Half-yearly Report
24/02/2014 07:00
24 February 2014
Karelian Diamond Resources plc
("Karelian" or "the Company")
Half-yearly results for the six months ended 30 November 2013
SIGNIFICANT PROGRESS MADE
Karelian Diamond Resources plc (AIM: KDR; ESM: KDR.I), the diamond exploration
company focused on Finland, announces its results for the six months ended 30
November 2013; a period in which the Company made excellent progress in the
field and has also successfully raised funds, post the period end, to further
advance the work.
Highlights:
* Diamondiferous Kimberlite indicator minerals found at Riihivaara target
* Exploration Claims lodged at Riihivaara
* Recent drilling at Seitaper subsequently confirmed as diamondiferous
* Following review of Rio Tinto database further licences applied for in
other regions
Post Period
* Diamondiferous Kimberlite indicator minerals found in Kuusamo area
* Applications granted for exploration claim reservations in area
* 2 million raised
* 469,875 of debt capitalised
Professor Richard Conroy, Chairman, commented:
"We have successfully expanded our licence areas and the results from the
ongoing programmes continue to be very encouraging, with important new
discoveries made. The additional funding will allow us to accelerate the
exploration as we endeavour to maximise the potential of the area".
Further Information:
Professor Richard Conroy, Chairman
Karelian Diamond Resources plc Tel: +353-1-661-8958
Simon Clements/Virginia Bull
Sanlam Securities UK Limited (Nomad) Tel: +44-20-7628-2200
Jon Belliss/Abigail Wayne
Hume Capital Securities PLC (Broker) Tel: +44-20-3693-1470
Ger Heffernan
IBI Corporate Finance Limited (ESM Adviser) Tel: +353-766-234-800
Michael Padley/Michael Spriggs
Lothbury Financial Services Tel: +44-20-7868-2567
Don Hall
Hall Communications Tel: +353-1-660-9377
Visit the website at: www.kareliandiamondresources.com
CHAIRMAN'S STATEMENT
Dear Shareholder,
I have great pleasure in presenting your Company's Interim Report for the six
months ended 30 November 2013, a period of positive and exciting progress for
your Company's diamond exploration programme in the Karelian Craton in Finland.
The Karelian Craton, which extends across Finland and northwest Russia, is
comparable in size to the diamond rich Slave Lake Craton in Canada. Two world
class diamond deposits, Lomonosova and the Grib pipe, have been discovered in
the Russian sector of the Karelian Craton. Alrosa, the Russian company which is
the world's largest diamond miner, has indicated that this new diamond region
will represent almost all of its future growth.
Your Company's objective is to find world class diamond deposits on the Finnish
side of the craton comparable to the world class diamond deposits discovered in
the Russian sector of the craton.
Following successful fund raisings since the period end, your Company is in its
strongest financial position in its history and the management team can focus
on accelerating the diamond exploration programme in the Karelian Craton and on
maximising the benefit of the Company's agreement with Rio Tinto Mining and
Exploration ("Rio Tinto").
Diamond Exploration Programme
Your Company's exploration programme has continued to make excellent progress.
The potentially diamond bearing mantle xenolith at Seitaper near Kuhmo was
confirmed as diamondiferous by the recovery of microdiamonds. Two of the
microdiamonds were greater than 60 per cent broken, indicating the possibility
of larger stone sizes. At 6.9 hectares Seitaper is the largest known
kimberlite in Finland.
A till sampling programme at Riihivaara resulted in the discovery of G9 and G10
diamondiferous indicator minerals - so called because they are formed within
the ultramafic rocks underlying the earth's crust at the same temperatures and
pressures as diamonds. G3 and G4 garnets were also found, suggesting the
presence of eclogitic mantle material which is significant, as it tends to be
associated with higher grade diamonds.
The Riihivaara claim reservation lies approximately 10 kilometres southeast of
the Company's Seitaper kimberlite target.
The data made available to Karelian under its agreement with Rio Tinto is
continuing to be evaluated and integrated with your Company's exploration data
and this is proving very useful both in identifying new targets and in
confirming existing work and analysis.
At Kuusamo, which is located in the North-east of Finland just south of the
Arctic Circle and is bordered to the East by Russia, the interrogation of
airborne geophysics by your Company together with till sampling and integration
of data made available to Karelian under its agreement with Rio Tinto led to
the decision, in October 2013, to apply for claim reservations in the area.
Agreement with Rio Tinto Mining & Exploration
Under the agreement, Rio Tinto discloses to Karelian confidential information
and physical geological samples relating to exploration in Finland for the
purpose of the Company considering that information in relation to its
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
tonnes 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.
Finance
The results for the six months ended 30 November 2013 are set out below. The
loss for the period was ?96,610 (2012: loss ?72,545). The net assets of the
Company at 30 November 2013 were ?4,363,079 (2012: ?4,491,981).
Post November your Company raised 2,000,000 before expenses, through a placing
of 111,666,666 Ordinary Shares of EUR0.01 in the capital of the Company. In
addition, I have capitalised loans amounting to 469,875 by subscribing for
31,325,000 Ordinary Shares in the capital of the Company.
Directors and Staff
I would like to thank my fellow directors, staff and consultants for their
support and dedication, which has enabled the continued success of the Company.
Outlook
I look forward with confidence to continued progress with your Company's
diamond interests in Finland.
Yours faithfully,
Professor Richard Conroy
Chairman
INCOME STATEMENT
FOR HALF-YEAR ENDED 30 NOVEMBER 2013
Six months Six months
ended ended Year ended
30 November 30 November 31 May
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
? ? ?
OPERATING EXPENSES (89,123) (65,531) (165,604)
Finance income - bank interest - - -
receivable
Finance costs - interest on (7,487) (7,014) (14,351)
shareholder loan
LOSS BEFORE TAXATION (96,610) (72,545) (179,955)
Taxation - - -
LOSS FOR THE YEAR (96,610) (72,545) (179,955)
Loss per ordinary share - basic (?0.001) (?0.0008) (?0.0019)
and diluted
STATEMENT OF COMPREHENSIVE INCOME
FOR HALF-YEAR ENDED 30 NOVEMBER 2013
Six months Six months
ended ended Year ended
30 November 30 November 31 May
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
? ? ?
LOSS FOR PERIOD (96,610) (72,545) (179,955)
Total income and expense - - -
recognised in other comprehensive
income
TOTAL COMPREHENSIVE INCOME FOR THE (96,610) (72,545) (179,955)
PERIOD - ENTIRELY ATTRIBUTABLE TO
EQUITYHOLDERS
STATEMENT OF FINANCIAL POSITION
AS AT 30 NOVEMBER 2013
30 November 30 November 31 May
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
ASSETS ? ? ?
Non-current Assets
Intangible assets 7,068,402 6,581,906 6,801,539
Investment in Subsidiary 4 4 4
Property, plant and equipment 249 417 333
7,068,655 6,582,327 6,801,876
Current Assets
Trade and other receivables 7,051 43,574 11,691
Cash and cash equivalents 4,271 24,282 2,506
11,322 67,856 14,197
Total Assets 7,079,977 6,650,183 6,816,073
EQUITY AND LIABILITIES
Capital and Reserves
Called up share capital 922,083 922,083 922,083
Share premium 4,621,158 4,621,158 4,621,158
Share based payments reserve 487,716 412,598 450,157
Retained losses (1,667,878) (1,463,858) (1,571,268)
Total Equity 4,363,079 4,491,981 4,422,130
Non-current Liabilities
Financial Liabilities 1,212,404 1,107,283 1,171,968
Total Non-current Liabilities 1,212,404 1,107,283 1,171,968
Current Liabilities
Trade and other payables 1,504,494 1,050,919 1,221,975
Total Current Liabilities 1,504,494 1,050,919 1,221,975
Total Liabilities 2,716,898 2,158,202 2,393,943
Total Equity and Liabilities 7,079,977 6,650,183 6,816,073
STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 30 NOVEMBER 2013
Share-based Retained
Share Share Payment Earnings Total
Capital Premium Reserve (Deficit) Equity
? ? ? ? ?
At 1 June 2013 922,083 4,621,158 450,157 (1,571,268) 4,422,130
Share-based payments - - 37,559 - 37,559
Loss for the period - - - (96,610) (96,610)
At 30 November 2013 922,083 4,621,158 487,716 (1,667,878) 4,363,079
Share-based Retained
Share Share Payment Earnings Total
Capital Premium Reserve (Deficit) Equity
? ? ? ? ?
At 1 June 2012 922,083 4,621,158 375,039 (1,391,313) 4,526,967
Share-based payments - - 37,559 - 37,559
Loss for the period - - - (72,545) (72,545)
At 30 November 2012 922,083 4,621,158 412,598 (1,463,858) 4,491,981
CASH FLOW STATEMENT
FOR THE HALF-YEAR ENDED 30 NOVEMBER 2013
Six months Six months
ended ended Year ended
30 November 30 November 31 May
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
? ? ?
Cash flows from operating activities
Cash generated/(used in) by operations 76,440 (46,459) (50,768)
Tax paid - - -
Net cash generated by/(used in) 76,440 (46,459) (50,768)
operating activities
Cash flows from investing activities
Investment in exploration and (236,273) (160,544) (292,105)
evaluation
Net cash used in investing activities (236,273) (160,544) (292,105)
Cash flows from financing activities
Increase in accrued directors' 121,162 121,162 242,325
remuneration
Advances of shareholder loan 40,436 100,069 93,000
Bank interest received - - -
Interest paid on shareholder loan - - -
Net cash generated from financing 161,598 221,231 335,325
activities
Increase/(Decrease) in cash and cash 1,765 14,228 (7,548)
equivalents
Cash and cash equivalents at beginning 2,506 10,054 10,054
of period
Cash and cash equivalents at end of 4,271 24,282 2,506
period
NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 30 NOVEMBER 2013
1. Basis of preparation
The half-yearly financial statements have been prepared on the basis of the
recognition and measurement requirements of International Financial Reporting
Standards (IFRS) as adopted by the European Union (EU), and their
interpretations adopted by the International Accounting Standards Board (IASB).
The accounting policies used in the preparation of the half-yearly financial
information are the same as those used in the Company's audited financial
statements for the year ended 31 May 2013.
2. Earnings per share
The calculation of the loss per ordinary share of ?0.001 (2012: loss ?0.0008)
is based on the loss for the financial year of ?96,610 (2012: loss ?72,545) and
the weighted average number of ordinary shares in issue during the period of
92,208,342 (2012: 92,208,342).
Since the Company incurred a loss the effect of share options and warrants
would be anti-dilutive.
3. Dividends
No dividends were paid or are proposed in respect of the period ended 30
November 2013.
4. Copy of half yearly report
A copy of the half yearly report 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.
END