Drilling Report

2 Feb 2006 11:27

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 hascommenced drilling of the known diamondiferous Seitapera kimberlite pipe on itslicences near Kuhmo in Finland. The drilling is being carried out by theGeological Survey of Finland under contract to Karelian.The Seitapera pipe, which has a surface area of approximately 4 hectares, wasdiscovered by Malmikaivos Oy in 1993 but was never fully explored. Only a verylimited number of vertical drill holes were completed by Malmikaivos Oy and itspartner Ashton before the latter withdrew from the area to focus on otherFinnish claims some 120km away. However, a 13.3t composite sample from theSeitapera pipe was reported to have returned a grade of 1.09 carats per hundredtonnes.The Seitapera pipe shows that the right geochemical conditions exist to hostdiamonds in the Kuhmo area. Karelian has discovered 16 separate indicatormineral anomalies in the same general area as the Seitapera pipe. It has alsoencountered kimberlitic material in a preliminary trenching programme inRiihivaara that followed a detailed magnetic survey of one of those anomalies.The company believes that these developments, together with the fact thatkimberlites typically occur in clusters, suggest that multiple sources ofdiamonds may exist in the Kuhmo area.The objective of the current follow-up drilling programme by Karelian on theSeitapera pipe is to re-assess the geology, diamond potential and extent of thepipe as well as its significance in relation to other potential sources ofkimberlitic pipes found by Karelian in the Kuhmo area.Further Information:Professor Richard Conroy, Chairman Karelian Diamond Resources plc. Tel: +353-1-661-8958Charles Dampney, City Capital Securities Limited. Tel: + 20-7822-7107Jeffrey Coburn, John East & Partners Limited. Tel: + 20-7628-2200Ron Marshman/John Greenhalgh, City of London PR Limited. Tel: + 20-7628-5518ENDKARELIAN DIAMOND RESOURCES PLC