[Karelian]
29 February 2024
Karelian Diamond Resources plc
("Karelian" or "the Company")
Half-yearly results for the six months ended 30 November 2023
Karelian Diamond Resources plc (AIM: KDR), the diamond exploration company
focused on Finland , announces its unaudited results for the six months ended 30
November 2023. Details of these can be found below and a full copy of the
interim results statement can be viewed on the Company's website
(www.kareliandiamondresources.com). The period was one of steady progress,
particularly in working towards opening the first diamond mine.
Highlights of the half-year period included:
· The proceedings to establish the mining concession for the applied for area
at the Lahtojoki diamond deposit are now at an advanced stage.
· Mining concession at Lahtojoki is expected to be approved, now the last of
the compensation appeals are being finalised. This follows prior approvals by
TUKES, the Finnish mining authority.
· Exploration programme in the Kuhmo region of Finland continues to be highly
encouraging with results from basal till sampling suggesting that two of the
sample locations may be close to the source of the green diamond the Company
discovered.
· Work continues in Northern Ireland on the nickel, copper and platinum
mineralisation anomalies.
· Post Period: 3 year extension granted for Exploration Permit covering the
Riihivaara Kimberlite discovery and adjacent areas.
Professor Richard Conroy, Chairman of Karelian, said:
"We are very pleased with the Company's progress regarding the planned
development of the mine at the Lahtojoki diamond deposit, the work to find the
source of the green diamond and, post period, the extension of the exploration
permits which will allow the Company to continue its work on the emerging
kimberlite field at Kuhmo. Overall, it has been a very satisfactory period for
the exploration team."
Further Information:
Karelian Diamond Resources plc +353-1-479-6180
Professor Richard Conroy, Chairman
Allenby Capital Limited (Nomad) +44-20-3328-5656
Nick Athanas / Nick Harriss
Peterhouse Capital Limited (Broker) +44-20-7469-0930
Lucy Williams / Duncan Vasey
Lothbury Financial Services +44-20-3290-0707
Michael Padley
Hall Communications +353-1-660-9377
Don Hall
http://www.kareliandiamondresources.com
Chairman's Statement
Dear Shareholder,
I have great pleasure in presenting the Company's Half-Yearly Report and
condensed Financial Statements for the half year ended 30 November 2023.
The period was one of continued progress in relation to the development of the
Lahtojoki diamond deposit in the Kuopio-Kaavi region of Finland . The proceedings
to establish the mining concession are now at an advanced stage. A mining
concession application has already been approved by TUKES (the Finnish mining
authority). Following the order of TUKES, the National Land Survey has carried
out the process in relation to ground rental compensation for the local
landowners and is now finalising the appeals by two landowners regarding the
amount of compensation and the mine boundary.
Land possession for the duration of the mine is a major step forward in the
Company's proposed development of the Lahtojoki deposit. The diamond mining
project covers 71 hectares (c.176 acres) with the actual kimberlite pipe having
a surface area of 16 hectares (c.40 acres). The deposit, as well as containing
high quality colourless gem diamonds, contains pink diamonds which are highly
sought after and can command prices up to 20 times that of normal colourless gem
diamonds.
I believe the development of a diamond mine at Lahtojoki will not only bring
significant benefits to the Company, but also to the entire surrounding Kuopio
-Kaavi area and, when in production, is expected to be the first diamond mine in
Europe outside Russia .
The Company's exploration programme in the Kuhmo region of Finland continues to
be highly encouraging up-ice of the Company's discovery of a green diamond.
Results from the Company's basal till sampling suggest that two of the sample
locations may be close to the source of the green diamond.
The Company's nickel, copper and platinum mineralisation exploration project in
Northern Ireland also continues to be very encouraging.
Exercise of Warrants
During the period the Company received warrant exercise notices to subscribe for
a total of 600,000 new ordinary shares of nominal value €0.00025 each at an
exercise price of 2 pence per ordinary share, as announced by the Company on 11
October 2023.
Finance
During the period there was a fundraising of £250,000 (including £100,000 from
Board members) at 2.5 pence per ordinary share.
Following admission of these new ordinary shares, in relation to the fundraising
and exercised warrants, the Company had a total of 105,092,749 ordinary shares
in issue.
The loss after taxation for the half year ended 30 November 2023 was €136,351
(30 November 2022: loss of €168,786) and the net assets as at 30 November 2023
were €9,832,149 (30 November 2022: €9,312,017).
Directors and Staff
I would like to thank my fellow directors, staff and consultants for their
support and dedication, which has enabled the continued success of the Company.
Future Outlook
I look forward to the Company continuing to progress the planned development of
the Lahtojoki diamond deposit and also to further success with its diamond
exploration in Finland and the identification of a kimberlite pipe, as well as
to further positive results from the exploration programme for nickel, copper
and platinum group metals in Northern Ireland .
Yours faithfully,
Professor Richard Conroy
Chairman
28 February 2024
Condensed income statement
Note Six-month Six-month Year
period ended 31
period ended 30 May 2023
ended 30 November
November 2022 (Audited)
2023 €
(Unaudited)
(Unaudited) €
€
Continuing operations
Operating expenses (255,240) (165,140) (297,386)
Movement in fair 6 122,128 - 9,565
value of warrants
Operating loss (133,112) (165,140) (287,821)
Interest expense (3,239) (3,646) (3,646)
Loss before taxation (136,351) (168,786) (291,467)
Income tax expense - - -
Loss for the (136,351) (168,786) (291,467)
financial period/year
Loss per share
Basic and diluted 2 (0.0014) (0.0025) (0.0038)
earnings/(loss) per
share
Condensed statement of comprehensive income
Six-month period Six-month period Year ended
ended 30 November ended 30 November 31 May 2023
2023 2022
(Audited) €
(Unaudited) € (Unaudited) €
Loss for the (136,351) (168,786) (291,467)
financial
period/year
Income/(expense) - - -
recognised in
other
comprehensive
income
Total (136,351) (168,786) (291,467)
comprehensive
income/(expense)
for the
financial
period/year
Condensed statement of financial position
Note 30 November 30 November Year ended 31
2023 2022 May 2023
(Unaudited) (Unaudited) (Audited)
€ € €
Assets
Non-current
assets
Intangible 3 11,439,845 10,989,210 11,265,894
assets
Financial - - -
assets
Total non 11,439,845 10,989,210 11,265,894
-current assets
Current assets
Cash and cash 215,025 90,177 116,038
equivalents
Other 57,834 36,034 79,003
receivables
Total current 272,859 126,211 195,041
assets
Total assets 11,712,704 11,115,421 11,460,935
Equity
Capital and
reserves
Called up share 3,203,532 3,191,807 3,200,882
capital
presented as
equity
Share premium 10,726,620 9,959,181 10,546,844
Share based 450,658 450,658 450,658
payments
reserve
Retained losses (4,548,661) (4,289,629) (4,412,310)
Total equity 9,832,149 9,312,017 9,786,074
Liabilities
Non-current
liabilities
Convertible 122,483 - 119,246
loan
Warrant 5 95,606 - 109,224
liabilities
Derivative 10,304 146 10,304
liability
Total non 228,393 146 238,774
-current
liabilities
Current
liabilities
Trade and other 1,652,162 1,632,822 1,436,087
payables:
amounts falling
due within one
year
Convertible 6 - 170,436 -
Loan
Total current 1,652,162 1,803,258 1,436,087
liabilities
Total 1,880,555 1,803,404 1,664,859
liabilities
Total equity 11,712,704 11,115,421 11,460,935
and liabilities
Condensed statement of cash flows
Six-month Six-month period ended 30 Year ended 31
period ended November 2022 (Unaudited) May 2023
30 € (Audited)
November
2023 €
(Unaudited)
€
Cash flows from
operating
activities
(Loss) for the (136,351) (168,786) (291,467)
financial
period/year
Adjustments for:
Interest expenses 3,239 3,646 3,646
Movement in fair (122,128) - 109,224
value of warrants
(Decrease)/increas 200,825 191,584 1,361
e in trade and
other payables
Decrease/(increase 21,168 24,144 (18,825)
) in other
receivables
Advances 15,250 - 119,246
from/(repayments
to)
Conroy Gold and
Natural Resources
P.L.C
Net cash provided (17,997) 50,588 (76,815)
by/(used in)
operating
activities
Cash flows from
investing
activities
Investment in (173,951) (78,279) (354,963)
exploration and
evaluation
Net cash used in (173.951) (78,279) (354,963)
investing
activities
Cash flows from
financing
activities
Issue of share 299,555 - 453,109
capital
Share issue costs (8,620) - (23,161)
Net cash provided 290,935 - 429,948
by financing
activities
Increase in cash 98,987 (27,291) (J,830)
and cash
equivalents
Cash and cash 116,038 117,868 117,868
equivalents at
beginning of
financial
period/year
Cash and cash 215,025 90,177 116,038
equivalents at
end
of financial
period/year
Condensed statement of changes in equity
Share Share Share-based Retained Total
capital premium payment equity
(including reserve losses
deferred
share
capital)
€ € € € €
Balance 3,200,882 10,546,844 450,658 (4,412,310) 9,786,074
at 1
June 2023
Issue of 2,650 296,905 - - 299,555
share
capital
Share - (8,620) - - (8,620)
issue
costs *
Warrant - (108,509) - - (108,509)
issue
*
Loss for - - - (136,351) (136,351)
the
financial
period
Balance 3,203,532 10,726,620 450,658 (4,548,661) 9,832,109
at 30
November
2023
Balance 3,191,807 9,959,181 450,658 (4,120,843) 9,480,803
at 1
June 2022
Issue of - - - - -
share
capital
Share - - - - -
issue
costs
Share - - - - -
based
payments
Loss for - - - (168,786) (168,786)
the
financial
period
Balance 3,191,807 9,959,181 450,658 (4,289,629) 9,312,017
at 30
November
2022
Share capital
The share capital comprises 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 an Annual General Meeting held on 9 December 2016.
Authorised share capital:
The authorised share capital at 30 November 2021 compromised 7,301,301,041
ordinary shares of €0.00025 each, and 317,785,034 deferred shares of €0.00999
each* (€5,000,000), (30 November 2020: 7,301,301,041 ordinary shares of €0.00025
each, and 317,785,034 deferred shares of €0.00999 each* (€5,000,000)).
*Capital reorganisation:
Following approval at an Annual General Meeting ("AGM") held on 9 December 2016,
the Company reorganised its share capital by subdividing and reclassifying each
issued ordinary share of €0.01 as one ordinary share of €0.00001 each and one
deferred share of €0.00999 each. The Deferred Shares have no right to vote,
attend or speak at general meetings of the Company and have no right to receive
any dividend or other distribution, and have only limited rights to participate
in any return of capital on a winding-up or liquidation of the Company, which
will be of no material value. No application was made to the London Stock
Exchange for admission of the Deferred Shares to trading on the AIM.
Consolidated shares:
On 21 December 2017, the Company passed a Special Resolution at the Company's
AGM, that all of the ordinary shares of €0.00001 each in the capital of the
Company, whether issued or unissued were consolidated into New Ordinary Shares
of €0.00025 each in the capital of the Company ("consolidated shares") on the
basis of one consolidated share for every 25 existing ordinary shares. Following
the consolidation of the ordinary shares on 21 December 2017, the warrants in
issue were consolidated into one consolidated warrant for every 25 existing
warrants. The exercise price in relation to the warrants was also adjusted at
this time (see Note 2).
Share and Warrant issues during the period:
During the period ended 30 November 2023, the Company raised £150,000 through
the issue of 6,000,000 ordinary shares of the company at a price of £0.025 per
Subscription Share. In addition, Professor Richard Conroy and Dr Sorca Conroy
both subscribed for 2,000,000 shares each in addition to this amount bringing
the total amount raised to £250,000. As part of this fundraise, 10,000,000
warrants at £0.04 per share were issued, the value of which at date of issue was
deducted from share premium in line with the Company's accounting policies.
There were no share issues in the period ending 30 November 2022.
Share premium
The share premium comprises the excess consideration received in respect of
share capital over the nominal value of the shares issued as adjusted for the
costs of share issue in line with the Company's accounting policies.
Share based payment reserve
The share based payment reserve comprises of the fair value of all share options
and warrants which have been charged over the vesting period, net of amounts
relating to share options and warrants forfeited, exercised or lapsed during the
period, which are reclassified to retained earnings.
Retained losses
This reserve represents the accumulated losses incurred by the Company up to the
condensed statement of financial position date.
The accompanying notes form an integral part of these condensed financial
statements.
1 Accounting policies
Reporting entity
Karelian Diamond Resources plc (the "Company") is a company domiciled in
Ireland .
Basis of preparation and statement of compliance
The condensed financial statements for the six months ended 30 November 2023 are
unaudited.
The condensed financial statements have been prepared in accordance with
International Accounting Standard ("IAS") 34: Interim Financial Reporting.
The condensed financial statements do not include all the information and
disclosures required in the annual financial statements, and should be read in
conjunction with the Company's annual financial statements as at 31 May 2023,
which are available on the Company's website - www.kareliandiamondresources.com.
The accounting policies adopted in the presentation of the condensed financial
statements are consistent with those followed in the preparation of the
Company's annual financial statements for the year ended 31 May 2023.
The condensed financial statements have been prepared under the historical cost
convention, except for derivative financial instruments which are measured at
fair value at each reporting date.
The condensed financial statements are presented in Euro ("€"). € is the
functional currency of the Company.
The preparation of condensed 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 financial period in which the
estimate is revised and in any future financial periods affected. Details of
critical judgements are disclosed in the accounting policies detailed in the
annual financial statements.
The financial information presented herein does not amount to statutory
financial statements that are required by Chapter 4 part 6 of the Companies Act
2014 to be annexed to the annual return of the Company. The statutory financial
statements for the financial year ended 31 May 2023 were annexed to the annual
return and filed with the Registrar of Companies. The audit report on those
financial statements was unqualified.
These condensed financial statements were authorised for issue by the Board of
Directors on 28 February 2024.
Going concern
The Company recorded a loss of €136,351 for the six-month period ended 30
November 2023 (30 November 2022: loss of €168,786). The Company had net current
liabilities of €1,379,302 at that date (30 November 2022: €1,677,047).
The Board of 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 28 February 2025. As set out further in the Chairman's statement,
the Company expects to incur capital expenditure in 2024, consistent with its
strategy as an exploration company. In reviewing the proposed work programme for
exploration and evaluation assets, the results obtained from the exploration
programme 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.
Statement of compliance
The Company's financial statements have been prepared in accordance with IFRS as
adopted by the European Union ("EU").
Recent accounting pronouncements
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 once
endorsed by the EU will have any impact on the financial statements of the
Company.
· Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between an
investor and its associate or joint venture - Postponed indefinitely;
· 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 and classification of liabilities as
current or non-current - Effective date 1 January 2024.
2 Profit/(loss) per share
Basic earnings per
share
Six-month Six-month Year ended
period ended period 31 May
30 ended 30 2023
November November
2023 2022 (Audited)
(Unaudited) (Unaudited) €
€ €
Profit/(loss) for the (136,351) (168,786) (291,467)
financial period/year
attributable to
equity holders of the
Company
Number of ordinary 95,096,311 68,542,749 76,460,146
shares for the
purposes
of earnings per share
Basic earnings/(loss) (€0.0014) (€0.0025) (€0.0038)
per ordinary share
Diluted earnings/(loss) per share
The effect of share options and warrants is anti-dilutive.
3Intangible assets
Exploration and
evaluation assets
Cost 30 November 30 November 31 May
2023 2022 2023
(Unaudited) € (Unaudited)
€ (Audited)
€
At 1 June 11,265,894 10,910,931 10,910,931
Expenditure during the
financial period/year
93,258 18,510 269,314
· License and
appraisal costs
80,693 59,769 85,649
· Other operating
expenses
At 30 November/31 May 11,439,845 10,989,210 11,265,894
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 have considered the proposed work programmes for the
underlying mineral resources. They are satisfied that there are no indications
of impairment.
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.
4Commitments and Contingencies
At 30 November 2023, there were no capital commitments or contingent liabilities
(31 May 2023: No capital commitments or contingencies liabilities). Should the
Company decide to develop the Lahtojoki project, an amount of €40,000 is payable
by the Company to the vendors of the Lahtojoki mining concession.
5Convertible 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 7. 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 5 pence . 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.
The amount of €10,304 relates to derivative liability attached to the total
convertible loan note at date of issue above and the net amount of €119,246 was
recorded as the value of the convertible loan at 31 May 2023. The value of the
convertible loan including interest at 30 November 2023 was €122,483 and is
classified as a non-current liability.
6 Warrant liabilities
The Company holds Sterling based warrants. The Company estimates the fair value
of the sterling-based warrants using the Binomial Lattice Model. The
determination of the fair value of the warrants is affected by the Company's
share price along with other assumptions.
The fair value of the warrants in issue as at 30 November 2023 was €95,606.
10,000,000 warrants at a price of £0.04 were issued during the period and
600,000 warrants were exercised during the period at a price of £0.02.
7Related party transactions
(a)Apart from Directors' remuneration, equity investment from Directors, and
loans from shareholders, (who are also Directors), there have been no contracts
or arrangements entered into during the six-month period in which a Director of
the Company had a material interest.
(b)The Company shares accommodation and staff with Conroy Gold and Natural
Resources plc which have certain common Directors and shareholders. For the six
-month period ended 30 November 2023, Conroy Gold and Natural Resources plc
incurred costs totalling €49,596 (30 November 2022: €34,846) on behalf of the
Company. These costs were recharged to the Company by Conroy Gold and Natural
Resources plc. At 30 November 2023, Conroy Gold and Natural Resources plc was
owed €69,870 (30 November 2022: €234,651) by the Company.
(c)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 in the Company and
a further €129,550 (£112,500) into a convertible loan instrument as detailed in
Note 5.
8Subsequent events
There were no material events subsequent to the reporting date which necessitate
revision of the figures or disclosures included in the financial statements.
9Approval of the condensed financial statements
These condensed financial statements were approved by the Board of Directors on
28 February 2024. A copy of the condensed financial statements will be
available on the Company's website www.kareliandiamondresources.com on 29
February 2024.
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Karelian Diamond Resources Plc
Karelian Diamond Resources Plc - Half-yearly results for the six months ended 30 November 2023
29th February 2024, 07:00
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