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Karelian Diamond Res. PLC (KDR)

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Wednesday 03 October, 2007

Karelian Diamond Res. PLC

Drilling Report/Update


                                                                3 OCTOBER, 2007

                        Karelian Diamond Resources Plc                         

                         ("Karelian" or "the Company")                         

    KARELIAN'S ASSESSMENT OF SEITAPERÄ PIPE BEGINS TO TAKE SHAPE FOLLOWING     
                        COMPLETION OF SUMMER PROGRAMME                         

  * Extensive Kimberlite Exposed In Trenches - 2,000kg Extracted For Analysis
   
  * Samples Sent For Micro-Diamond Testing At Lakefield Laboratories
   
  * Potential South-West Extension To Pipe Of Particular Interest
   
  * Sites Identified For Winter Drilling Programme At Seitaperä
   
Completion of the Summer work programme on its diamond projects in Finland has
seen AIM-quoted Karelian Diamond Resources (KDR) make significant progress in
assessing its Seitaperä kimberlite pipe, the largest known diamondiferous
kimberlite in the country. Samples have been sent for micro-diamond testing,
with results expected by year-end.

At Seitaperä, in the Kuhmo region, eight surface trenches have been dug by
hydraulic excavator. Two encountered weathered kimberlite breccia at a depth of
3m-5m below surface, one trench encountered massive weathered kimberlite in the
central portion of the pipe at 5m depth, and two others encountered massive
fresh kimberlite dykes at a depth of 2m-3m. These dykes are more than 3m wide
and feed the main pipe from the south-west and north-east. Over 2,000kg of
kimberlite was extracted from the last three of these trenches.

Geochemical and petrographic analysis confirm the material to be micaceous
olivine-bearing Group II kimberlite, and three individual 100kg samples have
been dispatched to SGS Lakefield Laboratories in Canada for micro-diamond
testing. The results are expected by the end of the year.

Integrating the latest trenching results with surface mapping and previous
drilling information, has enabled the Company to delineate the surface
expression of the pipe and select suitable sites for drill testing. Three
inclined holes to test the sub-surface dimensions of the central and
south-western portions of the pipe, and two large-diameter vertical holes for
micro-diamond sample extraction are planned. The former are scheduled to
commence in November and the latter, pending availability of a suitable drill
rig, in early 2008. On completion it is planned to submit further samples from
the large diameter boreholes for micro-diamond analysis.

The overall drilling results will be used further to define the shape and
extent of the Seitaperä pipe, with particular attention on an indicated
south-western extension which could potentially add significantly to the size
of the pipe which extends over 4.2ha at surface.

Elsewhere in the Kuhmo area a series of ten deep basal till samples, located at
the convergence of previously identified kimberlite indicator mineral trains
with aeromagnetic geophysical anomalies, were collected and sent for
processing, together with a further six samples from other targets within
Company claim areas. Results are expected by year-end and will be used to
define drill targets for the planned early 2008 drilling campaign.

In the Joensuu area the Company has collected 57 kimberlite indicator
mineral-in-till (KIM) samples as part of an ongoing programme of further
sampling in several target areas. Previous results of samples collected from
these areas early in 2007 include recovery of several chrome-pyrope garnets and
kimberlitic ilmenite grains.

The recently completed sampling involved detailed infill work to further
delineate already defined indicator mineral trains as well as reconnaissance
work on individual targets. The Company hopes to receive the results from this
work by end-2007.

This release has been approved by the Company's Technical Staff who include,
Kevin McNulty BSc, MSc, PGeo and Stephen Grimmer BSc, MSc, DIC, PhD in
accordance with the guidance note for Mining, Oil and Gas Companies issued by
the London Stock Exchange in respect of AIM companies, which outlines standards
of disclosure for mineral projects.

Further Information:

Professor Richard Conroy, Chairman Karelian Diamond Resources plc. Tel:
00-353-1-661-8958

Charles Dampney, City Capital Corporation Limited. Tel: 020-7842-5867

Jeffrey Coburn/Simon Fox, John East & Partners Limited Tel: 020-7628-2200

Ron Marshman/John Greenhalgh, City of London PR Limited. Tel: 020-7628-5518