REG-Karelian Diamond Resources Plc: Final Results for the Year to 31 May 2025
26/11/2025 07:30
26 November 2025
Karelian Diamond Resources plc
(“ Karelian ” or the “
Company ”)
FINAL RESULTS FOR THE YEAR TO 31 MAY 2025
NOTICE OF ANNUAL GENERAL MEETING
Karelian Diamond Resources plc (AIM: KDR), the diamond exploration company
focused on Finland and Ireland, announces its audited financial statements for
the year ended 31 May 2025. Details of these can be
found below and a full copy of the Annual Results can be viewed on the
Company’s website. During the period the Company advanced its prospects in
both Finland and Ireland.
Highlights of the period included:
* The long-awaited decision regarding mine boundaries for the
Lahtojoki diamond deposit in Finland was received. It is the Company’s
intention to move through the development stage and on to production and the
Company is focussed on securing appropriate strategic investment to this end.
* Following analysis of basal till samples excavated at various
target locations in the Kuhmo region of Finland a semi-airborne unmanned
aerial vehicle (UAV) survey was completed and the data resulting from this
survey was processed. The geophysical interpretation of the data identified
two diatreme-shaped anomalies that could represent the kimberlitic source of
the green diamond. A follow up drilling programme when weather conditions suit
is planned.
* A number of interlinking new licences and licence extensions have
also been obtained in the Kuhmo area.
* The Company’s exploration programme for Nickel, Copper and
Platinum-Group Elements in Northern Ireland, with licences covering 750Km²,
adds a significant important supplement to the Company’s diamond programme
in Finland.
* The Company has identified the site of the historic Cappagh
Copper Mine in Northern Ireland as a significant new copper target for
investigation within its KDR 4 licence area.
Brendan McMorrow, Chairman of Karelian, said:
“The Company has again made progress towards developing its targets in both
Finland and Ireland and it is the Board’s intention to now accelerate the
pace of the work, particularly in Finland where we have the opportunity to
move towards the development of a producing diamond mine.”
Annual Report and Financial Statements for the year to 31 May 2025
The full audited annual report and financial statements for the year to 31 May
2025 has been posted to shareholders and will be published on the Company's
website ( www.kareliandiamondresources.com
) shortly. Key elements can
also be viewed at the bottom of this announcement.
Annual General Meeting
The Annual General Meeting of the Company (" AGM
") will be held at The Radisson Blu St. Helen’s Hotel, Stillorgan
Road, Blackrock, Dublin at 12 noon on Wednesday 17 December 2025.
A copy of the notice of AGM has been posted to shareholders and can
be viewed on the Company's website.
Further Information:
Karelian Diamond Resources plc Brendan McMorrow, Chairman Maureen Jones, Managing Director +353-1-479-6180
Allenby Capital Limited (Nomad) Nick Athanas / Nick Harriss +44-20-3328-5656
Peterhouse Capital Limited (Joint Broker) Lucy Williams / Duncan Vasey +44-20-7469-0930
CMC Markets (Joint Broker) Douglas Crippen + 44-20-3003-8632
Lothbury Financial Services Michael Padley +44-20-3290-0707
Hall Communications Don Hall +353-1-660-9377
Dear Shareholder,
I am pleased to present the Company’s Annual Report and Financial Statements
for the year ended 31 May 2025, a year which saw progress on our projects in
both Finland and Northern Ireland.
The Lahtojoki Diamond Deposit
During the year the Company was granted a mining concession certificate by
Tukes which formally entitles the Company to utilise the minerals within the
mining concession. This was a critical milestone for
your Company as it allows the Company to proceed with its plans to bring in a
mine at Lahtojoki.
The Lahtojoki mining project comprises a mining concession covering 71
hectares (c. 176 acres), including a kimberlite pipe with a surface area of
1.6 hectares (c.4 acres). Since its’ initial purchase
of the project over eight years ago, the Company has been steadily working
with the relevant authorities to achieve the various milestones required for
the granting of a mining concession certificate by Tukes.
Now that this has been received, focus has turned to securing appropriate
strategic investment to take this project through the development stage and on
to production. I do not expect this to be easy,
however with the presence of fancy diamonds, including pink diamonds, and also
the potential for the mine to act as a hub for other developments by your
Company in the area, I believe the Company is an attractive proposition as the
first diamond mine in Europe outside of Russia.
Diamond Exploration in the Kuhmo Region
Exploration work continues in the Kuhmo region of Finland where during the
year, significantly, the geophysical interpretation of electromagnetic data
from a UAV-based survey identified two diatreme-shaped anomalies that could
represent the kimberlitic source of the green diamond that is the focus of the
Company’s exploration in the area. These two diatreme anomalies also have
significant kimberlite indicator mineral fans down ice, with numerous
Peridotitic garnets (G10 and G9) and even garnets from the diamond stability
field (G10D) as well as Eclogitic garnets (G4) and the best indicator of all
the green diamond. The Company is classifying the
resultant target as a high priority for drilling and has incorporated the
testing of this target into its plans for the financial year ending May 2026.
In February 2025 the Company was granted a new reservation, namely
“Kuumu-1” in the Lentiira area of northern Kuhmo, which is approximately
30 kms to the north of the noted green diamond discovery.
The Lentiira area is considered highly prospective by the Company. Several
orangeite dikes with highly prospective indicator mineral compositions were
discovered in the area by European Diamonds PLC in the early 2000s, and
diamonds were discovered by till sampling in a number of locations.
Considering the fact that the ultimate sources of the main
indicator fans still remain unlocated, the exploration possibilities for the
Company in the Lentiira area are interesting.
Extensions for the exploration permits covering the Seitaperä diamondiferous
kimberlite (lamproite) in Kuhmo, and the kimberlite (olivine lamproite)
discovery at Riihivaara are held until a minimum of Q1 2027.
We are pleased to note that the various licences in the Kuhmo area
interlink and cover an area that has the potential to become a significant
diamond province on the Finnish side of the Karelian Craton using a potential
development at Lahtojoki as a production hub.
The Company held a public meeting in Kuhmo in January 2025 in relation to its
diamond exploration activities in Finland which was well received.
Nickel, Copper and Platinum Group Metals in Northern Ireland
Your Company holds a significant licence package covering over 1,000 km
2 in Northern Ireland where it has established first move
advantage and continues to advance its exciting exploration programme
exploring for Nickel, Copper and Platinum Group Elements over the year under
review. An assessment of the Company’s licences by
Dr Larry Hulbert was commissioned in early 2024 and on completion of his work
during the year under review, his report confirmed the significant potential
for Nickel, Copper and Platinum Group Elements and recommended a follow up
work programme.
This assessment followed the discovery in October 2023 by the Company of
indicator minerals for nickel, copper and platinum group metals during the
course of a stream sediment sampling programme. In June
2025 the Company announced that it had identified the site of the historic
Cappagh Copper Mine which will provide a significant new copper target for
investigation within its new KDR 4 licence area. This
further enhances the Company’s strategic position in Northern Ireland.
Further investigation and detailed exploration work programmes
are now being planned to review and assess the potential of this target.
Environmental, Social and Governance Issues
Great emphasis is placed by the Company on these issues, and the Company is
committed to high standards of corporate governance and integrity in all its
activities and operations, including rigorous health and safety compliance,
environmental consciousness and the promotion of a culture of good ethical
values and behaviour.
Financial Review
The Company recorded a loss for the financial year ended 31 May 2025 of
€279,357 (31 May 2024: Loss of €237,160). At 31 May 2025 the Company had
total assets of €12,246,037 (31 May 2024:
€11,811342) and net assets at the same date of €10,141,861 (31 May 2024:
€9,741,609).
During the year under review total funds raised amounted to £651,822 at share
prices ranging from 0.75 pence to 1.5 pence per share. Subsequent to the year
end, in June 2025 a further £185,000 of funds were raised at a price of 0.75
pence per share.
Directors and Staff
I would like to take this opportunity to sincerely thank my fellow directors,
staff and consultants for their work and contribution to the Company and its
operations over the past year. This is greatly
appreciated and has contributed significantly to its progress.
Brendan McMorrow
Chairman
25 November 2025
Extract from Independent Auditor’s Report
Material uncertainty related to going concern
In auditing the financial statements, we have concluded that the directors’
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
We draw attention to note 1 in the financial statements, which indicates that
during the financial year ended 31 May 2025, the Company incurred a loss of
€279,357 and had net current liabilities of €1,913,340 as at that date.
As stated in note 1, these events or conditions indicate that a material
uncertainty exists that may cast significant doubt on the Company’s ability
to continue as a going concern. Our opinion is not modified in respect of this
matter.
Our evaluation of the directors’ assessment of the Company’s ability to
continue to adopt the going concern basis of accounting included:
* obtaining an understanding of the Company’s relevant controls
over the preparation of cash flow forecasts and approval of the projections
and assumptions used in cash flow forecasts to support the going concern
assumption;
* assessing the design and determining the implementation of these
relevant controls;
* evaluating directors’ plans and their feasibility by agreeing
the inputs used in the cash flow forecast to expenditure commitments and other
supporting documentation;
* challenging the reasonableness of the assumptions applied by the
directors in their going concern assessment;
* obtaining confirmations received by the Company from the
directors and former directors evidencing that they will not seek repayment of
amounts owed to them by the Company within 12 months of the date of approval
of the financial statements, unless the Company has sufficient funds to repay;
* assessing the mechanical accuracy of the cash flow forecast
model; and
* assessing the accuracy and completeness of the relevant
disclosures made in the financial statements.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Statement of profit or loss
For the year ended 31 May 2025
Note 2025 2024
€ €
Continuing operations
Operating expenses 2 (364,615) (418,312)
Operating loss (364,615) (418,312)
Gain in fair value of warrants 10 91,738 187,628
Interest expense 11 (6,480) (6,476)
Total finance gain 85,258 181,152
Loss before taxation 3 (279,357) (237,160)
Income tax expense 5 - -
Loss for the financial year (279,357) (237,160)
Loss per share
Basic and diluted loss per share 6 (0.0020) (0.0023)
The total loss for the financial year is entirely attributable to equity
holders of the Company.
Statement of comprehensive income
For the year ended 31 May 2025
2025 2024
€ €
Loss for the financial year (279,357) (237,160)
Income recognised in other comprehensive income - -
Total comprehensive income for the financial year (279,357) (237,160)
The total comprehensive income for the financial year is entirely attributable
to equity holders of the Company.
Statement of financial position
as at 31 May 2025
31 May 31 May
Note 2025 2024
€ €
Assets
Non-current assets
Intangible assets 7 12,085,967 11,690,194
Tangible Assets 2,114 -
Total non-current assets 12,088,081 11,690,194
Current assets
Cash and cash equivalents 8 40,862 39,597
Other receivables 9 117,094 81,551
Total current assets 157,956 121,148
Total assets 12,246,037 11,811,342
Equity
Capital and reserves
Share capital presented as equity 12 3,220,201 3,203,532
Share premium 12 11,399,829 10,736,889
Share-based payments reserve 450,658 450,658
Retained deficit (4,928,827) (4,649,470)
Total equity 10,141,861 9,741,609
Liabilities
Non-current liabilities
Warrant liabilities 10,15 32,880 -
Total non-current liabilities 32,880 -
Current liabilities
Trade and other payables 11 1,928,790 1,903,601
Convertible loan 11 132,202 125,722
Derivative liability 11 10,304 10,304
Warrant liabilities 11 - 30,106
Total current liabilities 2,071,296 2,069,733
Total liabilities 2,104,176 2,069,733
Total equity and liabilities 12,246,037 11,811,342
Statement of changes in equity
for the financial year ended 31 May 2025
Share capital Share premium Share-based payment reserve Retained deficit Total equity
Note € € € € €
Balance at 1 June 2024 3,203,532 10,736,889 450,698 (4,649,470) 9,741,609
Share issue 12 16,669 789,422 - - 806,091
Share issue costs 15 - (126,482) - - (126,482)
Loss for the financial year - - - (279,357) (279,357)
Balance at 31 May 2025 3,220,201 11,399,829 450,698 (4,928,827) 10,141,861
Balance at 1 June 2023 3,200,882 10,546,844 450,658 (4,412,310) 9,786,074
Share issue 12 2,650 298,555 - - 310,205
Share issue costs - (108,510) - - (108,510)
Loss for the financial year - - - (237,160) (237,160)
Balance at 31 May 2024 3,203,532 10,736,889 450,658 (4,649,470) 9,741,609
Share capital
The share capital comprises of the nominal value share capital issued for cash
and non-cash consideration. The share capital also comprises deferred share
capital. The deferred share capital arose through the restructuring of share
capital which was approved at the Annual General Meeting held on 9 December
2016. A detailed breakdown of the share capital figure is included in Note 12.
Share premium
The share premium reserve comprises of the excess consideration received in
respect of share capital over the nominal value of shares issued net of any
direct share issue costs which are deducted from share premium in line with
the Company’s accounting policies. The fair value of
warrants issued as part of a fundraise are included in direct share issue
costs (see note 15).
Retained deficit
This reserve represents the accumulated losses absorbed by the Company to the
statement of financial position date.
Statement of cash flows
for the financial year ended 31 May 2025
2025 2024
€ €
Cash flows from operating activities Note
Loss for the financial year (279,357) (237,160)
Adjustments for:
Movement in fair value of warrants 10 (91,738) (187,628)
Interest expense 6,480 6,476
(364,615) (418,312)
Increase in trade and other payables 11 25,189 467,514
Increase in other receivables 9 (35,543) (2,548)
Net cash (used in) / from operating activities (374,969) 46,654
Cash flows from investing activities
Expenditure on intangible assets 7 (395,773) (424,300)
Purchase of tangible assets (2,114) -
Net cash used in investing activities (397,887) (424,300)
Cash flows from financing activities
Proceeds on issue of share capital 12 774,121 301,205
Net cash provided by financing activities 774,121 301,205
Increase / (decrease) in cash and cash equivalents 1,265 (76,441)
Cash and cash equivalents at beginning of financial year 39,597 116,038
Cash and cash equivalents at end of financial year 40,862 39,597
Notes
to the financial statements for the financial year ended 31 May 2025
1 Material
accounting policies
Reporting entity
Karelian Diamond Resources P.L.C. (the “Company”) is a company domiciled
in Ireland. The Company is a public limited company incorporated in Ireland
under registration number 382499. The registered office is located at Shannon
Airport House, Shannon Free Zone, Shannon, Co. Clare, V14E370, Ireland.
The principal activity of the Company during the financial year is mineral
exploration and development.
Basis of preparation
The financial statements are presented in Euro (“€”). The Euro is the
functional currency of the Company.
The financial statements are prepared under the historical cost basis except
for derivative financial instruments which are measured at fair value at each
reporting date. The preparation of financial
statements requires the Board of Directors and management to use judgements,
estimates and assumptions that affect the application of policies and reported
amounts of assets, liabilities, income and expenses. Actual results may differ
from those estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised and in any future periods affected. Details
of significant judgements are disclosed in the accounting policies.
The financial statements were authorised for issue by the Board of Directors
on 25 November 2025.
Going concern
In preparing the financial statements, the directors consider it appropriate
to use the going concern assumption, which assumes the company will have
sufficient resources to enable it to meet its liabilities as they fall due.
The Company recorded a loss of €279,357 (31 May 2024:
loss of €237,160) for the financial year ended 31 May 2024. The Company had
net assets of €10,141,861 (31 May 2024: €9,741,609) at that date. The
Company had net current liabilities of €1,913,340 (31 May 2024:
€1,948,585) at that date. The Company had cash and cash equivalents of
€40,862 (31 May 2024: €39,597) at 31 May 2025. As
set out in the Chairman’s statement, the Company expects to incur capital
expenditure in 2025 and 2026, consistent with its strategy as an exploration
company.
The Directors have considered carefully the financial position of the Company
and in that context, have prepared and reviewed cash flow forecasts for the
period to 30 November 2026. In doing so, the Directors
are mindful of the risks faced by the business including in particular general
industry risks facing companies in the natural resource sector as described in
the Directors Report. The Board of Directors are
experienced at managing the peaks and troughs of investor sentiment in the
natural resources industry and will continue to manage the cashflows of the
Company including planning/revising work programmes according to available
funds. The Company continues to rely on the support of
its Directors and also its ability to raise appropriate finance through either
asset level investment or fresh issues of share capital to meet its
liabilities as they fall due. In this context the
Board of Directors note that all
directors, namely, Brendan McMorrow, Maureen T.A. Jones, Howard Bird and Dr.
Sorċa Conroy, and former Directors namely Séamus P. FitzPatrick, James P.
Jones and the Estate of Professor Richard Conroy, have confirmed that they
will not seek repayment of amounts owed to them by the Company of €1,614,885
(31 May 2024: €1,476,970) for a minimum period of 12 months from the date of
approval of the financial statements, unless the Company has sufficient funds
to repay.
The Directors recognise that net current liabilities of €1,913,340 (31 May
2024: €1,948,585) is a material uncertainty that may cast significant doubt
on the Company’s ability to continue as a going concern and, therefore, that
it may be unable to realise its assets and discharge its liabilities in the
normal course of business. The cashflows include plans
to raise funds to carry out the activities of the company and the Board of
Directors are confident that adequate funds can be raised through strategic
partnerships or direct market fundraising to meet their objectives.
To mitigate the risk of the timing and scale of investment not
being met, the Board and management continue to take actions to monitor and
manage the cost base and project implementation plans as appropriate.
In reviewing the proposed work programme for exploration and evaluation
assets, the results obtained from the exploration programme, the support noted
above from the Board (and past Board members), the funds raised post year end
and the prospects for raising additional funds as required, the Board of
Directors are satisfied that it is appropriate to prepare the financial
statements on a going concern basis.
The financial statements do not include any adjustments to the carrying value
and classification of assets and liabilities that would arise if the Company
was unable to continue as going concern.
Statement of compliance
The Company’s financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union (“EU”) and the requirements of the Companies Act 2014.
Recent accounting pronouncements
(i) New and
amended standards adopted by the Company
The Company has adopted the following amendments to standards for the first
time for its annual reporting year commencing 1 June 2024:
* Amendments to IFRS 16 Leases: Lease liability in a sale and
leaseback – Effective date 1 January 2024; and
* Amendments to IAS 1 Presentation of Financial Statements:
Classification of liabilities as current or
non-current – Effective date 1 January 2024.
The adoption of the above amendments to standards had no significant impact on
the financial statements of the Group and the Company either due to being not
applicable or immaterial.
(ii) New
standards and interpretations not yet adopted by the Company
Certain new accounting standards and interpretations have been published and
endorsed by the EU that are not mandatory for 31 May 2025 reporting periods
and have not been early adopted by the Company.
Directors does not consider that those of the below that will be effective for
the year ended 31 May 2026 will have a material effect on the financial
statements and they are considering whether or not those that become effective
in the following financial year will have any impact on the financial
statements.
* Amendments to IAS 21 Lack of Exchangeability – Effective date 1
January 2025;
* Amendments to IAS 7 and IFRS 17 regarding supplier finance
arrangements – Effective date 1 January 2025;
* Amendments to IFRS 9 and IFRS 7 regarding classification and
measurement of financial instruments – Effective date 1 January 2026;
* Annual Improvements to IFRS Accounting Standards – Volume 11
– Effective date 1 January 2026;
The following new standards and amendments to standards have been issued by
the International Accounting Standards Board but have not yet been endorsed by
the EU, accordingly, none of these standards have been applied in the current
year. The Board of Directors is currently assessing whether these standards if
endorsed by the EU will have any impact on the financial statements of the
Company.
* IFRS 18 Presentation and Disclosure in Financial Statements –
Effective date 1 January 2027;
* IFRS 19 Subsidiaries without Public Accountability: Disclosures
– Effective date 1 January 2027;
* Amendments to SASB standards regarding enhancement of their
international applicability;
(a) Intangible assets
The Company accounts for mineral expenditure in accordance with IFRS 6:
Exploration for and Evaluation of Mineral Resources
.
(i) Capitalisation
All costs related to acquiring the legal rights to explore will be
capitalised. All other costs incurred prior to acquiring the rights to explore
are charged directly to the consolidated statement of profit or loss .
Exploration, appraisal and development expenditure incurred on exploring, and
testing exploration prospects are accumulated and capitalised as intangible
exploration and evaluation (“E&E”) assets.
E&E capitalised costs include geological and geophysical costs, and other
direct costs of exploration (drilling, trenching, sampling and technical
feasibility and commercial viability activities). In addition, E&E capitalised
costs include an allocation from operating expenses, including share-based
payments. All such costs are necessary for exploration and evaluation
activities.
E&E capitalised costs are not amortised prior to the conclusion of appraisal
activities.
At completion of appraisal activities if technical feasibility is demonstrated
and commercial resources are discovered, then the carrying amount of the
relevant E&E asset will be reclassified as a development and production asset,
once the carrying value of the asset has been assessed for impairment. If
following completion of appraisal activities in an area, it is not possible to
determine technical feasibility and commercial viability, or if the right to
explore expires, then the costs of such unsuccessful exploration and
evaluation are written off to the statement of profit or loss in the period in
which the event occurred.
(ii) Impairment
If facts and circumstances indicate that the carrying value of an E&E asset
may exceed its recoverable amount, an impairment review is performed. The
following are considered to be key indicators of impairment in relation to E&E
assets:
* The period for which the entity has the right to explore in the
specific area has expired or will expire in the near future and is not
expected to be renewed.
* Substantive expenditure on further exploration for and evaluation
of mineral resources in the specific area is neither budgeted nor planned.
* Exploration for and evaluation of mineral resources in the
specific area have not led to the discovery of commercially viable quantities
of mineral resources and the entity has decided to discontinue such activities
in the specific area.
* Sufficient data exists to indicate that, although a development
in the specific area is likely to proceed, the carrying amount of the
exploration and evaluation asset is unlikely to be recovered in full from
successful development or by sale.
The Company accounts for mineral expenditure in accordance with IFRS 6:
Exploration for and Evaluation of Mineral Resources
.
(i) Capitalisation
All costs related to acquiring the legal rights to explore will be
capitalised. All other costs incurred prior to acquiring the rights to explore
are charged directly to the consolidated statement of profit or loss .
Exploration, appraisal and development expenditure incurred on exploring, and
testing exploration prospects are accumulated and capitalised as intangible
exploration and evaluation (“E&E”) assets.
E&E capitalised costs include geological and geophysical costs, and other
direct costs of exploration (drilling, trenching, sampling and technical
feasibility and commercial viability activities). In addition, E&E capitalised
costs include an allocation from operating expenses, including share-based
payments. All such costs are necessary for exploration and evaluation
activities.
E&E capitalised costs are not amortised prior to the conclusion of appraisal
activities.
At completion of appraisal activities if technical feasibility is demonstrated
and commercial resources are discovered, then the carrying amount of the
relevant E&E asset will be reclassified as a development and production asset,
once the carrying value of the asset has been assessed for impairment. If
following completion of appraisal activities in an area, it is not possible to
determine technical feasibility and commercial viability, or if the right to
explore expires, then the costs of such unsuccessful exploration and
evaluation are written off to the statement of profit or loss in the period in
which the event occurred.
(ii) Impairment
If facts and circumstances indicate that the carrying value of an E&E asset
may exceed its recoverable amount, an impairment review is performed. The
following are considered to be key indicators of impairment in relation to E&E
assets:
* The period for which the entity has the right to explore in the
specific area has expired or will expire in the near future and is not
expected to be renewed.
* Substantive expenditure on further exploration for and evaluation
of mineral resources in the specific area is neither budgeted nor planned.
* Exploration for and evaluation of mineral resources in the
specific area have not led to the discovery of commercially viable quantities
of mineral resources and the entity has decided to discontinue such activities
in the specific area.
* Sufficient data exists to indicate that, although a development
in the specific area is likely to proceed, the carrying amount of the
exploration and evaluation asset is unlikely to be recovered in full from
successful development or by sale.
For E&E assets, where the above indicators exist on an annual basis, an
impairment test is carried out. The E&E assets are categorised into Cash
Generating Units (“CGU”) on a country-by-country (where material) basis.
The carrying value of the CGU is compared to its recoverable amount and any
resulting impairment loss is written off to the statement of profit or loss.
The recoverable amount of the CGU is assessed as the higher of its fair value,
less costs to sell, and its value in use.
(b) Income taxation expense
Income tax expense comprises current and deferred tax. Income tax expense is
recognised in the statement of profit or loss except to the extent that it
relates to items recognised directly in other comprehensive loss, in which
case it is recognised in the statement of comprehensive income. Current tax is
the expected tax payable on the taxable income for the year, using tax rates
enacted or substantively enacted at the reporting date, and any adjustment to
tax payable in respect of previous years.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the liability method. Deferred tax
liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised.
(c) Share-based payments
The Company classifies instruments issued as financial liabilities or equity
instruments in accordance with the substance of the contractual terms of the
instruments. When the warrants issued (see note 15 for details) have an
exercise price in sterling, they are derivative in nature and are liability
classified. They do not qualify for equity classification as any cash
settlement on exercise of these warrants will be received in a foreign
currency. Where warrants are issued in the functional currency of the Company
and meet the other necessary conditions, they are recognised as equity
instruments. The warrant liabilities are recognised at their fair value on
initial recognition and subsequently are measured at fair value through
statement of profit or loss. Any incremental direct costs associated with the
issuance of warrants are taken as an immediate charge to finance costs through
the statement of profit or loss. See note 11 for further details.
For equity-settled share-based payment transactions (i.e. the granting of
share options and share warrants), the Company measures the services and the
corresponding increase in equity at fair value at the measurement date (which
is the grant date) using a recognised valuation methodology for the pricing of
financial instruments (Binomial Lattice Model or Black Scholes Model).
(d) Trade and other receivables and
payables
Trade and other receivables are measured at their transaction price and
subsequently measured at amortised cost. Trade and other payables are measured
at initial recognition at fair value, and subsequently measured at amortised
cost.
(e) Earnings per share
The Company presents basic and diluted earnings per share (“EPS”) data for
its ordinary shares. Basic EPS is calculated by dividing the profit or loss
attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the period. Diluted EPS is determined by
adjusting the profit attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the effects of all
potentially dilutive ordinary shares.
(f) Cash and cash
equivalents
Cash and cash equivalents consist of cash at bank held by the Company and
short-term bank deposits with a maturity of three months or less. Cash and
cash equivalents are held for the purpose of meeting short-term cash
commitments.
(g) Pension costs
The Company provides for pensions for certain employees through a defined
contribution pension scheme. The amount charged to the statement of profit or
loss is the contribution payable in that financial year.
Any difference between amounts charged and contributions paid to the pension
scheme is included in receivables or payables in the statement of financial
position.
(h) Foreign currencies
Transactions denominated in foreign currencies relating to costs and
non-monetary assets are translated into € at the rates of exchange ruling on
the dates on which the transactions occurred. Monetary assets and liabilities
denominated in foreign currencies are translated into € at the rate of
exchange ruling at the statement of financial position date. The resulting
profits or losses are dealt with in the statement of profit or loss .
(i) Directors’ Loans
Directors’ loans are initially measured at fair value, net of transaction
costs and subsequently measured at amortised cost using the effective interest
method, with interest expense recognised on the effective interest rate
method. The effective interest method is a method of calculating the amortised
cost of a financial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments through the expected life of the
financial liability.
(j) Convertible loan
As the convertible loan is made up of both liability and derivative
components, it is considered to be a compound financial instrument. At initial
recognition, the carrying amount of a compound financial instrument is
allocated to its liability and derivative components. The fair value of the
liability, which is the difference between the transaction price and the fair
value of the conversion feature, and derivative is recognised as a liability
in the statement of financial position. The conversion feature is subsequently
measured at fair value with changes recognised in profit or loss. The
liability is subsequently measured at amortised cost. The Company accounts for
the interest expense of the convertible loan note at the effective interest
rate. The difference between the effective interest rate and interest rate
attached to the convertible loan increases the carrying amount of the
liability so that, on maturity, the carrying amount is equal to the capital
cash repayment that the Company may be required to pay.
(k) Ordinary shares
Ordinary shares are classified as equity. Costs directly attributable to the
issue of ordinary shares are recognised as a deduction from retained earnings,
net of any tax effects. Where warrants are issued for
the sole purpose of assisting with an issue of equity or to meet broker
transaction costs directly attributable to the issue of equity, the amount
initially recognised, that is their fair value, is deducted from share
premium. Subsequently, where the warrants qualify as
equity they are recognised in other reserves and the amount recognised is not
changed. If the warrants qualify as a liability the fair
value is trued up from one reporting period to the next through profit or
loss.
(l) Impairment - financial assets are measured at amortised cost
Financial assets measured at amortised cost are reviewed for impairment loss
at each reporting date.
The Company measures the loss allowance at an amount equal to the lifetime
expected credit losses (“ECL”) as required under a simplified approach for
receivables that do not contain a financing component. The Company’s
approach to ECL reflects a probability-weighted outcome, the time value of
money and reasonable and supportable information that is available without
undue cost or effort at the reporting date about past events, current
conditions and forecasts of future economic conditions. Significant financial
difficulties of the counterparty, probability that the counterparty will enter
bankruptcy or financial re-organisation and default in payments are all
considered indicators for increases in credit risks. If the credit risk
increases to the point that it is considered to be credit impaired, interest
income will be calculated based on the gross carrying amount adjusted for the
loss allowance. Any contractual payment which is more than 90 days past due is
considered credit impaired.
(m) Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Company
becomes a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and
substantially all the risks and rewards are transferred. A financial liability
is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing
component and are measured at the transaction price in accordance with IFRS
15, all financial assets are initially measured at fair value adjusted for
transaction costs (where applicable).
Impairment of financial assets
IFRS 9’s impairment requirements use forward-looking information to
recognise expected credit losses – the ‘expected credit loss (ECL)
model’. Instruments within the scope of the requirements included loans and
other debt-type financial assets measured at amortised cost and FVOCI, trade
receivables, contract assets recognised and measured under IFRS 15 and loan
commitments and some financial guarantee contracts (for the issuer) that are
not measured at fair value through profit or loss. The Group considers a
broader range of information when assessing credit risk and measuring expected
credit losses, including past events, current conditions, reasonable and
supportable forecasts that affect the expected collectability of the future
cash flows of the instrument.
Subsequent measurement of financial assets
Financial assets held within a different business model other than ‘hold to
collect’ or ‘hold to collect and sell’ are categorised at FVTPL.
Further, irrespective of the business model used, financial assets whose
contractual cash flows are not solely payments of principal and interest are
accounted for at FVTPL. All derivative financial instruments fall into this
category, except for those designated and effective as hedging instruments,
for which the hedge accounting requirements apply (see below). The category
also contains an equity investment. The Group accounts for the investment at
FVTPL and did not make the irrevocable election to account for the investment
in XY Ltd and listed equity securities at FVOCI. The fair value was determined
in line with the requirements of IFRS 13 ‘Fair Value Measurement’. Assets
in this category are measured at fair value with gains or losses recognised in
profit or loss.
The fair values of financial assets in this category are determined by
reference to active market transactions or using a valuation technique where
no active market exists.
Classification and measurement of financial liabilities
The Company’s financial liabilities include trade and other payables and
derivative financial instruments. Financial liabilities are initially measured
at fair value, and, where applicable. Subsequently, financial liabilities are
measured at amortised cost using the effective interest method except for
derivatives and financial liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses recognised in profit or loss
(other than derivative financial instruments that are designated and effective
as hedging instruments). All interest-related charges and, if applicable,
changes in an instrument’s fair value that are reported in profit or loss
are included within finance costs or finance income.
(n) Significant accounting
judgements and key sources of estimation uncertainty
Significant judgements in applying the Company’s accounting policies
The preparation of the financial statements requires the Board of Directors to
make judgements and estimates and form assumptions that affect the amounts of
assets, liabilities, contingent liabilities, revenues and expenses reported in
the financial statements. On an ongoing basis, the Board of Directors
evaluates its judgements and estimates in relation to assets, liabilities,
contingent liabilities, revenue and expenses. The Board of Directors bases its
judgements and estimates on historical experience and on other factors it
believes to be reasonable under the circumstances, the results of which form
the basis of the reported amounts that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions and conditions. In the process of applying the Company’s
accounting policies above, the Board of Directors have identified the
judgemental areas that have the most significant impact on the amounts
recognised in the financial statements (apart from those involving
estimations), which are dealt with as follows:
Exploration and evaluation assets
The assessment of whether operating costs and salary costs are capitalised to
exploration and evaluation costs or expensed involves judgement. The Board of
Directors consider the nature of each cost incurred and whether it is deemed
appropriate to capitalise it within exploration and evaluation assets. Given
that the activity of management and the resultant administration and salary
costs are primarily focused on the Company’s diamond prospects, the Board of
Directors consider it appropriate to capitalise a portion of such costs. These
costs are reviewed on a line-by-line basis with the resultant calculation of
the amount to be capitalised being specific to the activities of the Company
in any given year.
Cash generating units (“CGUs”)
As outlined in the intangible assets accounting policy, the exploration and
evaluation assets should be allocated to CGUs. The determination of what
constitutes a CGU requires judgement. The Board of Directors consider its
diamond licences in the Kuhmo region of Finland to be one CGU and its copper /
nickel / platinum group element licences in Northern Ireland to be a separate
CGU.
The carrying value of each CGU is compared to its recoverable amount. The
recoverable amount of the CGU is assessed as the higher of its fair value less
costs to sell and its value in use. The determination of value in use requires
the following judgements:
* Estimation of future cash flows expected to be derived from the
asset.
* Expectation about possible variations in the amount or timing of
the future cash flows.
* The determination of an appropriate discount rate.
Going concern
The preparation of financial statements requires an assessment on the validity
of the going concern assumption. The validity of the going concern assumption
is dependent on the successful further development and ultimate production of
the mineral resources and the availability of sufficient finance to bring the
resources to economic maturity and profitability. The Board of Directors have
reviewed the proposed programme for exploration and evaluation assets and, on
the basis of the equity raised after the financial year, the results from the
exploration programme and the prospects for raising additional funds as
required, consider it appropriate to prepare the financial statements on the
going concern basis. Refer to page 30 for further details.
Deferred tax
No deferred tax asset has been recognised in respect of tax losses as it is
not considered probable that future taxable profit will be available against
which the related temporary differences can be utilised.
Key sources of estimation uncertainty
The key sources of estimation uncertainty that have a significant risk of
causing material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below.
Exploration and evaluation assets
The carrying value of exploration and evaluation assets in the statement of
financial position was €12,085,967 (31 May 2024: €11,690,194) at 31 May
2025 (Note 7). The Board of Directors carried out an
assessment, in accordance with IFRS 6: Exploration for and Evaluation of
Mineral Resources relating to likelihood of licence renewal, likelihood of
further expenditure, possible discontinuation of activities over specific
claims and available data which may suggest that the recoverable value of an
exploration and evaluation asset is less than its carrying amount.
This assessment included an assessment of the likelihood of securing
a future strategic investment or joint venture partner to assist with the
development of the assets. The granting, post year end,
of a mining permit in Lahtojoki, provides the opportunity to progress the
development of a central processing hub for its exploration assets in the
Kuhmo region. Having considered the prospects for both
development of its diamond deposit and further exploration success in its
licence area, the Board of Directors is satisfied as to the carrying value of
these assets and is satisfied that these are recoverable, acknowledging
however that their recoverability is dependent on future successful
exploration efforts
Employee benefits – Share-based payment transactions
The Company operates equity-settled share-based payment arrangements with
non-market performance conditions which fall within the scope of and are
accounted for under the provisions of IFRS 2: Share-based Payment.
Accordingly, the grant date fair value of the options under these schemes is
recognised as an operating expense with a corresponding increase in the
“Share-based payment reserve”, within equity, where the exercise price is
granted in EUR or recognised as a liability where a different currency is
quoted as the exercise price over the vesting period. The estimation of
share-based payment costs requires the selection of an appropriate valuation
model and consideration as to the inputs necessary for the valuation model
chosen. The Company has made estimates as to the volatility of its own shares,
the probable life of options granted and the time of exercise of those
options. The model used by the Company is the Black Scholes Model. The fair
value of these options is measured using an appropriate option pricing model,
taking into account the terms and conditions upon which the options were
granted. The amount recognised as an expense is adjusted to reflect the actual
number of share options that vest, except where forfeiture is only due to
share prices not achieving the threshold for vesting.
2 Operating expenses
2025 2024
Analysis of operating expenses € €
Operating expenses 531,151 570,309
Transfer to intangible assets (166,536) (151,997)
364,615 418,312
Operating expenses are analysed as follows:
Professional fees 183,220 214,285
Wages and salaries 180,109 185,705
Directors’ Fees 60,833 74,662
Other operating expenses 65,489 55,657
Auditor’s remuneration 41,500 40,000
531,151 570,309
Other operating expenses consisted mainly of freight and courier, rent and
printing, stationery and postage.
Of the above costs, a total of €166,536 (31 May 2024: €151,997) is
capitalised to intangible assets based on a review of the nature and quantum
of the underlying costs. Refer to Note 1(a)(i) for further details. The costs
capitalised to intangible assets mainly relate to the costs of geological and
on-site personnel together with an appropriate portion of executive management
salaries. €38,542 (31 May 2024: €57,500) is charged to the Statement of
profit or loss in relation to Directors’ salaries.
2025 2024
€ €
Wages and salaries costs as disclosed above is analysed as follows:
Wages and salaries 174,902 171,618
Social insurance costs 5,207 14,087
180,109 185,705
The amount of wages, salaries and related costs incurred during the financial
year was recorded as follows:
2025 2024
€ €
Capitalised to intangible assets 141,567 83,058
Charged to the profit or loss 38,542 107,309
180,109 190,367
The average number of persons employed during the year (including executive
Directors) by activity was as follows:
2025 2024
Corporate management and administration 2 2
Exploration and evaluation 1 1
3 3
An analysis of remuneration for each Director of the Company in the current
financial year (prior to amounts transferred to intangible assets) is as
follows:
Fees € Salary € Total €
Professor Richard Conroy 8,333 27,083 35,416
Maureen T.A. Jones 10,000 50,000 60,000
Brendan McMorrow 16,667 - 16,667
Séamus P. FitzPatrick 5,833 - 5,833
Dr. Sorċa Conroy 10,000 - 10,000
Howard Bird 10,000 - 10,000
60,833 77,083 137,916
An analysis of remuneration for each Director of the Company in the prior
financial year (prior to amounts transferred to intangible assets) is as
follows:
Fees € Salary € Total €
Professor Richard Conroy 20,000 65,000 85,000
Maureen T.A. Jones 10,000 50,000 60,000
Brendan McMorrow 10,000 - 10,000
Séamus P. FitzPatrick 10,000 - 10,000
Dr. Sorċa Conroy 10,000 - 10,000
Howard Bird 10,000 - 10,000
70,000 115,000 185,000
No share based payments or pension contribution costs have been made or
incurred over the past number of years. It is
anticipated that the Company will move towards incorporating share based
payments as part of overall remuneration in the future. Accrued amounts of
salary and pension owing to current and former directors are set out in Note
11.
3 Loss
before taxation
The loss before taxation is arrived at after charging
the following items:
2025 2024
€ €
Auditor’s remuneration
The analysis of the auditor’s remuneration is as follows:
* Audit of entity financial statements 41,500 40,000
No fees were incurred for other assurance, tax advisory or other non-audit
services in respect of the current or prior financial years.
4 Directors’
remuneration
2025 2024
€ €
Aggregate emoluments paid to or receivable by Directors in respect of qualifying services 137,916 185,000
During the year ended 31 May 2025 and 31 May 2024, one Director was a member
of a defined contribution scheme but no contributions were due or paid and
accordingly none were made, no other disclosures are required by Section 305
of the Companies Act 2014.
No compensation has been paid or is payable for the loss of office or other
termination benefit in respect of the loss of office of Director or other
offices (31 May 2024: €Nil).
5 Income
tax expense
No taxation charge arose in the current or prior financial year due to losses
incurred in prior years and this year.
Factors affecting the tax charge for the financial year:
The total tax charge for the financial year is different to the standard rate
of Irish corporation tax. This is due to the following:
2025 2024
€ €
Loss on ordinary activities before taxation (279,357) (237,160)
Irish standard tax rate 12.50% 12.50%
Tax credit at the Irish standard rate (34,920) (29,645)
Effects of:
Losses carried forward utilised - -
Losses carried forward for future utilisation 34,920 29,645
Tax charge for the financial year - -
No deferred tax asset has been recognised on accumulated tax losses as it
cannot be considered probable that future taxable profit will be available
against which the deferred tax asset can be utilised.
Unutilised losses may be carried forward from the date of the origination of
the losses but may only be offset against taxable profits earned from the same
trade. Unutilised losses carried forward amounted to €13,084,193 at 31 May
2025 and €12,804,836 at 31 May 2024.
6 Loss per share
Basic loss per share 31 May 31 May
2025 2024
€ €
Loss for the year attributable to equity holders of the Company (279,357) (237,160)
Number of ordinary shares at start of the financial year 105,092,749 94,492,749
Number of ordinary shares issued during the financial year 66,676,662 10,600,000
Number of ordinary shares at end of the financial year 171,769,411 105,092,749
Weighted average number of ordinary shares for the purposes of basic and diluted loss per share 138,490,187 101,040,146
Basic and diluted loss per ordinary share (0.0020) (0.0023)
Diluted loss per share
The effect of share options and warrants is anti-dilutive.
7 Intangible
assets
Exploration and evaluation assets
31 May 31 May
Cost 2025 2024
€ €
At 1 June 11,690,194 11,265,894
Expenditure capitalised during the financial year:
* Licence and appraisal costs 199,937 272,303
* Other operating expenses 195,836 151,997
At 31 May 12,085,967 11,690,194
Exploration and evaluation assets relate to expenditure incurred in the
development of mineral exploration opportunities. These
assets are carried at historical cost and have been assessed for impairment in
particular with regard to the requirements of IFRS 6:
Exploration for and Evaluation of Mineral Resources
relating to remaining licence or claim terms, likelihood of renewal,
likelihood of further expenditure, possible discontinuation of activities as a
result of specific claims and available data which may suggest that the
recoverable value of an exploration and evaluation asset is less than its
carrying amount.
The Board of Directors note that the realisation of the intangible assets is
dependent on further successful development and ultimate production of the
mineral resources and the availability of sufficient finance to bring the
resources to economic maturity and profitability.
Mineral interests are categorised geographically as follows:
Finland
31 May 31 May
Cost 2025 2024
€ €
At 1 June 11,501,738 11,223,401
Expenditure capitalised during the financial year:
* Licence and appraisal costs 124,539 157,299
* Other operating costs 149,999 121,038
At 31 May 11,777,276 11,501,738
Northern Ireland
31 May 31 May
Cost 2025 2024
€ €
At 1 June 188,456 42,493
Expenditure capitalised during the financial year:
* Licence and appraisal costs 74,399 89,287
* Other operating costs 45,836 56,676
At 31 May 308,691 188,456
In assessing exploration licences for impairment the Board of Directors have
considered in particular the proposed work programmes for the underlying
diamond resources in Finland and copper – nickel – platinum group elements
in Northern Ireland and their likelihood of adding to the existing resource
and resource potential in their licence areas. They have
also assessed the likelihood of securing a future strategic investment or
joint venture partner to assist with the development of the assets. The Board
of Directors are satisfied that following this review that no indications of
impairment exist requiring a reduction in the carrying value of the
capitalised exploration expenditure above.
The diamond deposit at Lahtojoki has recently had its mining permit granted by
Tukes and will shortly be entering its development phase.
In assessing this asset in particular, the Board of Directors have also
considered the potential recoverability of the carrying value by evaluating a
financial model for the development of the deposit at Lahtojoki and are
satisfied that no impairment of the carrying value of the related capitalised
expenditure is required.
8 Cash and
cash equivalents
31 May 2025 31 May 2024
€ €
Cash held in bank accounts 40,862 39,597
40,862 39,597
Certain of the above bank accounts are held for the purpose of holding
collateral deposits related to the Finnish licenses. As at 31 May 2025, a
total amount of €24,500 (31 May 2024: €24,500) relates to these collateral
deposits and are treated as restricted cash balances.
9 Other
receivables
31 May 2025 31 May 2024
€ €
VAT receivable 76,387 51,469
Prepayments 38,707 28,082
Other receivables 2,000 2,000
117,094 81,551
The Directors consider that the carrying values of receivables are approximate
to their fair values. No expected credit losses exist in
relation to the Company’s receivables as at 31 May 2025 (2024: €Nil).
10 Non-current
liabilities
Warrant liabilities
During the year ended 31 May 2025, a total of 54,876,664 warrants were issued
with a sterling exercise price and expiry dates of between 12 months and 24
months. 10,000,000 warrants with a sterling exercise price and expiry of 12
months were issued in the prior year. The fair value amount of each warrant at
grant date was valued using the Black Scholes Model and recorded as warrant
liabilities.
At 31 May 2025, the warrants in issue were fair valued with the movement in
fair value of €91,738 (2024: €187,628) being recorded in the statement of
profit or loss and a fair value of €32,880 (2024: €30,106) recorded in the
statement of financial position.
Warrant in issue in the prior year had a 12 month expiry date and were
included in current liabilities (see Note 11). These
warrants lapsed unexercised during the current year.
Warrants issued on 1 July 2024 have a 12-month expiry date and a Nil value as
at 31 May 2025. Warrants issued on 20 February 2025
have a 24-month term included in non-current liabilities. See Note 15 for
further details.
31 May 2025 31 May 2024
€ €
Opening balance 30,106 109,224
Warrant liability recorded on issue (Note 15) 94,512 108,510
Movement in fair value of warrants (91,738) (187,628)
32,880 30,106
Disclosed as
Non current liability (Note 10) 32,880 -
Current liability (Note 11) - 30,106
11 Current liabilities
Trade and other payables
31 May 2025 31 May 2024
€ €
Accrued Directors’ remuneration
Fees and other emoluments 1,351,636 1,213,720
Pension contributions 263,250 263,250
Amount due to related party (see Note 14 (b)) 75,065 144,551
Directors’ Current Account (Note 14 ) 6,772 -
Other creditors and accruals 232,067 282,080
1,928,790 1,903,601
It is the Company’s practice to agree terms of transactions, including
payment terms with suppliers. It is the Company’s policy that payment is
made according to the agreed terms. The carrying value of the trade and other
payables approximates to their fair value. The
Directors, Maureen T.A. Jones, Dr. Sorċa Conroy, Howard Bird and Brendan
McMorrow, and former Directors, Séamus P. FitzPatrick James P. Jones and
representatives of the Estate of Professor Richard Conroy have confirmed that
they will not seek repayment of amounts owed to them by the Company of
€1,614,885 (31 May 2024: €1,476,970) within 12 months of the date of
approval of the financial statements, unless the Company has sufficient funds
to repay same.
Convertible Loan
On 26 May 2023, the Company entered into a convertible loan note agreement for
a total amount of €129,550 (£112,500) with Conroy Gold and Natural
Resources P.L.C. which is both a shareholder in the company and has a number
of other connections as noted in Note 14. The convertible loan note is
unsecured, has a term of 18 months and attracts interest at a rate of 5% per
annum which is payable on the maturity or conversion of the convertible loan.
The conversion price is at a price of 5 pence per ordinary share. The
shareholder has the right to seek conversion of the principal amount
outstanding on the convertible loan note and all interest accrued at any time
during the term.
€10,304 was recorded as a derivative liability attached to the total
convertible loan note above and the net amount of €119,246 was initially
recorded as the value of the convertible loan at 31 May 2023. The loan
incurred interest of €6,480 in the current year (31 May 2024: €6,476). The
convertible term has passed but the loan continues place on an informal basis
on the same terms and is classified as a current liability for the year ended
31 May 2025. The Company is in discussions to extend
the term of the loan note.
31 May 2025 31 May 2024
€ €
Opening balance 125,722 119,246
Interest payable 6,480 6,476
Closing balance 132,202 125,722
12 Called up share capital
and share premium
Authorised: 31 May 2025 31 May 2024
€ €
7,301,310,041 consolidated ordinary shares of €0.00025 each 1,825,328 1,825,328
317,785,034 deferred shares of €0.00999 each 3,174,672 3,174,672
5,000,000 5,000,000
The deferred shares do not entitle the holder to receive a dividend or other
distribution. Furthermore, the deferred shares do not entitle the shareholder
to receive notice of or vote at any general meeting of the Company, and do not
entitle the shareholder to any proceeds on a return of capital or winding up
of the Company.
Issued and fully paid – Current financial year
Number of ordinary shares Called up share capital € Called up deferred share capital € Share premium €
Start of financial year – consolidated ordinary shares of €0.00025 each 105,092,749 28,860 3,174,672 10,736,889
Share issue (a) 23,599,995 5,900 - 411,232
Share issue (b) 43,076,667 10,769 - 378,189
Share issue costs - - - (126,482)
End of financial year 171,769,411 45,529 3,174,672 11,399,828
Issued and fully
paid – Prior financial year
Number of ordinary shares Called up share capital € Called up deferred share capital € Share premium €
Start of financial year –shares of €0.00025 each 94,492,749 26,210 3,174,672 10,546,844
Share issue (c) 10,600,000 2,650 - 298,555
Share issue costs - - - (108,510)
End of financial year 105,092,749 28,860 3,174,672 10,736,889
(a) On 1 July 2024 the Company raised
€417,132 (£354,000) before share issue costs through the issue of
23,599,995 consolidated ordinary shares of €0.00025 in the capital of the
Company at a price of £0.015 per Subscription Share.
The company incurred share issue costs of a total of €35,901 with €20,919
being the fair value as at date of grant of warrants issued as part of the
terms attaching to the share issue (see Note 15) and the remainder being
broker costs of €14,982.
(b) On 20 February 2025 the Company raised
€388,958 (£323,075) before share issue costs through the issue of
43,076,667 consolidated ordinary shares of €0.00025 in the capital of the
Company at a price of £0.0075 per Subscription Share.
The company incurred share issue costs of €90,581 with €73,592 being the
fair value as at date of grant of warrants issued as part of the terms
attaching to the share issue (see Note 15) and the remainder being broker
costs of €16,989.
(c) On 11 October 2023, warrants were exercised
to acquire 600,000 consolidated ordinary shares of €0.00025 in the capital
of the Company at price of £0.025 per Subscription Share.
On 19 October 2023, the Company raised €301,205 (£250,000) before share
issue costs through the issue of 10,000,000 consolidated ordinary shares of
€0.00025 in the capital of the Company at a price of £0.025 per
Subscription Share. The company incurred share issue
costs of €108,510 being the fair value as at date of grant of warrants
issued as part of the terms attaching to the share issue (see Note 15).
Warrants: At 31 May 2025, warrants over 54,876,664 shares
exercisable at prices varying from £0.015 to £0.03 at any time up to 28
February 2027 were outstanding. All warrants in issue at that date had been
issued during the current financial year (31 May 2024: 27,900,000 warrants
were in issue, all of which lapsed unexercised during the year).
Share price: The share price at 31 May 2025 was £0.00585
(31 May 2024: £0.027). The share price ranged from £0.0274 to £0.00585 (31
May 2024: £0.0205 to £0.0515) during the year under review.
13 Commitments and
contingencies
At 31 May 2025, there were no capital commitments or contingent
liabilities (31 May 2024: €Nil) recognised at the balance sheet
date. Should the Company decide to further develop the Lahtojoki project, an
amount of €40,000 is payable by the Company to the vendors of the Lahtojoki
mining concession.
14 Related party
transactions
(a) The Company shares office
accommodation with Conroy Gold and Natural Resources P.L.C. which has certain
common Directors and shareholders. For the financial year ended 31 May 2025,
Conroy Gold and Natural Resources P.L.C. incurred costs totalling €62,508
(31 May 2024: €115,048) on behalf of the Company. These costs were recharged
to the Company by Conroy Gold and Natural Resources P.L.C. net of the shared
costs of a consultants report in Northern Ireland.
These costs are analysed as follows:
2025 2024
€ €
Salaries 52,811 71,738
Rent and rates - 13,310
Shared consultancy costs (20,628) -
Other operating expenses 30,325 30,000
62,508 115,048
(b) At 31 May 2025, the Company owed €75,065 to Conroy
Gold and Natural Resources P.L.C. (31 May 2024: €144,551 owed to). Amounts
owed to Conroy Gold and Natural Resources P.L.C. were included within trade
and other payables during the current year. During the financial year ended 31
May 2025, the Company paid €129,495 to (31 May
2024: €23,007 was received from) Conroy Gold and Natural Resources P.L.C.
as part of the cost sharing arrangement.
During the financial year ended 31 May 2025, the Company was charged
€62,508 (31 May 2024: €115,048) by Conroy Gold and Natural Resources
P.L.C. in respect of the allocation of certain costs as detailed in Note
14(a). In May 2023, Conroy Gold and Natural Resources P.L.C. converted amounts
owing to it equivalent to €143,943 (£125,000) into ordinary equity as
detailed as part of the “share issue (c)” detailed in Note 12 and a
further €129,550 (£112,500) into a convertible loan instrument as detailed
in Note 14.
(c) Key management personnel are considered to be the
Directors and other key management. The compensation of
all key management personnel during the year was €162,083 (2023: €148,250)
including an amount of €25,000 (31 May 2024: €33,250) payable to the
Company Secretary Cathal Jones in respect of services provided.
Further analysis of remuneration for each Director of the Company is
set out in note 2.
(d) Details of share capital transactions with the
Directors are disclosed in the Directors’ Report.
(e) Apart from Directors’ remuneration (detailed in Note
2 and Note 4), a convertible loan from a shareholder (which is detailed in
Note 11) and share capital transactions (which are detailed within the
Directors’ Report), there have been no contracts or arrangements entered
into during the financial year in which a Director of the Company had a
material interest.
15 Share-based payments
Warrants granted by the company generally have a vesting period ranging from
one to two years. Details of the warrants outstanding during the financial
year are as follows:
2025 2025 2024 2024
No. of Share Warrants Weighted Average Exercise Price € No. of Share Warrants Weighted Average Exercise Price €
At 1 June 27,900,000 0.04871 34,750,000 0.05963
Granted during the financial year 54,876,664 0.02217 10,000,000 0.05882
Lapsed during the financial year (27,900,000) 0.04871 (16,250,000) 0.09412
Exercised during the financial year - - (600,000) 0.02353
At 31 May 54,876,664 0.02217 27,900,000 0.04871
The company issued 11,799,997 sterling based warrants on 1 July 2024, with an
estimated fair value at date of grant of €20,919. The company also issued
43,076,667 sterling based warrants on 20 February 2025, with an estimated fair
value at date of grant of €73,593. Both of these
issues were in conjunction with the issue of ordinary shares as part of a
financing. The fair value of the warrants at the date of
grant were deducted from share premium as a direct share issue cost (see Note
12). As a result of the valuation performed at year end,
the fair value of the sterling based warrants was €32,880 at 31 May 2025 (31
May 2024: €30,106) and accordingly €91,738 (31 May 2024: 187,628) was
credited to the Statement of profit or loss as a movement in the fair value of
warrants.
The Company estimated the fair value of warrants awards using the Black
Scholes Model. The determination of the fair value of share-based payment
awards on the date of grant and on revaluation at each year end using the
Black Scholes Model is affected by Karelian Diamond Resources P.L.C. stock
price, share price volatility as well as assumptions regarding a number of
subjective variables. These variables include the expected term of the awards,
the stock price volatility, the risk-free interest rate and the expected
dividends.
The following key input assumptions were used to calculate the fair value of
the sterling based warrants at the balance sheet dates and date of issue
during the year:
31 May 2025 Date of issue 31 May 2024
Warrants Warrants Warrants
Dividend yield 0% 0% 0%
Share price volatility 85.106% 66.395% 65.956%
Risk free interest rate 3.88101% 4.183% 5.1582%
Expected life (in years) 0.0833 / 1.75 1.0 / 2.0 0.5
During the prior year, the company issued 10,000,000 sterling
based warrants in conjunction with the issue of ordinary shares as part of a
financing and an amount of €108,510 was deducted from share premium as a
direct issue cost (being the fair value of these warrants at date of grant).
16 Financial instruments
Financial risk management objectives, policies and processes
The Company has exposure to the following risks from its use of financial
instruments:
(a) Inflation;
(b) Interest rate risk;
(c) Foreign currency risk;
(d) Liquidity risk; and
(e) Credit risk.
The Board of Directors has overall responsibility for the establishment and
oversight of the Company’s risk management framework.
The Company’s risk management policies are established to identify and
analyse the risks faced by the Company, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to reflect changes
in market conditions and the Company’s activities.
The Company’s Audit Committee oversees how management monitors compliance
with the Company’s risk management policies and procedures and framework in
relation to the risks faced.
(a) Inflation
The Company is exposed to the risk associated with inflation such
as the impact of increased operating expenses including rent, light & heat and
wages and salaries. The Chairman and Managing Director monitor costs on an
ongoing basis.
(b) Interest rate risk
The Company currently finances its operations through shareholders’ funds
and loan finance. The loan finance at 31 May 2025 and 31 May 2024 relates to a
convertible loan therefore any fluctuations in interest rates will not have an
impact on the results of the Company and no sensitivity analysis has been
performed. The Company did not enter into any hedging transactions with
respect to interest rate risk.
(c)
Foreign currency risk
The Company is exposed to currency risk on purchases, loans and bank deposits
that are denominated in a currency other than the functional currency of the
Company. The Company is further exposed to foreign currency risk through the
warrants denominated in sterling which is not the Company’s functional
currency.
It is the Company’s policy to ensure that foreign currency risk is managed
wherever possible by matching foreign currency income and expenditure. During
the years ended 31 May 2025 and 31 May 2024, the Company did not utilise
foreign currency forward contracts or other derivatives to manage foreign
currency risk.
The Company’s foreign currency risk exposure in respect of the principal
foreign currencies in which the Company operates was as follows at 31 May
2025:
Sterling exposure Euro exposure Total
denominated in € € €
Cash and cash equivalents (9) 40,871 40,862
Derivative liability (10,304) - (10,304)
Convertible Loan (132,202) - (132,202)
Trade and other payables - (2,071,296) (2,071,296)
Other prepayments - 40,707 40,707
VAT/PAYE receivable - 52,282 52,282
Amount due to Conroy Gold and Natural Resources plc - (75,065) (75,065)
Total exposure (142,515) (2,012,501) (2,155,016)
The Company’s foreign currency risk exposure in respect of the principal
foreign currencies in which the Company operates was as follows at 31 May
2024:
Sterling exposure Euro exposure Total
denominated in € € €
Cash and cash equivalents 525 39,017 39,542
Derivative liability (10,304) - (10,304)
Convertible loan (125,722) - (125,722)
Trade and other payables - (1,759,050) (1,759,050)
Other prepayments - 30,082 30,082
VAT/PAYE receivable - 51,469 51,469
Amount due to Conroy Gold and Natural Resources plc - (144,551) (144,551)
Total exposure (135,501) (1,783,033) (1,918,534)
The following are the significant exchange rates that applied against €1
during the financial year:
Average Rate 2025 Average Rate 2024 Spot Rate 31 May 2025 Spot Rate 31 May 2024
GBP 0.840 0.860 0.841 0.851
Sensitivity analysis
A 10% strengthening of the Euro against Sterling, based on outstanding
financial assets and liabilities at 31 May 2025 would have decreased the
reported loss by €14,251 (31 May 2024: €13,550) as a consequence of the
retranslation of foreign currency denominated financial assets at those dates.
A weakening of 10% of the Euro against Sterling would have had an equal and
opposite effect. It is assumed that all other
variables, especially interest rates, remain constant in the analysis.
(d) Liquidity
risk
Liquidity risk is the risk that the Company will not be able to meet its
financial obligations as they fall due. The Company’s approach to managing
liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and
adverse conditions, without incurring unacceptable losses or risking damage to
the Company’s reputation. The Company manages liquidity risk by regularly
monitoring cash flow projections. The nature of the Company’s exploration
and appraisal activities can result in significant differences between
expected and actual cash flows. Contractual maturities of financial
liabilities as at 31 May 2025 were as follows:
Carrying amount € Contractual cash flows € 6 months or less € 6-12 months € 1-2 years € 2-5 years €
Trade and other payables (including amounts owed to related party) 1,928,790 1,928,790 307,130* - 1,621,660** -
Convertible loan 142,506 142,506 142,506*** - - -
2,071,296 2,071,296 449,636 - 1,621,660 -
Contractual maturities of financial liabilities as at 31 May 2024
were as follows:
Carrying amount € Contractual cash flows € 6 months or less € 6-12 months € 1-2 years € 2-5 years €
Trade and other payables (including amounts owed to related party) 1,903,601 1,903,601 426,631* - 1,476,970** -
Convertible loan 136,026 136,026 136,026*** - - -
2,039,627 2,039,627 562,657 - 1,476,970** -
*The amount of €307,130 (31 May 2024: €426,631) relates to other creditors
and accruals (including amounts owed to Conroy Gold and Natural Resources
P.L.C.).
**The Directors, Maureen T.A. Jones, Dr. Sorċa Conroy, Howard Bird and
Brendan McMorrow, and former Directors, Séamus P. FitzPatrick James P. Jones
and the Estate of Professor Richard Conroy, have confirmed that they will not
seek repayment of amounts owed to them by the Company of €1,621,660
(31 May 2024: €1,476,970) within 12 months of the date of
approval of the financial statements, unless the Company has sufficient funds
to repay. There were no related party loans in existence at 31 May 2025 and 31
May 2024 relating to monies owed to any of the Directors.
***On 26 May 2023, the Company has entered into a convertible loan note
agreement for a total amount of €129,550 (£112,500) with one of its
shareholders. Please refer to Note 11 for further details.
The contractual cash amount owing at 31 May 2025 of €142,506 is
reflected in the balance sheet of the Company split between a loan and an
embedded derivative liability.
The Company had cash and cash equivalents of €40,862 at 31 May 2025 (31 May
2024: €39,597).
(e) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a
financial loss for the other party by failing to discharge its obligation.
Credit risk is the risk of financial loss to the Company if a cash deposit is
not recovered. Company deposits are placed only with banks with appropriate
credit ratings. The carrying amount of financial
assets represents the maximum credit exposure. The maximum exposure to credit
risk was as follows:
2025 2024
€ €
Cash and cash equivalents 40,862 39,597
Other receivables 40,707 30,082
81,569 69,679
The Company’s cash and cash equivalents are held at AIB Bank which has a
credit rating of “BBB” (31 May 2024: ‘’BBB’’) as determined by
Standard & Poor’s Credit Rating.
Expected credit loss
The Company measures credit risk and expected credit losses on financial
assets measured at amortised cost using probability of default, exposure at
default and loss given default. Management consider both historical analysis
and forward-looking information in determining any expected credit loss. At 31
May 2025 and 31 May 2024, all cash is accessible on demand and held with
counterparties with a credit rating of BBB or higher. Having considered the
credit rating of the counterparties and the outstanding balances, management
have determined that for both financial years presented, the amount of ECL is
immaterial.
(f) Fair values versus carrying
amounts
Due to the short-term nature of the majority of the Company’s financial
assets and liabilities held at amortised cost at 31 May 2025 and 31 May 2024,
the fair value equals the carrying amount in each case. The
carrying value of non-current financial assets and liabilities is a reasonable
approximation of fair value.
(g) Capital management
The principal activities of the Company are concentrating particularly on
diamond exploration and evaluation.
The Company has historically funded its activities through share issues and
placings and loans. The Company’s capital structure is kept under review by
the Board of Directors and it is committed to capital discipline and continues
to maintain flexibility for future growth.
The capital structure of the Company consists of equity of the Company (refer
to the statement of changes in equity and Note 12). The Company is not subject
to any externally imposed capital requirements.
17 Post balance sheet
events
The Company announced on 10 th June 2025 that the mining
concession had been registered by the Finnish National Land Survey into the
land registry. This decision facilitated the
registration by the Finnish Safety and Chemical Agency (TUKES) of the mining
rights for Lahtojoki, with registration number K7363. The mining concession
certificate received from TUKES entitles the Company to utilise the minerals
within the mining concession and the Company is now planning to proceed to the
next stage of work on the mining concession area.
The Company announced on 17 th June 2025 that a promising
new copper target had been identified around the Cappagh Copper Mine (an old
copper mine where limited mining had been carried out historically).
Initial desk-based studies and reconnaissance work have
highlighted this a promising new target for the Company's exploration with
further investigation and detailed exploration programmes now being planned to
fully assess the potential of the Cappagh Copper Mine and the adjacent area.
The Company also raised funds of €217,239 (£185,000) on 20th June 2025 with
a view to carrying out follow up exploration in Northern Ireland and to
continue its ongoing work in Finland.
There were no further material events to note post year end.
18
Approval of the financial statements for the financial year ended 31 May 2025
The financial statements were approved by the Board of Directors on 25
November 2025 and authorised for issue on 25 November 2025. A copy of the
audited financial statements will be available on the Company’s website
www.kareliandiamondresources.com
and will be available from the Company’s registered office at
Shannon Airport House, Shannon Free Zone, Shannon, Co. Clare, V14E370 Ireland.
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