Final Results

5 November 2009                                                              

                        Karelian Diamond Resources Plc                         

                           ("KDR" or the "Company")                            

                 FINAL RESULTS FOR THE YEAR ENDED 31 MAY 2009                  

                     A PERIOD OF FURTHER POSITIVE FINDINGS                     

Karelian (AIM: KDR), the diamond exploration company focused on Finland,
announces its results for the year ended 31 May 2009.

Highlights:

  * Capacity Of Seitaperä Pipe To Carry Diamond-Bearing Material Clearly
    Demonstrated
   
  * Grade Distribution Likely To Be Highly Variable
   
  * Potential For Larger Diamonds To Be Present
   
  * Licence Applications To Cover Two Other Known Kimberlites In Kuhmo Area
   
Professor Richard Conroy, Chairman, said:

"As a result of the downturn in the diamond market since the final quarter of
2008 we are, wherever possible, limiting our activities to office-based work in
order to contain costs whilst we continue to assess additional opportunities in
Finland. Given that the findings of our work to date have been positive, both
at Seitaperä and in the Kuhmo area generally, we have therefore submitted
additional licence applications over areas of particular interest. These
include two other known kimberlites in the Kuhmo area - kimberlites 18
(Havukkasuo) and 24 (Lentiira).

"The outlook for diamonds is beginning to improve. Although stocks of both
rough and polished stones remain high, we are encouraged by recent comments
from De Beers that the pace of recovery in the rough diamond market is
beginning to pick up. This is a particularly significant development given that
the diamond industry was among the hardest hit by the global financial crisis."

Further enquiries:

Karelian Diamond Resources Plc                         Tel: [phone]
                                                                             
Professor Richard Conroy                                                     
                                                                             
Merchant John East Securities Limited                      Tel: [phone]
                                                                             
Simon Clements / Virginia Bull                                               
                                                                             
City Capital Corporation Limited                           Tel: [phone]
                                                                             
Charles Dampney                                                              
                                                                             
Lothbury Financial Limited                                 Tel: [phone]
                                                                             
Ron Marshman / Michael Padley                                                

http://www.kareliandiamondresources.com

Chairman's Statement

I have pleasure in presenting your Company's Annual Report and Financial
Statements for the year ended 31 May 2009. This was a year during which your
Company made further progress with its diamond exploration programme in Finland
and clearly demonstrated the capacity of the Seitaperä kimberlite pipe to carry
diamond-bearing material.

A full mineralogical study of all the Seitapera micro-diamonds recovered to
date, including the 67 micro- and macro-diamonds recovered from a 100.20 kg
sample as reported in July 2008, has been completed at MCC Geoscience of
Vancouver, Canada. The results indicate that the grade distribution in the
Seitaperä Kimberlite is likely to be highly variable, a feature common to the
diatreme root zones of many kimberlites. At this point, however, it is not
possible to estimate an overall bulk diamond grade.

These findings suggest that there is potential for larger diamonds to be
present in the Seitaperä pipe, however, the majority of the kimberlite,
including the new northeast extension, remains untested. In view of the present
state of the diamond market, the Company will not at this stage proceed with
the extensive further drilling and micro-diamond sampling that will be required
to adequately test a kimberlite of this size (6.9ha). Nevertheless, the Company
will continue with evaluation work and advancing its diamond claim applications
in Finland.

There has been only limited historical diamond exploration in the Kuhmo area,
but when this is considered in conjunction with the results achieved by
Karelian, the area's potential for diamondiferous kimberlites is clearly
demonstrated. As a result of these encouraging indications, your Company has
applied for licences covering the two other known Kimberlite occurrences in the
area - Kimberlites 18 (Havukkasuo) and 24 (Lentiira).

The Company also continues to explore in the Joensuu area of Eastern Finland,
where recent sampling programmes recovered kimberlite indicator minerals,
including G9 and G10 garnets. These results, taken in conjunction with those
from earlier work, increase the likelihood that the Joensuu area could also
contain a number of kimberlite pipes.

Financials

The loss after taxation for the year ended 31 May 2009 was €194,126 (2008: €
268,638) and the net assets as at 31 May 2009 were €3,712,312 (2008: €
3,865,379).

As in previous years, I have supported the working capital requirements of the
Company and in the period under review have advanced loans to the value of €
238,022 and the balance of the loans due to me at the period end was €719,993.
The loans have been made on normal commercial terms.

The other Directors consider, having consulted with the Company's Nominated
Adviser, that the terms of these loans are fair and reasonable in so far as the
Company's shareholders are concerned.

Auditors

I would like to take the opportunity of thanking the partners and staff of
Deloitte and Touche for their services to your Company during the course of the
year.

Directors, Consultants and Staff

I would also like to express my deep appreciation of the support and dedication
of the Directors, Consultants and Staff, which has made possible the continued
progress which your company has achieved.

Future Outlook

Despite the downturn in the diamond market, we will continue to evaluate
opportunities to enhance shareholder value. In view of the positive findings to
date, both at Seitapera and in the Kuhmo area generally, we will press on with
our applications for licences over the other known kimberlites in the Kuhmo
area as well as licence applications in the Joensuu area. We look forward with
confidence to a successful future.

Professor Richard Conroy

Chairman

5 November 2009

INCOME STATEMENT

FOR THE YEAR ENDED 31 MAY 2009

                                                          2009           2008
                                                                             
                                                             €              €
                                                                             
OPERATING EXPENSES                                   (194,342)      (280,720)
                                                                             
Other income                                               216         12,082
                                                                             
LOSS BEFORE TAX                                      (194,126)      (268,638)
                                                                             
Taxation                                                     -              -
                                                                             
LOSS RETAINED FOR THE YEAR                           (194,126)      (268,638)
                                                                             
Loss per ordinary share                              (€0.0032)      (€0.0046)
                                                                             

Balance Sheet

at 31 May 2009

                                                          2009           2008
                                                                             
                                                             €              €
                                                                             
ASSETS                                                                       
                                                                             
Non-current Assets                                                           
                                                                             
Intangible assets                                    4,883,865      4,221,785
                                                                             
Financial assets                                             4              4
                                                                             
Property, plant and equipment                            1,089          1,173
                                                                             
                                                     4,884,958      4,222,962
                                                                             
Current Assets                                                               
                                                                             
Trade and other receivables                             10,222         50,441
                                                                             
Cash and cash equivalents                                7,666         35,430
                                                                             
                                                        17,888         85,871
                                                                             
Total assets                                         4,902,846      4,308,833
                                                                             
EQUITY AND LIABILITIES                                                       
                                                                             
Capital and Reserves                                                         
                                                                             
Called up share capital                                605,416        605,416
                                                                             
Share premium                                        3,801,202      3,801,202
                                                                             
Share based payments reserve                           128,685         87,626
                                                                             
Retained earnings                                    (822,991)      (628,865)
                                                                             
Total equity                                         3,712,312      3,865,379
                                                                             
Non-current Liabilities                                                      
                                                                             
Trade and other payables: Amounts falling due          719,993        238,022
after more than one year                                                     
                                                                             
Total non-current liabilities                          719,993        238,022
                                                                             
Current liabilities                                                          
                                                                             
Trade and other payables: Amounts falling due          470,541        205,432
within                                                                       
                                                                             
one year                                                                     
                                                                             
Total Current Liabilities                              470,541        205,432
                                                                             
Total Liabilities                                    1,190,534        443,454
                                                                             
Total Equity and Liabilities                         4,902,846      4,308,833
                                                                             

Cash Flow Statement

FOR the Year Ended 31 May 2009

                                                          2009           2008
                                                                             
                                                             €              €
                                                                             
Cash generated by/(used in) operations                 118,876      (196,010)
                                                                             
Tax paid                                                     -              -
                                                                             
Net cash generated by/(used in) operating              118,876      (196,010)
activities                                                                   
                                                                             
Cash flows from investing activities                                         
                                                                             
Investment in exploration and evaluation             (628,611)      (553,053)
                                                                             
Net cash used in investing activities                (628,611)      (553,053)
                                                                             
Cash flows from financing activities                                         
                                                                             
Issue of share capital                                       -      1,429,254
                                                                             
Shareholder loans                                      481,971      (760,163)
                                                                             
Net cash generated from financing activities           481,971        669,091
                                                                             
Decrease in cash and cash equivalents                 (27,764)       (79,972)
                                                                             
Cash and cash equivalents at beginning of year          35,430        115,402
                                                                             
Cash and cash equivalents at end of year                 7,666         35,430

Notes to the Financial Statements

1. Publication of non-statutory accounts

The financial information set out in this preliminary announcement is
abbreviated accounts as defined in Section 19 of the Companies (Amendment) Act
1986.

The financial information for the period ended 31 May 2009 have been extracted
from the Company's financial statements to that date which have received an
unqualified auditors' report but have not yet been delivered to the Registrar
of Companies.

2. Earnings per share

The calculation of the loss per ordinary share of €0.0032 (2008 - €0.0046) is
based on the loss for the financial year of €194,126 (2008 - €268,638) and the
weighted average number of ordinary shares on a basic and fully diluted basis
during the year of 60,541,676 (2008 - 57,913,343).

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 period ended 31 May
2009.

4. Copy of Accounts

A copy of the Annual Report and Financial Statements will be available on the
Company's website www.kareliandiamondresources.com and will be available from
the Company's registered office, 10 Upper Pembroke Street, Dublin 2. It will
also be forwarded to shareholders who requested a hard copy.