The information contained within this
announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulation
(“MAR”). Upon publication of this announcement via a
Regulatory Information Service (“RIS”), this inside information is
now considered to be in the public domain.
27 February 2017
Karelian Diamond Resources
plc
(“Karelian” or “the Company”)
Half-yearly
results for the six months ended 30 November
2016
Karelian Diamond Resources plc (AIM: KDR; ESM: KDR.I), the
diamond exploration company focused on Finland, announces its results for the six
months ended 30 November 2016.
Highlights of the Half-year:
- Your Company’s exploration programme led to the discovery of
a diamond in a till sample. This very rare discovery was
highly significant not only in itself but also because it was
allied with the discovery of high concentrations of Kimberlite
Indicator Minerals (“KIMs”). These high concentrations of
KIMs suggest that a diamondiferous kimberlite body may be present
in the area which could be the source of the diamond
discovery.
- Lahtojoki diamond deposit - Exploration carried out suggests
that in addition to the Lahtojoki deposit there may be further
diamond resource potential in the immediate area, six kimberlite
boulders found.
- Riihivaarä - Analysis of the indicator minerals suggests
that the kimberlite body is likely to be diamondiferous.
Commenting, Chairman, Professor
Richard Conroy said:
“The discovery of a diamond is
tremendously exciting and is a huge step forward in your Company’s
diamond exploration programme.”
For further information please contact:
Karelian Diamond
Resources plc |
Tel:
+353-1-661-8958 |
Professor Richard
Conroy, Chairman |
|
Allenby Capital
Limited (Nomad) |
Tel:
+44-20-3328-5656 |
Virginia Bull /
James Thomas / Nick
Harriss, |
|
Beaufort
Securities Plc (Broker) |
Tel:
+44-20-7382-8300 |
Jon Bellis / Elliot
Hance |
|
IBI Corporate
Finance Limited (ESM Adviser) |
Tel:
+353-766-234-800 |
Ger Heffernan/Jan
Fitzell |
|
Lothbury
Financial Services Limited |
Tel:
+44-20-3290-0707 |
Michael
Padley |
|
Hall
Communications |
Tel: +353-1-660-9377 |
Don Hall |
|
Visit the website at:
www.kareliandiamondresources.com
CHAIRMAN’S
STATEMENT
Dear Shareholder,
I have great pleasure in presenting your Company’s Half-Yearly
Report for the six months ended 30 November 2016. The
discovery of a diamond in a till sample from the Kuhmo region of
eastern Finland was the highlight
of the results of your Company’s diamond exploration programme in
Finland over the half-year.
Such an occurrence is an extremely rare event and is a major step
forward in your Company’s exploration programme.
Diamond Discovery
In January, following analysis, we announced the discovery of a
diamond in samples from the Kuhmo region of Eastern Finland. The diamond is described by
Dr Kinnunen of the Geological Survey of Finland (“GTK”) as an excellent diamond; 0.8mm
in diameter, forming a 12 sided, curved and twinned dodecahedron.
It is a sparkling clear crystal with clean faces. The colour is
greenish.
The diamond discovery, a very rare and tremendously exciting
discovery, was highly significant not only in itself but also
because it was allied with the discovery of high concentrations of
Kimberlite Indicator Minerals (“KIMs”). These high concentrations
of KIMs suggest that a diamondiferous kimberlite body may be
present in the area which could be the source of the diamond
discovery.
The KIMs reported included 13 purple to red peridotitic garnets
(G9/10 Cr-pyrope), 3 orange mantle garnets, 2 Cr-diopside and 178
chromite grains in the 0.25 to 0.5 mm size range, plus 1 purple to
red peridotitic garnet (G9/10 Cr-pyrope) and 6 chromite grains in
the 0.5 to 1.0 mm size range. G9 and G10 garnets are important
because they tend to be formed at similar temperatures and
pressures to diamonds.
ODM Laboratory, the diamond laboratory which processed the
sample, contributed to many of the major Canadian discoveries in
the 1990’s and early 2000’s. It recovered less than 10 such
naturally occurring diamonds during the processing and logging of
more than 50,000 exploration till samples during that period, which
indicates the rarity of the discovery.
In Eastern Finland your
Company, in addition to its diamond discovery, has also previously
discovered a kimberlite body, at Riihivaara, which it is following
up and, at Seitaperä, demonstrated the largest diamondiferous
kimberlite body yet reported in Finland.
Diamond Mining Development Programme
at Lahtojoki
Your Company last year acquired the Lahtojoki diamond deposit in
the Kuopio-Kaavi region of Finland
together with a Mining Permit for the deposit. During the half year
your Company has been analysing, reviewing and updating the
relevant technical and financial data relating to the deposit.
During the exploration carried out during the half year by your
Company a further six Kimberlite boulders were discovered
suggesting that in addition to the Lahtojoki deposit there may be
further diamond resource potential in the immediate area.
The Karelian Craton in Finland,
which is your Company’s primary exploration area, is comparable in
size to the diamond rich Slave Lake Craton in Canada. In the Russian sector of the Karelian
Craton two world class diamond deposits, Lomonosova and the Grib
Pipe, have been discovered and are now in production. Your Company
believes that the Finnish sector of the Craton also has the
potential to host economic diamond deposits.
The discovery of a diamond in a till sample collected during the
half-year gives great encouragement to your Company’s diamond
exploration programme in Finland.
Agreement with Rio Tinto Mining and
Exploration
Your Company has an agreement with Rio Tinto Mining and
Exploration (“Rio Tinto”).
Under the agreement, Rio Tinto discloses to Karelian
confidential information and physical geological samples related to
exploration in Finland for the
purpose of the Company considering that information in relation to
its potential and existing 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 51 percent interest in any project identified by
Karelian in Finland by Rio Tinto
paying the direct cash expenditures incurred in developing the
project, subject to the following conditions:
-
For diamond projects the option will be triggered if Karelian
completes 10 tonnes or more of bulk sampling for diamond
exploration; and
-
For all other minerals the option will be triggered if Karelian
discovers a resource with an in situ value that is equal to or
greater than the in situ value of 3 million ounces of gold in a
JORC compliant resource calculation.
Finance
The loss after taxation for the half-year ended 30 November 2016 was €117,067 (2015 loss of
€109,813) and the net assets as at 30
November 2016 were € 8,370,091 (2015: €8,249,640).
Subsequent to the period end the Company raised £425,000
(€505,000) before expenses on 21 December
2016 to fund the advancement of the Company’s principal
diamond opportunities.
Directors and Staff
I would like to thank my fellow directors, staff and consultants
for their support and dedication, which has enabled the continued
success of your Company.
Outlook
The discovery of a diamond is a striking success on which we
look to build as we move forward with your Company’s diamond
exploration and development programme in Finland
Yours faithfully,
Professor Richard Conroy
Chairman
27February 2017
INCOME STATEMENT
FOR HALF-YEAR ENDED 30 NOVEMBER 2016
|
Six months
ended |
Six months ended |
Year ended |
|
30
November |
30 November |
31 May |
|
2016 |
2015 |
2016 |
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
€ |
€ |
€ |
|
|
|
|
OPERATING EXPENSES |
(117,067) |
(109,942) |
(258,904) |
|
|
|
|
Finance income – bank interest
receivable |
- |
129 |
170 |
|
|
|
|
Finance costs – interest on
shareholder loan |
- |
- |
- |
|
|
|
|
LOSS BEFORE TAXATION |
(117,067) |
(109,813) |
(258,734) |
|
|
|
|
Taxation |
- |
- |
- |
|
|
|
|
LOSS FOR THE YEAR |
(117,067) |
(109,813) |
(258,734) |
|
|
|
|
Loss per ordinary share – basic and
diluted |
(€0.0004) |
(€0.0004) |
(€0.0008) |
STATEMENT OF COMPREHENSIVE
INCOME
FOR HALF-YEAR ENDED 30 NOVEMBER 2016
|
Six months
ended |
Six months ended |
Year ended |
|
30
November |
30 November |
31 May |
|
2016 |
2015 |
2016 |
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
€ |
€ |
€ |
LOSS FOR PERIOD |
(117,067) |
(109,813) |
(258,734) |
|
|
|
|
Total income and expense recognised
in other comprehensive income |
- |
- |
- |
|
|
|
|
TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD – ENTIRELY ATTRIBUTABLE TO
EQUITYHOLDERS |
(117,067) |
(109,813) |
(258,734) |
|
|
|
|
STATEMENT OF FINANCIAL
POSITION
AS AT 30
NOVEMBER 2016
|
30
November |
30 November |
31 May |
|
2016 |
2015 |
2016 |
|
(Unaudited) |
(Unaudited) |
(Audited) |
ASSETS |
€ |
€ |
€ |
Non-current Assets |
|
|
|
Intangible assets |
9,014,182 |
8,298,968 |
8,712,953 |
Investment in Subsidiary |
4 |
4 |
4 |
Property, plant and equipment |
- |
- |
- |
|
|
|
|
|
9,014,186 |
8,298,972 |
8,712,957 |
Current Assets |
|
|
|
Trade and other receivables |
161,503 |
508,676 |
211,368 |
Cash and cash equivalents |
49,224 |
69,122 |
341,737 |
|
|
|
|
|
210,727 |
577,798 |
553,105 |
|
|
|
|
Total Assets |
9,224,913 |
8,876,770 |
9,266,062 |
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
Capital and Reserves |
|
|
|
Called up share capital |
3,177,850 |
2,865,350 |
3,177,850 |
Share premium |
6,791,581 |
6,786,177 |
6,791,581 |
Share based payments reserve |
681,312 |
596,736 |
665,127 |
Retained losses |
(2,280,652) |
(1,998,623) |
(2,163,585) |
|
|
|
|
Total Equity |
8,370,091 |
8,249,640 |
8,470,973 |
|
|
|
|
Non-current Liabilities |
|
|
|
Financial Liabilities |
309,589 |
309,589 |
309,589 |
|
|
|
|
Total Non-current
Liabilities |
309,589 |
309,589 |
309,589 |
|
|
|
|
Current Liabilities |
|
|
|
Trade and other payables |
545,233 |
317,542 |
485,500 |
|
|
|
|
Total Current
Liabilities |
545,233 |
317,542 |
485,500 |
|
|
|
|
Total Liabilities |
854,822 |
627,130 |
795,089 |
|
|
|
|
Total Equity and
Liabilities |
9,224,913 |
8,876,770 |
9,266,062 |
STATEMENT OF CHANGES IN
EQUITY
FOR THE HALF-YEAR ENDED 30 NOVEMBER 2016
|
|
|
Share-based |
Retained |
|
|
Share |
Share |
Payment |
Earnings |
Total |
|
Capital |
Premium |
Reserve |
(Deficit) |
Equity |
|
€ |
€ |
€ |
€ |
€ |
|
|
|
|
|
|
At 1 June 2016 |
3,177,850 |
6,791,581 |
665,127 |
(2,163,585) |
8,470,973 |
Share-based payments |
- |
- |
16,185 |
- |
16,185 |
Loss for the period |
- |
- |
- |
(117,067) |
(117,067) |
|
|
|
|
|
|
At 30 November
2016 |
3,177,850 |
6,791,581 |
681,312 |
(2,280,652) |
8,370,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based |
Retained |
|
|
Share |
Share |
Payment |
Earnings |
Total |
|
Capital |
Premium |
Reserve |
(Deficit) |
Equity |
|
€ |
€ |
€ |
€ |
€ |
|
|
|
|
|
|
At 1 June 2015 |
2,865,350 |
6,786,177 |
570,256 |
(1,891,710) |
8,330,073 |
Share-based payments |
- |
- |
26,480 |
- |
26,480 |
Loss for the period |
- |
- |
- |
(106,913) |
(106,913) |
|
|
|
|
|
|
At 30 November
2015 |
2,865,350 |
6,786,177 |
596,736 |
(1,998,623) |
8,249,640 |
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW STATEMENT
FOR THE HALF-YEAR ENDED 30 NOVEMBER 2016
|
Six months
ended |
Six months ended |
Year ended |
|
30
November |
30 November |
31 May |
|
2016 |
2015 |
2016 |
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
€ |
€ |
€ |
|
|
|
|
Cash flows from operating
activities |
|
|
|
Cash (used in)/generated by
operations |
(4,569) |
(156,665) |
170,029 |
Tax paid |
- |
- |
- |
|
|
|
|
Net cash (used
in)/generated by operating activities |
(4,569) |
(156,665) |
170,029 |
|
|
|
|
Cash flows from investing
activities |
|
|
|
Investment in exploration and
evaluation |
(287,944) |
(248,368) |
(607,251) |
|
|
|
|
|
|
|
|
Net cash used in investing
activities |
(287,944) |
(248,368) |
(607,251) |
|
|
|
|
Cash flows from financing
activities |
|
|
|
Issue of share capital (net of
expenses) |
- |
- |
317,904 |
Repayment of shareholder loan |
- |
- |
(13,141) |
Bank interest received |
- |
129 |
170 |
|
|
|
|
|
|
|
|
Net cash generated from financing
activities |
- |
129 |
304,933 |
|
|
|
|
Decrease in cash and cash
equivalents |
(292,513) |
(404,904) |
(132,289) |
Cash and cash equivalents at
beginning of period |
341,737 |
474,026 |
474,026 |
|
|
|
|
Cash and cash equivalents at end
of period |
49,224 |
69,122 |
341,737 |
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE HALF-YEAR ENDED 30 NOVEMBER 2016
1. Basis of preparation
The half-yearly financial statements have been prepared on the
basis of the recognition and measurement requirements of
International Financial Reporting Standards (IFRS) as adopted by
the European Union (EU), and their interpretations adopted by the
International Accounting Standards Board (IASB). The accounting
policies used in the preparation of the half-yearly financial
information are the same as those used in the Company’s audited
financial statements for the year ended 31 May 2016.
The half-yearly financial statements do not include all of the
information required for full annual financial statements and
should be read in conjunction with the audited financial statements
of the Company for the year ended 31 May
2016, which are available on the Company's website
www.kareliandiamondresources.com. The auditor's report on
those financial statements was unqualified and contained emphasis
of matter paragraphs relating to the preparation of the accounts on
the going concern basis and the recoverability of intangible
assets.
2. Earnings per share
The calculation of the loss per ordinary share of €0.0004 (2015:
loss €0.0004) is based on the loss for the financial period of
€117,067 (2015: loss €109,813) and the weighted average number of
ordinary shares in issue during the period of 317,785,034 (2015:
286,535,034).
Since the Company incurred a loss the effect of share options
and warrants would be anti-dilutive.
3. Dividends
No dividends were paid or are proposed in respect of the
half-year ended 30 November 2016.
4. Copy of half-yearly report
A copy of the half- yearly report will be available on the
Company’s website www.kareliandiamondresources.com and will
be available from the Company's registered office, 9 Merrion Square
North, Dublin 2.