De-merger of Diamond Interest

Conroy Diamonds & Gold PLC
16 June 2004


                   CONROY PLANS TO DEMERGE DIAMOND INTERESTS

   •Shareholders To Receive Shares On 1-For-6 Basis In New Diamond Company

   •Karelian Diamond Resources Starts With 25 Claims And 26 Claim
    Reservations

   •EGM To Approve Proposals Called For July 8

AIM-listed Conroy Diamonds and Gold plc (CDG) plans to de-merge its diamond
interests in Finland into a separate entity, Karelian Diamond Resources plc
(Karelian), by way of a Scheme of Arrangement under the terms of which, CDG
shareholders will receive one ordinary fully-paid Karelian share for every six
ordinary CDG shares held on the record date.

It is also proposed that on the day following the transfer of these interests to
Karelian, that Karelian acquire the diamond interests of Conroy plc, which
shares common directors with Conroy Diamonds and Gold. The diamond interests of
both companies are located in Finland.

Karelian Diamond Resources plc, which will have 25 diamond claims and 26 claim
reservations, will apply for admission to AIM in due course.

The rationale behind the proposal is that Conroy Diamonds and Gold's search for
gold in Ireland has now moved from pure exploration to assessment and
evaluation. The company believes that, at this stage, the segregation of its
diamond interests from its other interests would enable the company to focus on
gold and give shareholders a better understanding of the company's two separate
spheres of activity.

CDG's independent valuers, CSA Group, have estimated that the fair market value
of the exploration interests of CDG and Conroy plc to be transferred to Karelian
is 2.66m Euro. On this basis, CDG shareholders will receive approximately
29.5p.c. of the issued capital of Karelian and Conroy plc will receive 70.5p.c.
To effect this transaction, it is proposed that Karelian will allocate
approximately 10,257,000 fully-paid ordinary shares to members of CDG and a
further 24,515,030 shares to Conroy plc.

The EGM for CDG shareholders to vote on these proposals will be held on July 8,
after which High Court approval to the Scheme of Arrangement will be sought.
CDG directors unanimously recommend that shareholders vote in favour of the
resolutions as they intend to do in respect of their own holdings which amount
in aggregate to just over 6m shares, or 9.75p.c. of the issued share capital.

Further Information:

Professor Richard Conroy                  Tel: [phone]
Chairman Conroy Diamonds and Gold Plc.

Ron Marshman/John Greenhalgh              Tel: [phone]
City of London PR Limited.

Visit website at: www.conroydiamondsandgold.com



                      This information is provided by RNS
            The company news service from the London Stock Exchange