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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Karelian Diamond Resources Plc | LSE:KDR | London | Ordinary Share | IE00BD09HK61 | ORD EUR0.00025 (CDI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.75 | 2.50 | 3.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Misc Nonmtl Minrls, Ex Fuels | 10k | -291k | 0.0000 | N/A | 200.79M |
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TIDMKDR
18 February 2019
Karelian Diamond Resources plc
("Karelian" or "the Company")
Half-yearly results for the six months ended 30 November 2018
Karelian Diamond Resources plc (AIM: KDR), the diamond exploration company
focused on Finland, announces its unaudited results for the six months ended 30
November 2018.
Highlights of the half-year period included:
* Assessment of the Lahtojoki diamond deposit continues; the broker model
valued the project at US$32.9M, with an IRR of 50.2%. Over the past six
months, the Company has spent considerable time in relation to regulatory
issues as it prepares to develop a mine.
* Drilling was carried out on both Anomaly 5 and at Riihivaara leading to the
discovery of orangeite in both areas, a potentially diamondiferous host
rock.
* At Anomaly 5, where the Company discovered a green diamond in a till
sample, the orangeite (Group II Kimberlite) was up-ice from the diamond
discovery.
* At Riihivaarä - the drilling programme also yielded positive results, with
further evidence of diamond potential in the area.
Commenting, Chairman, Professor Richard Conroy said:
"The Company has made successful progress, particularly in regard to regulatory
matters, with its Lahtojoki Diamond Mining Project as we move towards the
issuance of a mining permit. In addition, the results, at Anomaly 5 and
Riihivaara, enhance not only our understanding of the Riihivaara kimberlite and
Anomaly 5 but also of the possible overall diamond potential of the Kuhmo
region of Finland."
For further information please contact:
Karelian Diamond Resources plc Tel:
+353-1-479-6180
Professor Richard Conroy, Chairman
Allenby Capital Limited (Nomad) Tel:
+44-20-3328-5656
Nick Athanas/Nick Harriss
Brandon Hill Capital Limited (Broker) Tel:
+44-20-3463-5000
Jonathan Evans
Lothbury Financial Services Tel:
+44-20-3290-0707
Michael Padley
Hall Communications Tel:
+353-1-660-9377
Don Hall
www.kareliandiamondresources.com
CHAIRMAN'S STATEMENT
I have great pleasure in presenting your Company's Half-Yearly Report for the
six months ended 30 November 2018. During the period, your Company made
successful progress with its Lahtojoki Diamond Mining Project in the
Kuopio-Kaavi region of Finland towards the issuance of a mining permit which is
of course essential before the Company can proceed with developing a mine. The
Company's diamond exploration programme in the Kuhmo region of Eastern Finland
also made good progress with drilling resulting in the discovery of orangeite,
a potentially diamondiferous host rock.
The Lahtojoki Diamond Mining Project
The complexity of assessing a diamond deposit's value is considerable. The
size, colour and quality of the diamonds are all critical aspects as are the
kimberlite host rocks and pipe geology. Mining and processing methods are also
crucial. Your Company is also conscious, as it moves forward with its
assessment of the Lahtojoki diamond deposit and, hopefully, of proceeding with
a mine, of the importance, not only of the technical and financial aspects, but
also of the social, environmental, local and regulatory issues involved.
Over the past six months, your Company has spent considerable time in relation
to regulatory issues. In particular on compensation for land use, an essential
part of the regulatory processes in Finland which lead to the issuance of a
mining permit. The Company has been in contact with all of the landowners
involved and subsequently the Managing Director and I met personally with most
of the individual landowners or their representatives. The process has
involved a great deal of time and effort, but I am glad to be able to say that
matters are now at an advanced stage.
Brandon Hill Capital ("BHC"), the Company's brokers, has modelled the Lahtojoki
Diamond Project based on the Preliminary Economic Assessment ("PEA"), (as
announced 1 August 2017). BHC valued the project at US$32.9M, with an IRR of
50.2% using a discount rate of 10% and an average diamond price of US$100 ct.
BHC also pointed to the fact that although pink diamonds only accounted for 5%
of the production at the Argyle mine in Western Australia, they generated 50%
of the revenue and that pink diamonds having been found at Lahtojoki that there
could be a significant upside to the US$100 ct used in their modelling. (BHC
Report 16 January 2019)
Technical matters at Lahtojoki are of course also related to regulatory
issues. There is no point in your Company proceeding with extensive, and
expensive, technical programmes before regulatory matters are satisfactorily
completed.
However, untested drillcore from drilling by a previous operator were available
which had not previously been analysed. No drilling expenditure was, therefore,
necessary and as the drillcore related to the untested larger Eastern lobe of
the deposit which could yield information highly relevant in relation to any
decision to proceed with a mine, it was decided it would be beneficial to have
some of this drillcore analysed.
The analyses which were performed by Microlithics Laboratories Inc. in Canada
on the drillcore yielded microdiamond results comparable to the microdiamond
results in the smaller Western and Central portions of the deposit. The
results indicate the potential for high quality diamonds of good colour and
shape and give increased confidence for the economics of the deposit. They not
only serve to confirm the validity of earlier analyses, by a previous operator,
they indicate that the grade, modelled at 40 carats per hundred tonnes (CPHT)
of rock from past microdiamond results could be reasonably extended into the
Eastern Lobe of the kimberlite at depth.
Diamond Exploration Programme
Positive progress has continued to be made in the Company's exploration
programmes. Drilling was carried out on both Anomaly 5 and at Riihivaara
leading to the discovery of orangeite in both areas, a potentially
diamondiferous host rock.
Anomaly 5 Drilling
The drill programme in the anomalous area (Anomaly 5) where the Company
discovered a green diamond in a till sample led to the discovery of orangeite
(Group II Kimberlite) up-ice from the green diamond discovery. Orangeite is a
potentially diamondiferous host rock of which the best-known example is the
major Finsch Diamond Mine in South Africa. The name Orangeite comes from its
first discovery near the Orange River in South Africa. Interestingly, in its
early days of production, the Finsch mine produced green diamonds. This
discovery is a considerable encouragement as we search for the source of the
green diamond or of other diamond sources in Anomaly 5.
Riihivaara Drilling
The drilling programme at Riihivaara also yielded positive results, with
further evidence of diamond potential in the area. The drilling programme was
designed to intersect kimberlite at a deeper level in bedrock, where pitting
had already discovered a kimberlite near surface, and also to provide
additional kimberlite material for analysis.
The drilling successfully intersected kimberlite at a deeper level and provided
material both for scanning electron microscopy ("SEM") and thin sections
studies which were done at the Geological Survey of Finland ("GTK")
laboratories. The SEM studies confirmed that the kimberlite was an orangeite
and diamondiferous potential was indicated by thin section and SEM studies with
the presence of a G10 garnet grain showing that the kimberlite includes mantle
material which increases the likelihood that this kimberlite may be
diamondiferous.
These results, at Anomaly 5 and Riihivaara, enhance not only our understanding
of the Riihivaara kimberlite and Anomaly 5 but also of the possible overall
diamond potential of the Kuhmo region of Finland.
This steady, incremental progress and continued success of our diamond
exploration programme in Finland is very encouraging as we continue to pursue
our long-term goal of discovering a major diamond deposit in the Finnish sector
of the Karelian Craton.
Finance
The loss before taxation for the half-year ended 30 November 2018 was EUR215,342
(6 months ended 30 November 2017: EUR211,590) and the net assets as at 30
November 2018 were EUR9,345,090 (30 November 2017: EUR9,281,407).
Directors and Staff
I would like to thank my fellow directors, staff and consultants for their
support and dedication, which has enabled the continued success of the Company.
Outlook
We look forward to continuing to make progress at Lahtojoki and to further
success with our exploration programme.
Professor Richard Conroy
Chairman
18 February 2019
Note Six month Six month Year ended 31
period ended 30 period ended 30 May 2018
November 2018 November 2017
(Unaudited) EUR (Unaudited) EUR (Audited) EUR
Continuing operations
Operating expenses (215,342) (211,590) (439,568)
Loss before taxation (215,342) (211,590) (439,568)
Income tax expense - - -
Loss for the financial period/ (215,342) (211,590) (439,568)
year
Loss per share
Basic and diluted loss per 2 (EUR0.0064) (EUR0.0091) (EUR0.0188)
share
Condensed statement of comprehensive income
Six month Six month Year ended 31
period ended period ended May 2018
30 November 30 November
2018 2017 (Audited) EUR
(Unaudited) EUR (Unaudited) EUR
Loss for the financial period/ (215,342) (211,590) (439,568)
year
Income/expense recognised in
other comprehensive income - - -
Total comprehensive expense for
the financial period/year (215,342) (211,590) (439,568)
The accompanying notes form an integral part of these condensed financial
statements.
Note 30 November 30 November Year ended
2018 2017 31 May 2018
(Unaudited) (Unaudited) (Audited)
EUR EUR EUR
Assets
Non-current assets
Intangible assets 3 9,967,646 9,607,634 9,661,559
Financial assets 4 4 4
Total non-current assets 9,967,650 9,607,638 9,661,563
Current assets
Cash and cash equivalents 198,692 44,347 18,703
Other receivables 166,655 386,848 241,859
Total current assets 365,347 431,195 260,562
Total assets 10,332,997 10,038,833 9,922,125
Equity
Capital and reserves
Called up share capital 8,622 5,844 5,844
Called up deferred share 3,174,672 3,174,672 3,174,672
capital
Share premium 8,768,276 8,201,664 8,201,664
Share based payments reserve 525,124 802,939 519,159
Retained losses (3,131,604) (2,903,712) (2,884,872)
Total equity 9,345,090 9,281,407 9,016,467
Liabilities
Non-current liabilities
Trade and other payables: amounts
falling due after more than one 5 158,008 158,088 192,489
year
Total non-current liabilities 158,008 158,088 192,489
Current liabilities
Trade and other payables:
amounts falling due within one 829,899 599,338 713,169
year
Total current liabilities 829,899 599,338 713,169
Total liabilities 987,907 757,426 905,658
Total equity and liabilities 10,332,997 10,038,833 9,922,125
The accompanying notes form an integral part of these condensed financial
statements.
Six month Six month Year ended 31 May 2018
period period (Audited)
ended 30 ended 30
November November EUR
2018 2017
(Unaudited) (Unaudited)
EUR EUR
Cash flows from operating activities
Loss for the financial period/year (215,342) (211,590) (439,568)
Adjustments for:
Expense recognised in income statement in 5,965 6,810 -
respect of equity settled share based
payments
Increase in trade and other payables 116,730 120,536 234,367
Decrease/(increase) in other receivables 70,827 (94,633) (109,960)
Net cash used in operating activities (21,820) (178,877) (315,161)
Cash flows from investing activities
Investment in exploration and evaluation (306,087) (300,527) (384,604)
Net cash used in investing activities (306,087) (300,527) (384,604)
Cash flows from financing activities
Issue of share capital 569,390 - -
Share issue costs (31,390) - -
Shareholder's loan (repayments)/advances (34,481) 80 34,481
Advances from Conroy Gold and Natural 4,377 347 160,663
Resources P.L.C.
Net cash provided by financing activities 507,896 427 195,144
Increase/(decrease) in cash and cash 179,989 (478,977) (504,621)
equivalents
Cash and cash equivalents at beginning of
financial period/year 18,703 523,324 523,324
Cash and cash equivalents at end of 198,692 44,347 18,703
financial period/year
The accompanying notes form an integral part of these condensed financial
statements
Share capital Share Share-based Retained Total
(including premium payment losses equity
deferred share reserve
capital)
EUR EUR EUR EUR EUR
Balance at 1 June 3,180,516 8,201,664 519,159 (2,884,872) 9,016,467
2018
Issue of share 2,778 566,612 - - 569,390
capital
Share issue costs - - - (31,390) (31,390)
Share-based payments - - 5,965 - 5,965
Loss for the - - - (215,342) (215,342)
financial period
Balance at 30 3,183,294 8,768,276 525,124 (3,131,604) 9,345,090
November 2018
Balance at 1 June 3,180,516 8,201,664 765,977 (2,692,122) 9,456,035
2017
Share-based payments - - 36,962 - 36,962
Loss for the - - - (211,590) (211,590)
financial period
Balance at 30 3,180,516 8,201,664 802,939 (2,903,712) 9,281,407
November 2017
Share capital
The share capital comprises the nominal value share capital issued for cash and
non-cash consideration. The share capital also comprises deferred share
capital. The deferred share capital* arose through the restructuring of share
capital which was approved at an Annual General Meeting held on 9 December
2016.
Authorised share capital:
The authorised share capital at 30 November 2018 compromised 7,301,301,041
ordinary shares of EUR0.00025 each, and 317,785,034 deferred shares of EUR0.00999
each* (EUR5,000,000), (30 November 2017: 182,532,751,034 ordinary shares of EUR
0.00001 each, and 317,785,034 deferred shares of EUR0.00999 each (EUR5,000,000)).
*Capital reorganisation:
Following approval at an Annual General Meeting ("AGM") held on 9 December
2016, the Company reorganised its share capital by subdividing and
reclassifying each issued ordinary share of EUR0.01 as one ordinary share of EUR
0.00001 each and one deferred share of EUR0.00999 each. The Deferred Shares have
no right to vote, attend or speak at general meetings of the Company and have
no right to receive any dividend or other distribution, and have only limited
rights to participate in any return of capital on a winding-up or liquidation
of the Company, which will be of no material value. No application was made to
the London Stock Exchange for admission of the Deferred Shares to trading on
the AIM.
Consolidated shares:
On 21 December 2017, the Company passed a Special Resolution at the Company's
AGM, that all of the ordinary shares of EUR0.00001 each in the capital of the
Company, whether issued or unissued were consolidated into New Ordinary Shares
of EUR0.00025 each in the capital of the Company ("consolidated shares") on the
basis of one consolidated share for every 25 existing ordinary shares.
Following the consolidation of the ordinary shares on 21 December 2017, the
warrants in issue were consolidated into one consolidated warrant for every 25
existing warrants. The exercise price in relation to the warrants was also
adjusted at this time (see Note 2).
Share issues during the period:
On 11 June 2018, the Company raised EUR569,390, (before expenses), through the
issue of 11,111,111 ordinary shares of EUR0.00025 in the capital of the Company
at a price of GBP0.045 per Subscription Share. 388,889 broker warrants were also
issued on 11 June 2018.
Share premium
The share premium reserve comprises the excess consideration received in
respect of share capital over the nominal value of the shares issued.
Share based payment reserve
The share based payment reserve represents the amount expensed to the condensed
income statement in addition to the amount capitalised as part of intangible
assets of share-based payments granted which are not yet exercised and issued
as shares.
Retained losses
This reserve represents the accumulated losses incurred by the Company up to
the condensed statement of financial position date.
The accompanying notes form an integral part of these condensed financial
statements.
Notes to and forming part of the condensed financial statements for the six
month period ended 30 November 2018
1. Accounting policies
Reporting entity
Karelian Diamond Resources plc (the "Company") is a company domiciled in
Ireland.
Basis of preparation and statement of compliance
The condensed financial statements for the six months ended 30 November 2018
are unaudited.
The condensed financial statements have been prepared in accordance with
International Accounting Standard ("IAS") 34: Interim Financial Reporting.
The condensed financial statements do not include all the information and
disclosures required in the annual financial statements, and should be read in
conjunction with the Company's annual financial statements as at 31 May 2018,
which are available on the Company's website - www.kareliandiamondresources.com
. The accounting policies adopted in the presentation of the condensed
financial statements are consistent with those followed in the preparation of
the Company's annual financial statements for the year ended 31 May 2018. IFRS
15: Revenue from Contracts with Customers ("IFRS 15") is effective for the
first time in the current interim period. The Directors have assessed that the
impact of IFRS 15 on the condensed financial statements for the current period
will not be material.
The condensed financial statements have been prepared under the historical cost
convention, except for derivative financial instruments which are measured at
fair value at each reporting date.
The condensed financial statements are presented in Euro ("EUR"). EUR is the
functional currency of the Company.
The preparation of condensed financial statements requires the Board of
Directors and management to use judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets, liabilities,
income and expenses. Actual results may differ from those estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the financial period in which the
estimate is revised and in any future financial periods affected. Details of
critical judgements are disclosed in the accounting policies detailed in the
annual financial statements.
The financial information presented herein does not amount to statutory
financial statements that are required by Chapter 4 part 6 of the Companies Act
2014 to be annexed to the annual return of the Company. The statutory financial
statements for the financial year ended 31 May 2018 were annexed to the annual
return and filed with the Registrar of Companies. The audit report on those
financial statements was unqualified.
These Condensed Financial Statements were authorised for issue by the Board of
Directors on 18 February 2018.
Going concern
The Company incurred a loss of EUR215,342 (30 November 2017: EUR211,590) for the
six month period ended 30 November 2018. The Company had net current
liabilities of EUR464,552 (30 November 2017: EUR168,143) at that date.
The Board of Directors have considered carefully the financial position of the
Company and in that context, have prepared and reviewed cash flow forecasts for
the period to 30 November 2019. In reviewing the proposed work programme for
exploration and evaluation assets and on the basis of the equity raised during
the period ended 30 November 2018, the results obtained from the exploration
programme and the prospects for raising additional funds as required, the Board
of Directors are satisfied that it is appropriate to prepare the condensed
financial statements on a going concern basis.
1. Accounting policies (continued)
New and amended standards adopted by the group
A number of new or amended standards became applicable for the current
reporting period. IFRS 15: Revenue from Contracts with Customers ("IFRS 15") is
effective for the first time in the current interim period. The Directors have
assessed that the impact of IFRS 15 on the condensed financial statements for
the current period will not be material.
Standards, interpretations and amendments issued but not yet effective
The following new standards, amendments to standards and interpretations have
been issued to date and are not yet effective for the financial period ended 30
November 2018, and have not been applied nor early adopted, where applicable,
in preparing these condensed financial statements:
* IFRS 9: Financial Instruments - effective for annual periods beginning 1
January 2018
* IFRS 16: Leases - effective for periods beginning 1 January 2019
* IFRS 17: Insurance Contracts - effective for periods beginning 1 January
2021
* IFRS10/IAS28: Sale or contribution of an asset between an investor and its
Associate of Joint Venture (Amendment) - Deferred indefinitely by
amendments made in December 2015.
The Board of Directors anticipate that the adoption of new standards,
interpretations and amendments that were in issue at the date of authorisation
of these condensed financial statements, but not yet effective, will have no
material impact on the condensed financial statements in the period of initial
application.
1. Loss per share
Basic earnings per share
Six month Six month Year ended
period period ended 31 May 2018
ended 30 30 November
November 2017
2018 (Unaudited) (Audited) EUR
(Unaudited) EUR
EUR
Loss for the financial period/year
attributable to equity holders of (215,342) (211,590) (439,568)
the Company
Number of ordinary shares for the
purposes of earnings per share¥ 34,489,179 23,378,068¥ 23,378,068¥
Loss per ordinary share (EUR0.0064) (EUR0.0091) (EUR0.0188)
¥ On 21 December 2017, the Company passed a Special Resolution at the Company's
AGM, that all of the ordinary shares of EUR0.00001 each in the capital of the
Company, whether issued or unissued were consolidated into new ordinary shares
of EUR0.00025 each in the capital of the Company ("consolidated shares") on the
basis of one consolidated share for every 25 existing ordinary shares. (In line
with IAS 33: Earnings per share, the calculation of basic and diluted EPS for
all periods presented is adjusted retrospectively when the number of ordinary
or potential ordinary shares outstanding increases as a result of a reverse
share split).
On 11 June 2018, the Company raised EUR569,390, (before expenses), through the
issue of 11,111,111 ordinary shares of EUR0.00025 in the capital of the Company
at a price of GBP0.045 per Subscription Share.
1. Loss per share (continued)
Diluted earnings per share
The effect of share options and warrants is anti-dilutive.
Following the consolidation of the ordinary shares on 21 December 2017, the
warrants in issue were consolidated into one consolidated warrant for every 25
existing warrants. The exercise price in relation to the warrants was also
adjusted at that time, to the following:
* Expiry date: 29 December 2018 - 20p sterling;
* Expiry date: 28 April 2019 - 20p sterling;
* Expiry date: 16 November 2022 - GBP2.20 sterling.
1. Intangible assets
Exploration and evaluation assets
Cost 30 November 30 November 2017 31 May 2018
2018 (Unaudited) EUR
(Unaudited) EUR (Audited) EUR
At 1 June 9,661,559 9,276,955 9,276,955
Expenditure during the financial
period/year
* License and appraisal costs 71,198 136,002 200,696
* Other operating expenses 234,889 164,525 183,908
* Equity settled share based - 30,152 -
payments
At 30 November/31 May 9,967,646 9,607,634 9,661,559
Exploration and evaluation assets relate to expenditure incurred in the
development of mineral exploration opportunities. These assets are carried at
historical cost and have been assessed for impairment in particular with regard
to the requirements of IFRS 6: Exploration for and Evaluation of Mineral
Resources relating to remaining licence or claim terms, likelihood of renewal,
likelihood of further expenditure, possible discontinuation of activities as a
result of specific claims and available data which may suggest that the
recoverable value of an exploration and evaluation asset is less than its
carrying amount.
The Board of Directors have considered the proposed work programmes for the
underlying mineral resources. They are satisfied that there are no indications
of impairment.
The Board of Directors note that the realisation of the intangible assets is
dependent on further successful development and ultimate production of the
mineral resources and the availability of sufficient finance to bring the
resources to economic maturity and profitability.
1. Commitments and Contingencies
At 30 November 2018, there were no capital commitments or contingent
liabilities (31 May 2018: No capital commitments or contingencies liabilities).
Should the Company decide to develop the Lahtojoki project, an amount of EUR
80,000 is payable by the Company.
1. Related party transactions
(a) Shareholders loans 30 November 30 November 31 May 2018
2018 2017
(Unaudited) (Unaudited) (Audited) EUR
EUR EUR
Opening balance 1 June 192,489 158,008 158,008
Loan repayment (34,481) - (80)
Loan advances - - 34,561
Reclassification of loan - 80 -
Closing balance 30 November/31 May 158,008 158,088 192,489
Prior to the various placings of shares, the immediate funding requirements of
the Company had been financed by advances from Professor Richard Conroy
(executive chairman and major shareholder).
a. Apart from Directors' remuneration, and loans from shareholders, (who are
also Directors), there have been no contracts or arrangements entered into
during the six month period in which a Director of the Company had a
material interest.
a. The Company shares accommodation with Conroy Gold and Natural Resources plc
which have certain common Directors and shareholders. For the six month
period ended 30 November 2018, Conroy Gold and Natural Resources plc
incurred costs totalling EUR74,968 (30 November 2017: EUR143,686) on behalf of
the Company. These costs were recharged to the Company by Conroy Gold and
Natural Resources plc. At 30 November 2018, Conroy Gold and Natural
Resources plc owed EUR117,514 (30 November 2017: EUR273,453) to the Company.
Amounts owed from Conroy Gold and Natural Resources plc are included within
other receivables in the current and previous financial periods/years.
1. Approval of the Condensed Financial Statements
These Condensed Financial Statements were approved by the Board of Directors on
15 February 2019. A copy of the Condensed Financial Statements will be
available on the Company's website www.kareliandiamondresources.com on 18
February 2019.
ENDS
END
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