Publication of non-statutory accounts

The financial information set out in this preliminary announcement is
abbreviated from the accounts as defined in Section 19 of the Companies
(Amendment) Act 1986.

The financial information for the year ended 31 May 2010 have been extracted
from the Company's financial statements to that date which have received an
unqualified auditors' report but have not yet been delivered to the Registrar
of Companies.

2. Earnings per share

The calculation of the loss per ordinary share of €0.0028 (2009 - €0.0032) is
based on the loss for the financial year of €173,081 (2009 - €194,126) and the
weighted average number of ordinary shares in issue on a basic and fully
diluted basis during the year of 60,541,676 (2009 - 60,541,676).

The effect of share options and warrants is anti-dilutive.

3. Dividends

No dividends were paid or are proposed in respect of the year ended 31 May
2010.

4. Copies of Accounts

A copy of the Annual Report and Financial Statements will be available on the
Company's website www.kareliandiamondresources.com and will be available from
the Company's registered office, 10 Upper Pembroke Street, Dublin 2. It will
also be forwarded to shareholders who requested a hard copy.