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Karelian Diamond Res. PLC (KDR)

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Friday 02 May, 2014

Karelian Diamond Res. PLC

Issue of Equity


                                                                               
                                                                     2 May 2014

       Private Placing to raise £725,000 and Debt Conversion of £430,038       

  * Placing of 32,222,222 new ordinary shares at 2.25 pence per share to raise
    £725,000 before expenses
   
  * Conversion of accrued directors fees and salaries amounting to £430,038 by
    directors of the Company at 2.25 pence per share
   
  * Proceeds of the placing to be applied to implement and expand ongoing
    programmes at its various diamond prospects in Finland
   
______________________________________________________________________________

Karelian Diamond Resources plc ("Karelian") (AIM: KDR, ESM: KDRI), the diamond
exploration company focussed on Finland, announces that it has conditionally
raised £725,000, before expenses, through a placing ("the Placing") of
32,222,222 Ordinary shares ("Placing Shares") of EUR0.01 in the capital of the
Company ("Ordinary Shares"). The Placing Shares have been placed at a price of
2.25 pence per Placing Share ("the Placing Price").

The Placing Shares were placed with retail investors by Hume Capital Securities
Plc ("Hume"). The Placing is conditional, inter alia, on admission of the
Placing Shares to trading on AIM and the Enterprise Securities Market ("ESM")
operated by the Irish Stock Exchange Limited. The New Shares will rank pari
passu with the existing 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 to
implement and expand the Company's ongoing programmes at its various diamond
prospects in Finland and for working capital generally.

In addition, Professor Richard Conroy, Séamus FitzPatrick, Maureen Jones and
James P. Jones, directors of Karelian (the "Directors") have today converted,
in aggregate, £430,038 of accrued salaries and fees into 19,112,804 Ordinary
Shares at 2.25 pence per share ("Conversion Shares") as follows.

Director                Amount  No. of new     Resultant         Percentage
                     converted    Ordinary  shareholding    interest in the
                                    Shares                  enlarged issued
                                                              share capital
                                                                           
Professor Conroy      £190,113   8,449,467   *76,806,168              26.81
                                                                           
Maureen Jones         £134,663   5,985,039     6,110,875               2.13
                                                                           
James Jones            £84,522   3,756,538     3,814,873               1.33
                                                                           
Séamus FitzPatrick     £20,740     921,760       922,246               0.32

*Includes 30,815,030 held by Conroy Plc, a company in which Professor Conroy
has a controlling interest

The Directors' participation is a related party transaction under the AIM
Rules. The independent directors of Karelian, having consulted with the
Company's nominated adviser and ESM adviser, consider the terms of the debt
capitalisation to be fair and reasonable insofar as the Shareholders are
concerned.

Application has been made to AIM and ESM for the Placing shares to be admitted
to trading. Admission and trading are expected to commence on 8 May 2014.

On admission of the Placing Shares and the Conversion Shares, the Company will
have 286,535,034 Ordinary Shares in issue in total.

Professor Richard Conroy, Chairman, commented:

"The Company is delighted at this further demand from private investors. These
monies will allow us to expand and accelerate our ongoing programmes at our
diamond prospects in Finland including the additional areas which have been
awarded to, or been applied for, by the Company utilising the extensive data
relating to Finland made available to the Company by Rio Tinto Mining and
Exploration in addition to the Company's own exploration data. The placing has
been done at a 12.5% price increase to the placings in January 2014."

Further Information:

Professor Richard Conroy, Chairman, Karelian Diamond   Tel: +353-1-661-8958    
Resources plc                                                                  
                                                                               
Simon Clements/Virginia Bull, Sanlam Securities UK     Tel: +44-20-7628-2200   
Limited (Nomad)                                                                
                                                                               
Ger Heffernan, IBI Corporate Finance Limited (ESM      Tel: +353-7662-34800    
Adviser)                                                                       
                                                                               
Jon Belliss, Hume Capital Securities plc (Broker)      Tel: +44-20-3693-1470   
                                                                               
Michael Padley, Lothbury Financial Services Limited    Tel: +44-20-3440-7620   
                                                                               
Don Hall, Hall Communications                          Tel: +353-1-660-9377    

http://www.kareliandiamondresources.com

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