REG-Karelian Diamond Resources Plc: Half-yearly results for the six months ended 30 November 2024
28/02/2025 13:15
28 February 2025
Karelian Diamond Resources plc
(“Karelian” or “the Company”)
Half-yearly results for the six months ended 30 November 2024
Karelian Diamond Resources plc (AIM: KDR), the diamond exploration and natural
resources company focused on Finland and Ireland, today announces its
unaudited results for the six months ended 30 November 2024. 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).
Further operational progress was made by Karelian during the period, while the
final approval for the proposed diamond mine remains awaited.
Highlights of the half-year period included:
* Lahtojoki diamond mine boundaries were finalised with no change to the
existing boundaries. Landowner compensation agreed and paid. Final approval on
the three outstanding items is expected in H2 2025.
* Exploration programme in the Kuhmo region of Finland continues with a
follow-up detailed electromagnetic survey conducted over the target area which
has identified two diatreme-shaped anomalies that could represent the
kimberlitic source of the green diamond.
* New licence areas and extensions of existing ones have been granted over,
and adjacent to, the target areas in Finland.
* In Northern Ireland expert assessment on the nickel, copper and platinum
anomalies have proven very encouraging as being capable of hosting significant
economic deposits and as a result further work is being carried out.
Brendan McMorrow, Chairman of Karelian Diamonds, said:
“The Company has made further progress in the period, especially with
regards to the granting of the mining permit at the Lahtojoki diamond deposit.
We have also made progress towards determining the source of the green diamond
the Company discovered in the Kuhmo region in Finland and the Board is very
excited regarding the potential for metal ores in Northern Ireland.”
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
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 period ended 30 November 2024.
The Lahtojoki Diamond Deposit
The mine boundaries for the Lahtojoki diamond deposit were finalised in the
period. A hearing of the Finnish Land Court resulted in no change to the
existing boundaries. This decision was an essential and long-awaited step as
the Company proceeds with its plans for the proposed development of the
Lahtojoki diamond deposit.
Additionally, the appeals by two landowners regarding the terms were rejected
by the Land Court, except for three minor items. The Company has been informed
that these will be determined in the next quarter.
Diamond Exploration Programme in Finland
The Company’s exploration programme in the Kuhmo region of Finland continues
to be encouraging up-ice of the Company’s discovery of a green diamond.
Basal till sampling suggests that two of the sample locations may be close to
the source of the green diamond.
A follow-up semi-airborne unmanned aerial vehicle (“UAV”) based detailed
electromagnetic (“EM”) survey has been conducted over the target area. A
UAV-based EM survey is a geophysical method used to map the electrical
conductivity of the subsurface.
As announced on 24 January 2025, the geophysical interpretation of the
electromagnetic data has identified two diatreme-shaped anomalies that could
represent the kimberlitic source of the green diamond (and the indicator
mineral fan). The anomalies are up-ice of the two highly anomalous basal
till sample locations documented in the pitting programme carried out in 2023
(announced by the Company on 19 December 2023) and the green diamond
previously discovered in till by the Company (as announced by the Company on
31 January 2017).
Several new licences and licence extensions have been obtained in the area.
As announced on 7 February 2025, the Company has applied for, and been
granted, a new reservation, Kuumu 1, at Lentiira in northern Kuhmo, 30
kilometres to the north of the Company´s green diamond discovery (announced
by Karelian on 31 January 2017). The reservation provides a one-year privilege
to apply for an exploration permit in the area. The Lentiira area is
considered highly prospective by the Company.
In addition the exploration permit, Seitaperä, covering the Seitaperä
diamondiferous kimberlite (orangeite) in Kuhmo, circa 6 kilometres to the
southwest of the exploration permit Kuhmo 1, has been extended for a further 3
year period by TUKES in March 2024 and as announced by the Company on 25
January 2024, extensions for the exploration permits, Riihivaara 26,
Riihivaara 24, 24A and 24B in Kuhmo, were granted by TUKES for further 3 years
from January 2024. The Riihivaara 26 exploration permit covers Karelian
Diamond´s kimberlite (olivine lamproite) discovery at Riihivaara, circa 10
kilometres to the south of the exploration permit Kuhmo 1.
The various licence areas in Kuhmo interlink and cover an area that the
Company believes has the potential to become a significant diamond province on
the Finnish side of the Karelian Craton.
New exploration permits at Liperi, in the Joensuu region of Eastern Finland,
and Salla, in Lapland of Finland, have also been recently granted to the
Company.
However, the main focus is on the development of a diamond mine at Lahtojoki
which will bring significant benefits to the Company and its shareholders in
the near to medium term.
Northern Ireland Nickel, Copper and Platinum Group Metals Projects
An assessment prepared by independent geological consultant, Dr Larry Hulbert,
announced on 24 June 2024, confirms the potential for Nickel, Copper, and
Platinum-Group Elements (“PGE”), in the Company’s licence areas in
Northern Ireland. The results of this assessment were very encouraging.
Dr Hulbert has been engaged to carry out further work in the licence area and,
as previously announced, the Company is actively seeking a strategic partner
to carry out a two-year exploration programme with a view to developing a
number of the targets identified as being capable of hosting significant
economic deposits.
The Company holds three prospecting licences, totalling an area of
approximately 750Km2, in Northern Ireland.
Finance
The loss after taxation for the half year ended 30 November 2024 was
€121,186 (30 November 2023: loss of €136,351) and the net assets as at 30
November 2024 were €9,993,699 (30 November 2023: €9,832,149).
Directors and Staff
I would like to thank my fellow directors, staff and consultants for their
support and dedication, which has allowed the Company to continue to develop,
especially since the loss of Professor Conroy. Their support and commitment is
key to the success of the Company.
Outlook
Over the period the Company has identified new highly prospective metals
targets in Northern Ireland, expanded its knowledge of the Kuhmo region and
acquired new adjacent licence areas. The Company is also, hopefully, finally
reaching the end of the application process for the Lahtojoki diamond deposit
which will allow the Company to move forward and develop a mine at the site.
Yours faithfully,
Brendan McMorrow
Chairman
28 February 2025
Condensed income statement
Six-month period ended 30 November 2024 (Unaudited) € Six-month period ended 30 November 2023 (Unaudited) € Year ended 31 May 2024 (Audited) €
Continuing operations
Operating expenses (164,741) (255,240) (418,312)
Movement in fair value of warrants 46,795 122,128 187,628
Operating loss (117,946) (133,112) (230,684)
Interest expense (3,240) (3,239) (6,476)
Loss before taxation (121,186) (136,351) (237,160)
Income tax expense - - -
Loss for the financial period/year (121,186) (136,351) (237,160)
Loss per share
Basic and diluted loss per share (0.0012) (0.0014) (0.0023)
Condensed statement of comprehensive income
Six-month period ended 30 November 2024 (Unaudited) € Six-month period ended 30 November 2023 (Unaudited) € Year ended 31 May 2024 (Audited) €
Loss for the financial period/year (121,186) (136,351) (237,160)
Income/(expense) recognised in other comprehensive income - - -
Total comprehensive income/(expense) for the financial period/year (121,186) (136,351) (237,160)
Condensed statement of cash flows
For the six-month period ended 30 November 2024
30 November 2024 (Unaudited) 30 November 2023 (Unaudited) Year ended 31 May 2024 (Audited)
€ € €
Assets
Non-current assets
Intangible assets 11,896,405 11,439,845 11,690,194
Financial assets - - -
Total non-current assets 11,896,405 11,439,845 11,690,194
Current assets
Cash and cash equivalents 47,290 215,025 39,597
Other receivables 114,183 57,834 81,551
Total current assets 161,473 272,859 121,148
Total assets 12,057,878 11,712,704 11,811,342
Equity
Capital and reserves
Called up share capital presented as equity 3,209,432 3,203,532 3,203,532
Share premium 11,104,265 10,726,620 10,736,889
Share based payments reserve 450,658 450,658 450,658
Retained losses (4,770,656) (4,548,661) (4,649,470)
Total equity 9,993,699 9,832,149 9,741,609
Liabilities
Non-current liabilities
Convertible loan - 122,483 -
Warrant liabilities - 95,606 -
Derivative liability - 10,304 -
Total non-current liabilities - 228,393 -
Current liabilities
Trade and other payables: amounts falling due within one year 1,902,683 1,652,162 1,903,601
Convertible Loan 128,962 - 125,722
Warrant Liabilities 4,230 - 30,106
Derivative Liability 10,304 - 10,304
Total current liabilities 2,064,179 1,652,162 2,069,733
Total liabilities 2,064,179 1,880,555 2,069,733
Total equity and liabilities 12,057,878 11,712,704 11,811,342
Condensed statement of cash flows
For the six-month period ended 30 November 2024
Six-month period ended 30 November 2024 (Unaudited) € Six-month period ended 30 November 2023 (Unaudited) € Year ended 31 May 2024 (Audited) €
Cash flows from operating activities
Loss for the financial period/year (121,186) (136,351) (237,160)
Adjustments for:
Interest expenses 3,240 3,239 6,476
Movement in fair value of warrants (46,795) (122,128) (187,628)
Increase in trade and other payables 71,280 200,825 444,507
Decrease/(increase) in other receivables (32,632) 21,168 (2,548)
Net cash provided by/(used in) operating activities (126,093) (33,317) 23,647
Cash flows from investing activities
Investment in exploration and evaluation (206,211) (173,951) (424,300)
Net cash used in investing activities (206,211) (173.951) (424,300)
Cash flows from financing activities
Issue of share capital 409,177 299,555 301,205
Share issue costs (14,983) (8,620) -
Advances from/(repayments to) Conroy Gold and Natural Resources P.L.C (54,197) 15,250 23,007
Net cash provided by financing activities 339,997 290,935 324,212
Increase in cash and cash equivalents 7,693 98,987 (76,441)
Cash and cash equivalents at beginning of financial period/year 39,597 116,038 116,038
Cash and cash equivalents at end of financial period/year 47,290 215,025 39,597
Condensed statement of changes in equity
for the six-month period ended 30 November 2024
Share capital (including deferred share capital) Share premium Share-based payment reserve Retained losses Total equity
€ € € € €
Balance at 1 June 2024 3,203,532 10,736,889 450,658 (4,649,470) 9,741,609
Issue of share capital 5,900 403,277 - - 409,177
Share issue costs - (35,901) - - -
Warrant issue - - - - -
Loss for the financial period - - - (121,186) (121,186)
Balance at 30 November 2024 3,209,432 11,104,265 450,658 (4,770,657) 9,993,699
Balance at 1 June 2023 3,200,882 10,546,844 450,658 (4,412,310) 9,786,074
Issue of share capital 2,650 296,905 - - 299,555
Share issue costs - (8,620) - - (8,620)
Share based payments - (108,509) - - (108,509)
Loss for the financial period - - - (136,351) (136,351)
Balance at 30 November 2023 3,203,532 10,726,620 450,658 (4,548,661) 9,832,109
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 2024 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 2023: 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 2024, the Company raised £328,747 before
expenses through the issue of 21,916,479 new ordinary shares at a price of
£0.015 per ordinary share. In addition and at the same time as the
fundraising, the Company converted amounts owing to certain parties totalling
£25,253 into equity by issuing 1,683,516 new ordinary shares at the same
price. As part of this fundraise, 11,799,997 warrants to acquire new
ordinary shares at a price of £0.03 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.
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.
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 2024
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
2024, 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 2024.
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 2024 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 2025.
Going concern
The Company recorded a loss of €121,186 for the six-month period ended 30
November 2024 (30 November 2023: loss of €136,351). The Company had net
current liabilities of €1,902,276 at that date (30 November 2023:
€1,379,302).
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 2026. As set out further in the Chairman’s
statement, the Company expects to incur capital expenditure in 2025,
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 period ended 30 November 2024 (Unaudited) € Six-month period ended 30 November 2023 (Unaudited) € Year ended 31 May 2024 (Audited) €
Loss for the financial period/year attributable to equity holders of the Company (121,186) (136,351) (237,160)
Number of ordinary shares for the purposes of earnings per share 124,748,635 95,096,311 101,040,146
Basic loss per ordinary share (€0.0012) (€0.0014) (€0.0023)
Diluted earnings/(loss) per share
The effect of share options and warrants is anti-dilutive.
3 Intangible assets
Exploration and evaluation assets
Cost 30 November 2024 (Unaudited) € 30 November 2023 (Unaudited) € 31 May 2024 (Audited) €
At 1 June 11,690,194 11,265,894 11,265,894
Expenditure during the financial period/year
* License and appraisal costs 118,372 93,258 246,586
* Other operating expenses 87,839 80,693 177,714
At 30 November/31 May 11,896,405 11,439,845 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 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.
3 Commitments and Contingencies
At 30 November 2024, there were no capital commitments or contingent
liabilities (31 May 2024: 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.
4 Convertible Loan
On 19 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. (“Conroy Gold”) which is both a shareholder in the
company and has a number of other connections as noted in Note 8. The
convertible loan note is unsecured, had an initial term of 18 months and
attracts interest at a rate of 5 per cent. 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.
Conroy Gold 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 term of the formal loan agreement ended in November
2024. The Company has been in discussions to extend the term of the loan and
post period end the parties have agreed in principle to extend the term of the
convertible loan to 30 November 2025, however this remains subject to, inter
alia, finalisation of a variation agreement and any necessary regulatory
approvals under the AIM Rules for Companies. The parties are also in
discussions to amend the conversion price of the convertible loan note as part
of the variation agreement.
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 2024 was €128,962 and
is classified as a non-current liability.
5 Trade and other payables: amounts falling due within one
year
Included in the payables figure of €1,902,683 is an amount of €1,562,388
in respect of amounts owing to both current and former directors of the
Company who provide continuing support to the Company through renewing
annually a commitment not to seek payment of the amounts owed unless the
Company is in a position to discharge them.
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.
As part of the share issue in July 2024, the Company issued 11,799,997
warrants at a price of GBP 3 pence per warrant. These warrants expire in
July 2025. All other warrants expired during the period and the fair value
of the remaining warrants in issue as at 30 November 2024 was €4,230.
The movement in fair value of warrants including the effect of warrant expiry
resulted in a non-cash gain of €46,795.
7 Related 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 2024, Conroy Gold and Natural Resources plc
incurred costs totalling €34,245 (30 November 2023: €49,596) on behalf of
the Company. These costs were recharged to the Company by Conroy Gold and
Natural Resources plc. At 30 November 2024, Conroy Gold and Natural
Resources plc was owed €126,592 (30 November 2023: €69,870) 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.
8 Subsequent events
The Company completed a fundraise of £323,075 at a price of GBP 0.75 pence
per ordinary share on 20th February 2025. There were no other material
events subsequent to the reporting date which necessitate revision of the
figures or disclosures included in the financial statements.
9 Approval of the condensed financial statements
These condensed financial statements were approved by the Board of Directors
on 28 February 2025. A copy of the condensed financial statements will be
available on the Company’s website www.kareliandiamondresources.com on 28
February 2025.
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