24 February 2014 Karelian Diamond Resources plc ("Karelian" or "the Company") Half-yearly results for the six months ended 30 November 2013 SIGNIFICANT PROGRESS MADEKarelian Diamond Resources plc (AIM: KDR; ESM: KDR.I), the diamond explorationcompany focused on Finland, announces its results for the six months ended 30November 2013; a period in which the Company made excellent progress in thefield and has also successfully raised funds, post the period end, to furtheradvance the work.Highlights: * Diamondiferous Kimberlite indicator minerals found at Riihivaara target * Exploration Claims lodged at Riihivaara * Recent drilling at Seitaperä subsequently confirmed as diamondiferous * Following review of Rio Tinto database further licences applied for in other regionsPost Period * Diamondiferous Kimberlite indicator minerals found in Kuusamo area * Applications granted for exploration claim reservations in area * £2 million raised * £469,875 of debt capitalisedProfessor Richard Conroy, Chairman, commented:"We have successfully expanded our licence areas and the results from theongoing programmes continue to be very encouraging, with important newdiscoveries made. The additional funding will allow us to accelerate theexploration as we endeavour to maximise the potential of the area".Further Information:Professor Richard Conroy, ChairmanKarelian Diamond Resources plc Tel: +353-1-661-8958Simon Clements/Virginia BullSanlam Securities UK Limited (Nomad) Tel: +44-20-7628-2200Jon Belliss/Abigail WayneHume Capital Securities PLC (Broker) Tel: +44-20-3693-1470Ger HeffernanIBI Corporate Finance Limited (ESM Adviser) Tel: +353-766-234-800Michael Padley/Michael SpriggsLothbury Financial Services Tel: +44-20-7868-2567Don HallHall Communications Tel: +353-1-660-9377Visit the website at: www.kareliandiamondresources.com CHAIRMAN'S STATEMENTDear Shareholder,I have great pleasure in presenting your Company's Interim Report for the sixmonths ended 30 November 2013, a period of positive and exciting progress foryour Company's diamond exploration programme in the Karelian Craton in Finland.The Karelian Craton, which extends across Finland and northwest Russia, iscomparable in size to the diamond rich Slave Lake Craton in Canada. Two worldclass diamond deposits, Lomonosova and the Grib pipe, have been discovered inthe Russian sector of the Karelian Craton. Alrosa, the Russian company which isthe world's largest diamond miner, has indicated that this new diamond regionwill represent almost all of its future growth.Your Company's objective is to find world class diamond deposits on the Finnishside of the craton comparable to the world class diamond deposits discovered inthe Russian sector of the craton.Following successful fund raisings since the period end, your Company is in itsstrongest financial position in its history and the management team can focuson accelerating the diamond exploration programme in the Karelian Craton and onmaximising the benefit of the Company's agreement with Rio Tinto Mining andExploration ("Rio Tinto").Diamond Exploration ProgrammeYour Company's exploration programme has continued to make excellent progress.The potentially diamond bearing mantle xenolith at Seitaperä near Kuhmo wasconfirmed as diamondiferous by the recovery of microdiamonds. Two of themicrodiamonds were greater than 60 per cent broken, indicating the possibilityof larger stone sizes. At 6.9 hectares Seitaperä is the largest knownkimberlite in Finland.A till sampling programme at Riihivaara resulted in the discovery of G9 and G10diamondiferous indicator minerals - so called because they are formed withinthe ultramafic rocks underlying the earth's crust at the same temperatures andpressures as diamonds. G3 and G4 garnets were also found, suggesting thepresence of eclogitic mantle material which is significant, as it tends to beassociated with higher grade diamonds.The Riihivaara claim reservation lies approximately 10 kilometres southeast ofthe Company's Seitaperä kimberlite target.The data made available to Karelian under its agreement with Rio Tinto iscontinuing to be evaluated and integrated with your Company's exploration dataand this is proving very useful both in identifying new targets and inconfirming existing work and analysis.At Kuusamo, which is located in the North-east of Finland just south of theArctic Circle and is bordered to the East by Russia, the interrogation ofairborne geophysics by your Company together with till sampling and integrationof data made available to Karelian under its agreement with Rio Tinto led tothe decision, in October 2013, to apply for claim reservations in the area.Agreement with Rio Tinto Mining & ExplorationUnder the agreement, Rio Tinto discloses to Karelian confidential informationand physical geological samples relating to exploration in Finland for thepurpose of the Company considering that information in relation to itspotential 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 payingthe direct cash expenditures incurred in developing the project, subject to thefollowing 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.FinanceThe results for the six months ended 30 November 2013 are set out below. Theloss for the period was €96,610 (2012: loss €72,545). The net assets of theCompany at 30 November 2013 were €4,363,079 (2012: €4,491,981).Post November your Company raised £2,000,000 before expenses, through a placingof 111,666,666 Ordinary Shares of EUR0.01 in the capital of the Company. Inaddition, I have capitalised loans amounting to £469,875 by subscribing for31,325,000 Ordinary Shares in the capital of the Company.Directors and StaffI would like to thank my fellow directors, staff and consultants for theirsupport and dedication, which has enabled the continued success of the Company.OutlookI look forward with confidence to continued progress with your Company'sdiamond interests in Finland.Yours faithfully,Professor Richard ConroyChairman 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 - - -receivableFinance costs - interest on (7,487) (7,014) (14,351)shareholder loanLOSS 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 comprehensiveincomeTOTAL COMPREHENSIVE INCOME FOR THE (96,610) (72,545) (179,955)PERIOD - ENTIRELY ATTRIBUTABLE TOEQUITYHOLDERS STATEMENT OF FINANCIAL POSITION AS AT 30 NOVEMBER 2013 30 November 30 November 31 May 2013 2012 2013 (Unaudited) (Unaudited) (Audited)ASSETS € € €Non-current AssetsIntangible assets 7,068,402 6,581,906 6,801,539Investment in Subsidiary 4 4 4Property, plant and equipment 249 417 333 7,068,655 6,582,327 6,801,876Current AssetsTrade and other receivables 7,051 43,574 11,691Cash and cash equivalents 4,271 24,282 2,506 11,322 67,856 14,197Total Assets 7,079,977 6,650,183 6,816,073EQUITY AND LIABILITIESCapital and ReservesCalled up share capital 922,083 922,083 922,083Share premium 4,621,158 4,621,158 4,621,158Share based payments reserve 487,716 412,598 450,157Retained losses (1,667,878) (1,463,858) (1,571,268)Total Equity 4,363,079 4,491,981 4,422,130Non-current LiabilitiesFinancial Liabilities 1,212,404 1,107,283 1,171,968Total Non-current Liabilities 1,212,404 1,107,283 1,171,968Current LiabilitiesTrade and other payables 1,504,494 1,050,919 1,221,975Total Current Liabilities 1,504,494 1,050,919 1,221,975Total Liabilities 2,716,898 2,158,202 2,393,943Total 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) 4,422,130Share-based payments - - 37,559 - 37,559Loss 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) 4,526,967Share-based payments - - 37,559 - 37,559Loss 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 activitiesCash 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 activitiesCash flows from investing activitiesInvestment in exploration and (236,273) (160,544) (292,105)evaluationNet cash used in investing activities (236,273) (160,544) (292,105)Cash flows from financing activitiesIncrease in accrued directors' 121,162 121,162 242,325remunerationAdvances of shareholder loan 40,436 100,069 93,000Bank interest received - - -Interest paid on shareholder loan - - -Net cash generated from financing 161,598 221,231 335,325activitiesIncrease/(Decrease) in cash and cash 1,765 14,228 (7,548)equivalentsCash and cash equivalents at beginning 2,506 10,054 10,054of periodCash and cash equivalents at end of 4,271 24,282 2,506period NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 NOVEMBER 20131. Basis of preparationThe half-yearly financial statements have been prepared on the basis of therecognition and measurement requirements of International Financial ReportingStandards (IFRS) as adopted by the European Union (EU), and theirinterpretations adopted by the International Accounting Standards Board (IASB).The accounting policies used in the preparation of the half-yearly financialinformation are the same as those used in the Company's audited financialstatements for the year ended 31 May 2013.2. Earnings per shareThe 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) andthe weighted average number of ordinary shares in issue during the period of92,208,342 (2012: 92,208,342).Since the Company incurred a loss the effect of share options and warrantswould be anti-dilutive.3. DividendsNo dividends were paid or are proposed in respect of the period ended 30November 2013.4. Copy of half yearly reportA copy of the half yearly report will be available on the Company's websitewww.kareliandiamondresources.com and will be available from the Company'sregistered office, 10 Upper Pembroke Street, Dublin 2.