Drilling Report

2 February 2006

                        Karelian Diamond Resources Plc                         

                 KARELIAN COMMENCES DRILLING OF DIAMONDIFEROUS                 

                           SEITAPERA KIMBERLITE PIPE                           

  * Pipe Confirms Right Conditions To Host Diamonds Are Present At Kuhmo
   
  * Previous Operator Analysed Only Very Small Sample Of Kimberlite
   
Karelian Diamond Resources plc (Karelian) is pleased to announce that it has
commenced drilling of the known diamondiferous Seitapera kimberlite pipe on its
licences near Kuhmo in Finland. The drilling is being carried out by the
Geological Survey of Finland under contract to Karelian.

The Seitapera pipe, which has a surface area of approximately 4 hectares, was
discovered by Malmikaivos Oy in 1993 but was never fully explored. Only a very
limited number of vertical drill holes were completed by Malmikaivos Oy and its
partner Ashton before the latter withdrew from the area to focus on other
Finnish claims some 120km away. However, a 13.3t composite sample from the
Seitapera pipe was reported to have returned a grade of 1.09 carats per hundred
tonnes.

The Seitapera pipe shows that the right geochemical conditions exist to host
diamonds in the Kuhmo area. Karelian has discovered 16 separate indicator
mineral anomalies in the same general area as the Seitapera pipe. It has also
encountered kimberlitic material in a preliminary trenching programme in
Riihivaara that followed a detailed magnetic survey of one of those anomalies.

The company believes that these developments, together with the fact that
kimberlites typically occur in clusters, suggest that multiple sources of
diamonds may exist in the Kuhmo area.

The objective of the current follow-up drilling programme by Karelian on the
Seitapera pipe is to re-assess the geology, diamond potential and extent of the
pipe as well as its significance in relation to other potential sources of
kimberlitic pipes found by Karelian in the Kuhmo area.

Further Information:

Professor Richard Conroy, Chairman Karelian Diamond Resources plc. Tel: +
353-1-661-8958

Charles Dampney, City Capital Securities Limited. Tel: + 20-7822-7107

Jeffrey Coburn, John East & Partners Limited. Tel: + 20-7628-2200

Ron Marshman/John Greenhalgh, City of London PR Limited. Tel: + 20-7628-5518