Final Results

19 November 2007

                    Karelian Diamond Resources Plc ("KDR")                     

                 Final Results for the year ended 31 May 2007                  

Chairman's Statement

I have great pleasure in presenting your Company's Annual Report and Financial
Statements for the year ended 31 May 2007.

Your Company was established with the objective of finding commercial diamond
deposits in Finland, a country that is a relative newcomer to diamond
exploration. Finland hosts the same geological structure in which two
world-class diamond deposits have been found over the border in Russia. Since
geology recognises no country or political boundary, the logic for seeking
similar diamond deposits in Finland is very clear.

Successful diamond exploration requires a systematic approach and painstaking
attention to detail. It also requires expertise, energy and enthusiasm, all of
which your Company has in abundance. We hold the largest diamondiferous
kimberlite pipe found so far in Finland and will continue our drilling and
evaluation programme on it this winter. We are also in the process of following
up numerous kimberlite indicator mineral ("KIM") trains which are bringing us
closer to the kimberlites which are the primary source of those minerals.

Clearly, our diamond search is now entering an advanced and exciting stage.

As your Company continues to advance its search for world-class diamond
deposits in Finland, I think that it is opportune for me to use this year's
annual report to appraise shareholders of the reason we are exploring in
Finland, as well as commenting on the progress achieved to date and outlining
our plans and expectations for the year ahead.

One of the rarest of minerals, diamonds are formed under conditions of great
pressure and temperature which occur beneath thick blocks (+200km) of ancient
crustal rocks or cratons that are found only in certain parts of the world.
Diamonds are brought to the surface in volcanic rocks, predominantly
kimberlites, that erupt from those great depths.

Having the "right geological address" is therefore all important for a diamond
explorer and it is for this reason that your Company is focussing its efforts
on Finland, a politically stable country with a long mining tradition. A large
part of Finland is comprised of the ancient Karelian craton. This craton
extends across the border into Russia where it hosts two of the world's largest
and richest diamond discoveries - the Grib and Arkhangelskaya kimberlite pipes.

Though larger than Canada's Slave Craton in which the rich Ekati and Diavik
diamond mines are located, the Finnish section of the Karelian Craton remains
relatively under-explored for diamonds.

The availability of high-quality basic geoscientific data and technical
services in Finland and the country's excellent infrastructure have enabled
your Company's diamond exploration programme to proceed somewhat more
expeditiously than would be the case in other regions. Despite Finland's
relatively short diamond exploration history, more than 20 kimberlites have
been discovered there to date. A very high proportion of these are
diamondiferous, including your Company's Seitaperä pipe in the Kuhmo area.

With a surface area of 4.2ha, Seitaperä is the largest known kimberlite pipe in
Finland. We have recently exposed fresh kimberlite just beneath the surface in
a number of trenches excavated across the pipe. Over two tonnes of kimberlite
have been collected, and several 100kg samples have been sent for micro-diamond
analysis at SGS Lakefield Laboratories in Canada. Results are expected by the
end of the year.

We have successfully outlined the surface expression of the pipe and selected a
number of sites for drill-testing during the coming winter. Our work to date
has also indicated a possible south-west extension to the pipe which could
increase its overall size, and this will be further investigated in the coming
year.

Elsewhere in Finland, your Company has continued its exploration on several
locations where previously identified KIM trains are now known to converge with
a series of aeromagnetic anomalies. This convergence is particularly exciting
as it suggests possible multiple kimberlite sources in the area.

Demand for diamonds continues to rise, but mine production is declining, few
new diamond mines are in the pipeline and world inventories of mined diamonds
are depleted. Clearly a major new discovery by your Company would be welcomed
by the world diamond markets.

Your Company's diamond exploration programme in Finland has, by world
standards, made great progress in a very short period. We have an exciting year
ahead of us, with further significant progress expected at Seitaperä. With
regard to other exploration activities, we look forward to our ongoing work
bringing us closer to new kimberlite sources, of which there could be several.
Your Company is steadily progressing towards meeting its objective of finding
one or more major diamond deposits.

Financials

The loss after taxation for the year ended 31 May 2007 was €125,334 (31 May
2006: €135,952) and the net assets as at 31 May 2007 were €2,641,737 (31 May
2006: €2,742,471).

Subsequent to year end the Company raised £1,050,000 (€1.5m) through the issue
of 15,770,000 ordinary shares of €0.01 each at 6.5p sterling together with one
warrant, exercisable at 10p sterling during the three years following admission
of the Placing Shares, for every three shares allotted.

The directors have also considered the build-up of current liabilities. These
liabilities arise mainly from the accrual of unpaid directors' fees and
remuneration since incorporation. By foregoing payment of their fees and
remuneration, the directors effectively allowed the Company's exploration work
on the ground to proceed on a greater and more effective scale with the funds
available to the Company.

The directors have agreed to waive their entitlement to all fees accrued up to
31 August 2005 amounting to €83,183. Since 1 September 2005, the date of
Admission to AIM, the non-executive directors fees have been paid on a current
basis. The executive directors have not taken their salary entitlements or fees
and have agreed to waive the amounts accruing up to 30 November 2007. The
amount due for the period to 30 November 2007 would be €518,750 making the
total amount waived €601,933 (£416,779).

After careful consideration, and discussions with the Company's advisors, the
Board has decided, subject to ratification by the shareholders at the Annual
General Meeting, to issue a total of 12,852,377 warrants to the individual
directors for nil consideration exercisable over 10 years at a subscription
price of €0.10 (Stg7p per share). A resolution to this effect has therefore
been included in the agenda for the AGM.

The number of warrants proposed to be issued to each director is as follows:

Name of Warrant Holder                    Number of Warrants                   
                                                                               
R T W L Conroy                                                        5,521,049
                                                                               
M T A Jones                                                           4,191,275
                                                                               
J P Jones                                                             2,604,389
                                                                               
S P FitzPatrick                                                         232,201
                                                                               
L J Maguire                                                             232,201
                                                                               
R I Chaplin                                                              71,262

I welcome this action by the directors as it represents a strong vote of
confidence in your Company and its prospects.

In the light of the excellent exploration results achieved to date, your
directors are considering how best to fund your Company's activities going
forward. Options being studied include joint venture and farm-out, as well as
other arrangements as may be appropriate for advancing the interests of your
Company.

Electronic Communication

An amendment to the Articles of Association is proposed to enable electronic
communication to become another method of communication for the Company in so
far as the law permits. Shareholders will continue to be entitled to ask the
Company to provide a paper copy of any information which has been provided
electronically.

Auditors

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

Directors, Consultants and Staff

I would like to express my deep appreciation of the support and dedication of
the directors, consultants and staff, which has made possible the very
considerable progress and success which your Company has achieved.

Future Outlook

The Company will continue with its exploration programme with a view to
developing its diamond interests in Finland in order to generate shareholder
value.

Professor Richard Conroy

Chairman

19 November 2007

Profit and Loss Account

For the year ended 31 May 2007

                                                       Year ended   Year ended
                                                                              
                                                           31 May       31 May
                                                                              
                                                             2007         2006
                                                                              
                                                                €            €
                                                                              
Operating Expenses                                      (125,404)    (139,599)
                                                                              
Other Income                                                   70        3,647
                                                                              
Loss for the Financial Year/Period                      (125,334)    (135,952)
                                                                              
Loss per ordinary share                                   €0.0028      €0.0032

There are no recognised gains or losses other than the loss for the year. The
above all result from continuing operations.

Balance Sheet

As at 31 May 2007

                                                             2007          2006
                                                                               
                                                                €             €
                                                                               
Fixed Assets                                                                   
                                                                               
Mineral interests                                       3,617,723     3,541,406
                                                                               
Tangible fixed assets                                       1,341         1,509
                                                                               
Financial assets                                                4             4
                                                                               
                                                        3,619,068     3,542,919
                                                                               
Current Assets                                                                 
                                                                               
Debtors                                                     2,324        13,661
                                                                               
Cash at bank and in hand                                  115,402       112,791
                                                                               
                                                          117,726       126,452
                                                                               
Creditors: Amounts falling due within one year           (63,759)     (442,117)
                                                                               
Net Current Assets/(Liabilities)                           53,967     (315,665)
                                                                               
Total Assets less Current Liabilities                   3,673,035     3,227,254
                                                                               
Creditors: Amounts falling due after more than one    (1,031,298)     (484,783)
year                                                                           
                                                                               
Net Assets                                              2,641,737     2,742,471
                                                                               
Capital and Reserves                                                           
                                                                               
Called up share capital                                   447,716       447,716
                                                                               
Share premium account                                   2,529,648     2,529,648
                                                                               
Share based payments reserve                               24,600             -
                                                                               
Profit and loss account                                 (360,227)     (234,893)
                                                                               
Shareholders' Funds - all equity                        2,641,737     2,742,471
                                                                               

Cash Flow Statement

For the year ended 31 May 2007

                                                       Year ended    Year ended
                                                                               
                                                           31 May        31 May
                                                                               
                                                             2007          2006
                                                                               
                                                                €             €
                                                                               
Net Cash Inflow from Operating Activities               (305,458)        53,753
                                                                               
Capital Expenditure and Financial Investments           (263,046)     (657,252)
                                                                               
Net cash Outflow before Financing                       (568,504)     (603,499)
                                                                               
Financing                                                 571,115       716,287
                                                                               
Increase in Cash                                            2,611       112,788

Notes to the Financial Statements

1. Publication of non-statutory accounts

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

The financial information for the period ended 31 May 2007 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. Loss per share

The calculation of the loss per ordinary share of €0.0028 (2006 - €0.0032) is
based on the loss for the financial year of €125,334 (2005 - €135,952) and the
weighted average number of ordinary shares on a basic and fully diluted basis
during the year of 44,771,676 (2006 - 42,271,676). Share options and warrants
are not included in the calculation of fully diluted shares since the Company
incurred a loss in 2007 and 2006 which results in these potential shares being
anti-dilutive.

3. Dividends

No dividends were paid or are proposed in respect of the period ended 31 May
2007.

4. Copy of Accounts

A copy of the Annual Report and Accounts will be sent to all shareholders
shortly and will be available from the Company's registered office, 10 Upper
Pembroke Street, Dublin 2.

Further enquiries:

Karelian Diamond Resources plc                           Tel: [phone]
                                                                               
Professor Richard Conroy                                                       
                                                                               
John East & Partners Limited                                 Tel: [phone]
                                                                               
Jeffrey Coburn