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Karelian Diamond Res. PLC (KDR)

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Thursday 22 July, 2010

Karelian Diamond Res. PLC

Karelian signs agreement with Rio Tinto Mining

                                                                   22 July 2010

                        KARELIAN DIAMOND RESOURCES PLC                         

                               EXPLORATION DATA                                

  * Agreement signed with Rio Tinto
  * Confidential information and geological samples will also be made available
    by Rio Tinto
  * 51 per cent. back in agreement with Rio Tinto for any major diamond or
    other mineral discovery
Karelian Diamond Resources plc ("Karelian") (AIM:KDR, ESM: KDR), is pleased to
announce that it has concluded a Confidentiality Agreement (with Back in
Rights) with Rio Tinto Mining and Exploration Limited ("Rio Tinto"). Under the
agreement, Rio Tinto will disclose to Karelian confidential information and
physical geological samples relating to 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.

Karelian Chairman Professor Richard Conroy said:

"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 Karelian's existing knowledge base and mineral exploration
programme, which itself has already led to the delineation by Karelian of the
largest diamondiferous kimberlite pipe yet discovered in Finland. The 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."

Further Information:

Professor Richard Conroy, Chairman, Karelian               Tel: +353-1-661-8958
Diamond Resources plc                                                          
Simon Clements/Virginia Bull, Merchant Securities         Tel: +44-20-7628-2200
Limited (Nomad)                                                                
John Tuite, IBI Corporate Finance Limited (ESM              Tel +353-1-637-7800
Charles Dampney, City Capital Corporation Limited         Tel: +44-20-3178-3399
Michael Padley/Michael Spriggs, Lothbury Financial        Tel: +44-20-7868-2010
Services Limited                                                               
Don Hall, Hall Communications                              Tel: +353-1-660-9377


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