Admission to AIM

1 September 2005

                    Karelian Diamond Resources Plc ('KDR')                     

                     KARELIAN LISTS ON AIM WITH PORTFOLIO                      

                        OF DIAMOND PROSPECTS IN FINLAND                        

  * Focussed On Discovering Potential World-Class Diamond Deposits In Karelian
    Craton
   
  * Holds 57 Claims Including Those Over A Proven Diamondiferous Kimberlite
    Pipe
   
  * Planned Programme Includes Drilling, Sampling And Micro-Diamond Analysis
   
Karelian Diamond Resources plc is pleased to announce the admission of its
shares to trading on AIM today.

KDR is the holding company of a diamond exploration group focussed on
discovering a potential world-class diamond deposit in the Finnish sector of
the Karelian Craton. This is a block of ancient crustal rocks, which occupies
much of eastern and northern Finland, extending over the border into Russia.

The potential of the Karelian Craton to host diamond deposits is indicated by
major diamond discoveries in the Russian sector of the Craton. These include
two world-class deposits: the Grib pipe which is estimated to contain a
resource of 98 million tonnes at an average grade of 69 carats per hundred
tonnes (cpht) with an estimated in situ value of US$3.7 billion, and the
Lomonosova deposit whose diamond reserves are estimated to be worth US$12.0
billion.

KDR believes that the Finnish sector of the Craton, given its size and
potential, is under-explored and, by analogy with the Russian sector, has the
potential to host similar world-class diamond deposits.

As of September 1, the group holds a total of 57 claims in Finland, including
those covering a proven diamondiferous kimberlite pipe at Seitaperä in the
Kuhmo area near the Russian border. The licences are divided on a geographical
basis into four separate claim blocks (Lapland, Western Finland, Kuhmo and
South-Eastern Finland), all four of which have been independently assessed as
'highly prospective for diamonds.'

KDR has developed a close working relationship with the Geological Survey of
Finland (GTK) and is able to draw on its expertise, its extensive knowledge of
Finnish geology and its excellent technical and laboratory services. KDR
employs GTK staff under contract as local consultants and to undertake
fieldwork and has benefited greatly from this relationship. In addition, KDR's
senior consultant, Dr Bert Gerryts, is an internationally respected diamond
geologist who pioneered the use of indicator minerals and geophysics in diamond
exploration.

KDR's planned work programme includes drilling, geophysics, sampling,
processing and analysis, including micro-diamond analysis and indicator mineral
geochemistry.

Within the Kuhmo block, which includes the claims covering the diamondiferous
Seitapera pipe, KDC has recovered diamond indicator pyrope garnets (including
G9s and G10s which are formed at the same temperature and pressure as diamonds)
as well as chrome diopsides of kimberlitic composition. Sixteen separate
indicator mineral anomalies have been identified which, when coupled with the
presence of the known diamondiferous kimberlite pipe, suggests that multiple
sources for diamonds may exist in the area. KDC's claims cover all of the
highest priority targets so far identified.

The management of KDR, together with its staff and consultants, have a track
record of success in mineral exploration and look to enhance this record with a
major commercial diamond discovery in Finland.

On admission, KDR raised £500,000 (before expenses) through a placement of
10,000,000 ordinary shares at 5 pence each, representing 22.3 per cent of the
enlarged issued share capital of 44,771,676 ordinary shares.

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: [phone]

Ron Marshman/John Greenhalgh

City of London PR Limited. Tel: + 20-7628-5518